ABDURAHMAN, Zefra T.

HANDUMON, Jell P.
MIRANDA, Celestial
SANTOS, Sheah Sean P.
ZOZOBRADO, Bethle May M.

“DUNKIN’ DONUTS: BETTING DOLLARS ON DONUTS”

(Written Analysis of the Case)

I. Executive Summary:

Founded in 1950, Dunkin’ Donuts is America’s favourite all-day,

everyday stop for coffee and baked goods. It is a market leader in the
regular/decaf coffee, iced coffee, hot flavoured coffee, donut, bagel and
muffin categories. On July 25, 2012, DD announced that it has signed
agreements with three of existing Latin American partners to expand the
brand further in the region. The agreements call for more than 125 new
Dunkin’ Donuts restaurants to be developed over the next ten years by their
local partners Fagase S.A. in Chile, Donucol, Ltd. In Colombia and Nutra
S.A. in Peru. It currently has more than 300 restaurants across Latin America,
including more than 200 locations in Chile, Colombia and Peru, as well as
locations in countries including Ecuador, Honduras and Panama.

II. Statement of the Problem:

How will Dunkin’ Donuts strike the right balance of products and
placement needed to mount a formidable challenge against competitors in
Latin America?

III. Objectives:

a. To find the right strategy in order to compete with competitors;

b. To improve the sales growth of their company; and
c. To make its customers experience better to beat the competitive threat.
 IV. Areas for Considerations:
HELPFUL
(for your objectives)
Strengths:
 Smart marketer- they are smart
marketers. They are a favourite of
everyone and is not premium or pricey
in any way. Furthermore, their
geographic expansion has been
strategic.
 Experience- Dunkin Donuts has a well
established chain spread across the US
with more than 5,800 outlets and has
impressive presence worldwide as it
has more than 10,000 franchises across
more than 30 countries. DD is also one
of the oldest franchise and in fact, it
was at the helm when Franchising
began in the US.
 Brand following- The company has a
reputation for doing two things
successfully- coffee and donuts and that
took a long-standing one, being in the
market for the last 60 years. This gives
the company enough room to
experiment with its food offerings
which it has been aiming to gain an
influence for, in the breakfast market.
Opportunities:
 Diversification- Dunkin Donuts should
continue diversifying their menu to
cater the needs of every consumer.
 Consumption- The increasing
consumption of coffee worldwide.
 Competitors- The number of Starbucks
outlets has been shrinking in the recent
years and Dunkin’ Donuts’ parent
brand has enough coffers to back its
expansion against Starbucks’
HARMFUL
(for your objectives)
Weaknesses:
 Delayed expansion in developing
economies- although DD dominates in
several countries, it has delayed its
expansion in other fast developing or
newly developed economies like India.
 Brand appeal- The quest of the
company to appeal to new customers,
as part of its expansion in the breakfast
business and filling the gap between it
and Starbucks, may dilute its essential
brand appeal, trust as well as alienate
its long-time customers. If it does not
have its long-time customers or loses
its brand appeal and trust, it might not
have that niche in the market and may
lose a huge chunk of its customer. It
puts the company’s market influence at
a major risk.
 Competition- whether direct or indirect,
there are many competitors in Latin
America that DD has. DD has to keep
its eyes on its shoulders to survive
against these competitors.
Threats:
 Food preference- The growing trend of
a healthier lifestyle as people try to
avoid the high calorie or sugary food.
 Competition- DD is not expanding as
fast as its major competitors like
Starbucks; it is approaching the
growing market, being aggressive.
When competitors open a new store in
town, Starbucks opens a new store
across the street. This vigorous one-
 aggressive growth policy. And by the
current rate of its growth Dunkin’
Donuts may easily eclipse Starbucks in
the next decade.
 Expand the menu- DD can always add
fresh and yummy snacks to its menu to
increase footfails in stores. From 31
flavors in Baskin robbins, to 150
flavors today
upmanship approach led it to acquire
new grounds and deter competition.
 Shelf life- Being bakery products, the
shelf life of Dunkin donuts products are
quite less when compared to
McDonald’s or KFC or pizza hut which
are made on order basis.

V. Alternative Courses of Action:

1. Offer price deals that include discounts, coupons, and bonus pack deals.
Advantage: It can attract new customers and convince existing customers
to purchase more.
Disadvantage: It trains buyers to focus on the low price which could make
it difficult to get them to pay for the regular price.

2. Expanding existing partnerships and even creating new ones

especially with emerging economies
Advantage: More brand presence and more customers with high buying
capacity.
Disadvantage: Diluted brand value and timely

3. Increasing the number of menu choices as well as offering a variety of

new products that appeals to the taste of the newly booming demographic
that are always on the go
Advantage: more choices for the people with changing preferences, the
company will be able to tap an entirely new and flourishing market and as
well as reach out to younger generations
Disadvantage: quality and brand signature may be devalued due to the
introduction of the new range of products,

VI. Recommendation :

Dunkin’ Donuts has achieved smart growth during the past year. It added 317
new restaurants internationally in 2016. However, the brand has also increasing number of
competitors specifically in Latin America. Its focus must now be on international expansion and
making its customer experience better to beat the competitive threat. Accordingly, the hundred
percent franchisee model offers some strategic benefits but also has some inherent risks.
However, a centralized manufacturing has helped the brand maintain quality. It has got some
critical strengths and the brand has also managed a very good reputation in the market.
However, we suggest that in order for these strengths to be better exploited, DD must expand
existing partnerships and even create new ones especially with emerging economies and with
small number of competitors. This course of action may help the company in maintaining its
brand name and also improve their sales growth because such economies tend to have high
purchasing power and so that DD can also establish their brand in other countries.