Porters Five Forces on Dunn Brothers Coffee

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Table of Contents
Introduction......................................................................................................................................3

Porters Five Forces on Dunn Brothers Coffee.................................................................................3

Suppliers Power:..........................................................................................................................4

Customers:...................................................................................................................................4

The threat of substitutes:..............................................................................................................5

The threat of new entry:...............................................................................................................5

Market competition:.....................................................................................................................5

References:......................................................................................................................................6

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Introduction
Dunn Brothers Coffee is the fastest rising coffee franchise in the US. This award-winning coffee
shop contains more than 90 franchises globally. It was founded in 1987 and is headquartered in
the US. Each location has a marvelous, authentic and attractive atmosphere with a smooth aroma
of coffee. Coffee drinks are the best beverages consumed globally. Porter's five forces analysis
on Dunn Brothers Coffee will help identify the business's competitive analysis.

Figure 01: Dunn Brothers Coffee

(Source: dunnbrothers.com, 2022)

Porters Five Forces on Dunn Brothers Coffee

Porter's five forces are the competitive analysis that provides the details for strategic
implementation and management to identify the five factors of the coffee business (Duke, 2018).
It contains the supplier power, customers, threat of substitutes and new entry, and the last one is
market competition. These five factors will identify the highlights and notable factors that
business needs to consider.

Figure 02: Porters Five Forces

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 (Source: researchgate.net, 2022)

Suppliers Power:
Suppliers' bargaining power is low in Dunn Brothers Coffee because they have more than one
supplier to buy from. This business has the choice to buy coffee beans from another supplier,
which are the major ingredients of Coffee. The business's overall sales and revenue levels are
major factors and strengths that the business can use while bargaining with the suppliers. It is the
best strategy for bargaining as suppliers are eager to get a contract from high margins businesses.
If suppliers aren't open to bargaining, then Dunn Brothers Coffee should go with the negotiation
option with them or make contact with them. It will be helpful for business.

Customers:
When it comes to the coffee industry, consumers do have loyalty to the brands, but it's not for a
lifetime as their interest fluctuates. Consumers' bargaining power is low here as the business has
enough strength, and they have different coffee brands to buy. So, here Dunn Brothers Coffee
business provides various deals, discounts, and coupon codes to maintain and engage consumers.
With the help of this way, businesses can maintain the high power of consumers.

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The threat of substitutes:
The threat of substitutes for Dunn Brothers Coffee is high. The biggest reason is the easy
availability of various beverages and Tea. The number of substitutes for their coffee business is
rising day by day. People always want to try different drinks or get attracted to beverages at
lower prices, such as Tea. Tea is one of the foremost threats of substitutes for the coffee industry,
and in most nations, Coffee is only taken as the occasional beverage, such as in India. Beside
Tea, there are various local beverages which are also a threat to the Dunn Brothers Coffee
business, so they should focus on the aroma and taste of their Coffee. They should launch new
coffee beverages. They can easily give some offers on their Coffee. With the help of these, they
can maintain their consumer traffic without decreasing their revenue.

The threat of new entry:

For Dunn Brothers Coffee, the new entrant's threat is comparatively high as several Coffee
businesses are already available, so there is a high chance of getting eliminated from the coffee
industry. Here, Dunn Brothers Coffee needs to focus on its brand and how it can make its brand
strong. In this case, there is no need to fluctuate the pricing factor of their beverages. They
should do some easy research on their nearby market area where different coffee businesses are
opened. Based on these research and studies, they can make changes and develop their business
more attractively.

Market competition:
The impact of market competition on Dunn Brothers Coffee business is high as some high
competitors are established, such as Starbucks, Maxwell House, Dunkin and others. Starbucks is
one of the strong competitors as there is a wide variety of beverages with excellent offers. A vast
range of communities always prefers Starbucks over other Dunn Brothers Coffee. So, they
should focus on their engagement with consumers, improve their environment and services,
menu and price factor. Following graph shows the total sales of the major coffee industries in US
(statista.com, 2022) which are strong competitors of Dunn Brothers Coffee.

Figure 03: Sales of Leading Coffee Industries in US

(Source: statista.com, 2022)

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References:
dunnbrothers. (2022). Available at: https://dunnbrothers.com/. Last accessed on May 2022.

Duke, D., 2018. Porter’s five forces and the coffee industry. Management Teaching Review, 3(3), pp.241-
251.

researchgate. (2022). Available at: https://www.bing.com/images/search?

view=detailV2&ccid=dWuDZOEe&id=F1A005F438F94C4E2F7F4B77585A7BCC1B88E05A
&thid=OIP.dWuDZOEegfk_VTSUZCbPggHaGG&mediaurl=https%3a%2f
%2fwww.researchgate.net%2fprofile%2fAlexander_Malm%2fpublication
%2f296695687%2ffigure%2fdownload%2ffig118%2fAS
%3a614401837105182%401523496221778%2fPorters-Five-forces-model-for-the-external-
environment-of-the-rheometer-market.png%3f_sg
%3d0mF5219ewj74J5qjbAZ5hwdkcmLrC_FYkVF-
WE2auazuWtJUiRMZ9G_9EoKesEoJ_C1cjwoy9hI&exph=701&expw=850&q=Porters+Five+F
orces+
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7B99E7998623C&selectedIndex=1&ajaxhist=0&ajaxserp=0. Last accessed on May 2022.

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statista. (2022). • Leading ground coffee brand sales U.S. 2020 | Statista Available at:
https://www.statista.com/statistics/188315/top-ground-coffee-brands-in-the-united-states/. Last
accessed on May 2022.