BBA 4951 Unit VIII Project

Name: Arie McQuarley

Company Name: Dunkin Donuts

SWOT Analysis

Enablers

Challenges

Internal

STRENGTHS:

The company has an impressive international and local presence. In 2016, Dunkin Donuts had 317 new units outside the US. Also, the same year saw the addition of 425 units in the US by company franchisees (Pratap, 2019).

Also, Dunkin has an innovative menu with a higher profitability margin. The beverages and margin coffee menus are on higher demand by consumers.

The company also focuses on better consumer experiences. Dunkin Donuts focuses on consumer services and marketing to grow its popularity and sales.

Dunkin Donuts focuses on franchisee profitability and helps them in making better decisions through the provision of analytical data based on consumer purchase decisions and pricing (Pratap, 2019).

Dunkin Donuts has a reliable supply chain management. The company has a centralized production designed for supporting its growth. Both operated and franchised-owned facilities provide constant quality products and enhanced operations. The centralized production ensures the delivery of fresh donuts and other products.

WEAKENESS:

Dunkin has massive debts. In 2016, Dunkin had a total debt of close to $2.5 billion under their securitized debt facility. The value excluded $25.9 million from undrawn letters, as well as $74.1 million of unexploited commitments (Pratap, 2019).

Dunkin faces a lawsuit from franchisees and poor franchisee relationships. Even though the franchisee approach is effective, it has vast downsides. A significant issue is control and management. Dunkin, hence, has faced several numbers of lawsuits from franchisees.

The company also faces slow growth in newly developed and fast-developing economies. The rate at which Dunkin’s faces international development is slow. In developing economies, it could benefit from expansion at faster rates (Pratap, 2019). However, emerging economies, the growth rate is slow.

External

OPPORTUNITIES:

The large international market presents expansion opportunities. The global market is a great revenue source and for growth for Dunkin Donuts (Pratap, 2019). There are still various global regions where Dunkin lacks enough presence.

Also, the company can introduce healthy and friendly menu that can attract the new generation consumers. Health concerns form a major part of decision making by consumers to visit restaurants. Taking into consideration, this aspect will assist in driving sales as well as revenue.

Dunkin Donuts can also use digital technology for improved and more innovative consumer services (Pratap, 2019). Technology has been used by various brands to create better marketing and consumer services. It is a great opportunity that can be utilized by the company.

Dunkin Donuts could also diversify the menu. Dunkin has continually enhanced dinner and lunch globally by offering beverages and baked products. Therefore, it could add other drinks and other fresh products to meet the growing demand of consumers.

THREATS:

Dunkin Donuts faces a higher level of competition from other brands. The major competitors like McDonalds, Starbucks, and KFC are major threats in the beverage and baked products business (Pratap, 2019). They have equally expanded globally and had larger market shares, which Dunkin Donuts need to catch up with immediately.

Also, there are current fluctuations as well as stronger dollar rates that affect the company’s revenue. The slow economic growth in various major economies affects Dunkin’s profitability from consumer spending. The stronger dollar results in reduced revenue from global sales.

Raw material costs also pose a major threat since fundamental materials like coffee and other essentials are subjected to potential shortages and price fluctuations (Pratap, 2019). If the prices increase, then the franchisees will experience reduced sales since no consumer will keep up with the higher retail prices from the restaurants.

How the above information will be used:

Dunkin Donuts can use the strengths, weaknesses, opportunities, and threats to improving its business operations. Weaknesses and threats can be used as major improvements for challenges. For instance, increased lawsuits concern should be used to increase the relationship between them and franchisees. Also, the increasing debts should be the pathway to better financial decision making to avoid running into bankruptcy. Threats like competitors should be a major incentive towards aggressiveness in infiltrating the whole international markets, as a way to increase their market share. Nonetheless, issues such as fluctuations in the market are beyond their control. However, it gives them a better chance to make strategic plans towards achieving profitability. Therefore, the weaknesses are significant in strategic risk management and planning since they focus on improving their weak operations. It will enable them to accomplish their goals and objectives that focus on international expansion and improving consumer experiences to beat their competitors.

Also, the opportunities and strengths are essential to improving Dunkin Donuts' international operations. They can be exploited for rapid expansion in emerging economies. For instance, the diversification in their menu will add new consumers to the brand and market. Consumers continuously look for new products and providing them as they demand essentially for more growth. Besides, a factor such as the impressive international presence is a promising aspect that Dunkin Donuts can utilize to grow and expand into new territories. Strengths and opportunities are essential for focusing on effective operations by utilizing existing factors to create new and more impressive strategies to the market.

References

Pratap, A. (2019). Dunkin Donuts SWOT Analysis. Notesmatic.