Case Study: Dunkin Donuts (Essay Sample)

Case Study: Dunkin Donuts
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Executive Summary
During the 1940s, Dunkin Donuts begun as a donut shop in Quincy, Massachusetts, owned by Bill Rosenberg. Bill Rosenberg officially changed its name to Dunkin Donut from The Open Kettle two years after it begun its operation. Currently, Dunkin Donuts has over 8000 stores in more than 50 countries. The company also franchises Baskin Robbins, which are frequently co-branded with the Dunkin Donuts franchise. However, Dunkin donut lacks company owned stores and solely focuses on franchising stores instead of company-owned stores. With increasing competition from the Starbucks and McDonalds, this reports investigates how Dunkin Donuts survives in such competitive environment.

Introduction
In the recent years, the sales force has been the primary instrument for presenting organization’s product and services. Sustaining and establishing an efficient and effective bond between the sales team and the buying customers is significant in meeting financial and other goals of the company. Initially, little effort was devoted to the development of managing sales force (Belt, 2009). The characteristics of entry were weak even though the requirement that one sell were clear. The retail sales framework has significantly transitioned over the past years due to innovation, economic development, better-trained sales force, and the complex level needed to sell products. These factors have altered the system of the retail sales and continue to cause it to transition so as fit in the current setting. In this context, it is virtually possible to recognize Dunkin’ Donuts standardized experience to that of Starbuck and McDonalds. Each of Dunkin’ Donuts Company-owned retail stores shares almost the exact same layout or at least all the significant standardized components and merchandised coupled with friendly customer oriented services. The stores are neither “Do It Yourself” oriented nor more contractor oriented (Belt, 2009). However, the look and feel of the stores remains more or less the same in terms of look and feels like standard product service offering. Identifying the similarities found between the company-owned stores of the Dunkin’ Donuts has led to interest into how the food and beverage manage and conduct retail. The main focus of this report is how Dunkin’ Donuts and other top companies in the food and beverage industry balance between selling through company-owned stores or franchise retail outlets. The report will also examine the value of service offered and provided by Dunkin’ Donuts and its significant competitors. These competitors include the McDonalds and the Starbucks. Dunkin’ Donuts sells a unique and different set of products from the Starbucks and the McDonalds. However, in North America, these three companies compete in the big leagues of availing hot beverages to millions of coffee thirsting Americans.
Dunkin’ Donuts started in the 1940s as a company called Industrial Luncheon service. The company has currently m,ore than 800 stores in more than 50 nations. The table below provides an overview expansion of Dunkin Donuts global franchise units.


The table suggests that Dunkin’ Donuts does not own stores and solely focus on franchising stores than company owned retailed stores. The company avails experts that provide best practice field support to all business connected operations including franchising, development, marketing, and constructions. The service provided by the expert extends to franchising opportunities, site selection, and product training through the process of development. Dunkin’ Donuts also avails franchise equipment and information through the company’s training and support teams at a service level expected from a large global organization. Dunkin’ Donuts investment in its franchises enables it to operate more cost effective and efficiently.
Some of the benefits of the franchise includes brand recognition, competitive brand, and the online university. This permits potential for uncontrolled profits, the opportunity to be part of a company that avails diverse learning programs, courses and resources throughout the year. some of the risks encompass candidate profile in terms of theinitial franchise demands including a high level of both skills and resources thus restoring many investors. Also, this approach has exposed Dunkin’ Donuts to up 10-15 times more lawsuits than an average franchise (Dunkindonuts).
Regardless of this, Dunkin Donuts still has managed to maintain a disciplined, steady strategic growth by opening in all North American core markets. The company currently boasts with more than 8,000 restaurants in 50 states including the District of Columbia becoming a part of the daily lives of millions of American. Foucing on franchising strategy, Dunkin Donuts maintains a significant brand recognition in the United states as well as globally with the opportunity to expand the number of restaurants even more by doubling the amount of restaurants to 20,000 stores onlyin the United States over the coming years. Besides, Dunkin’ Donut has more than 3, 000 locations in over 40 international countries across the world.
The trend currently in the midst of a globalized economy is the growth and expansion of a company’s business within the emergent markets (Belt, 2009). Starbucks’ approach to its market positioning is somehow different to that of Dunkin Donuts being closer to the higher-quality end of coffee offerings instead of the average American middle-class target market. Starbucks has always applied the standard company owned retail store methodology with the majority of its annual net revenue being generated mainly through this company owned retailer locations mainly centralized within highly populated areas with high volume foot traffic. This strategy significantly favors domestic application. Starbucks is approaching the migration into these market by losing t requirements for its licensing agreement. This has allowed a hybrid Starbucks tailored franchise model that has enabled a fast penetration and growth into the developing market. This strategy has enabledretailed locations in many nations consisting of the BRIC nations. Thisstrategy resulted in Starbucks generation of 23 percent of its revenues for 2013 financial year, outside of the U.S with one of its main direct competitors, Dunkin Donuts’ 3 percent. Although Dunkin Donuts manages to maintain higher margins through its franchise model, Starbucks do gain greater sales volumes through its larger global presence and increasingly control the company has in its daily operations by means of its retail model.
Most of McDonald’s restaurant are either operated by the holding company, franchisees or McDonald affiliates. McDonald’s business model is a three-legged stool of its owners, suppliers, and employees; of which all three from thecompany’s foundation. Establishing a balance between the various interests of the three parties is the essence of success for McDonald. The level at which McDonalds align these three component withitself as a company has been the key to success, enabling a global business model that delivers a locally relevant restaura...