Dunkin Donuts Company Review (Essay Sample)

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Dunkin Donuts Company Review
Summary
Dunkin Donuts is an American based company that was started way back in 1948 by an American entrepreneur, William Rosenberg in Quincy, Massachusetts. Over time, the company has grown to become the world’s largest donut and coffee retailer. Currently, Dunkin Donuts has close to 15,000 outlets across 37 countries in the world. Its success and continued growth are attributed to effective in strategic management. The company’s policies have been drafted to be compliant with labor regulation, government requirements and environmental conservation regulations. Through active and continuous market research and analysis, the company has been able to expand its operation to foreign lands by competing effectively with its competitors.
Various researches conducted in this industry have ranked Dunkin Donuts as the best vendor for breakfast and ice cream. Being the best, the company serves the highest rated coffee alongside with baked foods. Its consistent quality in both products and services have helped the company maintains its industry leadership for eight straight years. Both Forbes Magazine and the Franchise Times have ranked Dunkin Donuts among the world’s top franchise systems.
Dunkin Donuts traces its roots back to its inception, when it had a single outlet. The company has grown tremendously to become the world’s largest high end coffee stop shop. From a single outlet to more than 15000 outlets worldwide, the growth of Dunkin Donuts is evident. The company’s growth is mainly attributed to Franchising as a form of market penetration CITATION Dun14 \l 2057 (Dunkin' Brands). Franchising is described as a business deal where the owner of a product or services enters into a contract with a smaller business, giving it rights to sell its products and services in return of a monetary benefit. Since its inception, Dunkin Donuts has grown through this mode of acquisition and expansion CITATION Don12 \l 2057 (Donnelly). According to the company’s management, franchising is cheaper compared to foreign direct investments or take overs and mergers.
By the end of the 2013 financial year, the company had reported franchising sales revenue as $9.3 million. The sales revenues have been growing annually at a rate of approximately 4%. Operating income growth is estimated at 15% per annum. The global increase in sales revenue for Dunkin Donuts has been estimated as 6.1%.
The company has plans of expanding its local market by doubling its operations in the domestic market. This plan will see focus directed to increase the number of Dunkin Donuts outlets in America from the current 7000 to 15000 CITATION Don12 \l 2057 (Donnelly). The western region will be the main focus for this growth strategy where plans laid down suggest that 5000 outlets will be brought up in this region. The company has recognized that its brands are popular in these regions regardless of the few stores available in the western region. Capitalizing on this opportunity will see the company grow further.
To increase awareness and popularity of its products, Dunkin Donuts plans to engage in more advertising and promotional activities. For instance the use of Facebook and Twitter to market its products (Steinhoff, 27).The company also plans to use social events like valentines and Easter holidays to market its brands. Through branding based on these events, the company hopes to increase sales across all its stores.
To further the growth strategy, the company wants to increase operational efficiency by reducing wastes in its current operations. Further investments will be undertake where stores will be remodeled, new stores set up and others franchised to as to double the current revenue.
Corporate Structure
The company’s management is composed of a board of directors who oversee the activities of the company. The Dunkin Donuts is led by a chief executive officer who is also the chairman to the board of director. He functions to oversee the daily activities of the company through coordinating the top level management. Second in position is the chief financial officer who is in charge financial decisions and control. Under the financial officer is the information officer. The next in line is the President, Global Marketing and Innovation. The Chief Legal and Human Resources Officer, President: Baskin-Robbins U.S. and Canada, and Dunkin’ Donuts& Baskin-Robbins China, Korea and Japan, Senior Vice President and Chief Supply Officer, Senior Vice President and Chief Communications Officer and the President, Dunkin’ Donuts U.S. and Canada, and Dunkin’ Donuts & Baskin-Robbins Europe and Latin America following that order (Dunkin Brands Group, Inc.).
The organization structure used by this company has proved to be effective as the communication channels are defined in the hierarchical system. The follow of information and coordination of functions in this structure is efficient.
Health Earnings
Over time, Dunkin’ Donuts has grown as evident in its revenues and profits. Once the company set it targets, the employees together with management have strived to achieve the targets. This has made the company profitable over time. Currently, the company records its profits at $135 million. The earnings per share range from $1.48 to $1.57 annually. The company has set an annual growth in earnings per share to be above 15%. It also estimates the operating income will increase from the current 6% growth rate to 8% CITATION Dun14 \l 2057 (Dunkin' Brands).
The company’s management has given shareholder satisfaction a major priority in their business objectives. As the company seeks to expand its operations and generate more income, they have acknowledged the role or stockholders in their development process. As observed above in the health earnings section, the earnings per share were proposed to increase as the company’s revenues increase. This shows that the company’s management takes care of the shareholder’s concerns. Also, as the company seeks to undertake capital investments, permission from the stockholders is needed. The company has utilized the interaction forums such as annual general meetings to make the equity owners aware of the investment plans. This has served in reducing conflicts between the two.
The company’s management has conducted timely researches in the product market to ascertain customer preferences. This is one of the key factors that have contributed to the continued growth of the company. Market research reveal current consumption trends. The company has been able to use this information in production. For instance, production of more ice-cream in Europe is due to its observed high demand (Burrow 76). It also observed a decrease in consumption of some products during certain seasons; for instance, ice cream during the cold season. During these times, less of it is produced leading to waste reduction.
Through research, the company has been able to produce a new line of products in its menu. The company started with donuts and coffee as the main items in its menu, through market research, more than 100 baked products are now sold in its menu.
The directorate is in charge of making of policies that govern the Dunkin’ Donuts business. This business policies are the few aspects that distinguish Dunkin’ Donuts from the rest of the coffee houses. The directorate is charged with employment, procurement, and issuing of tenders to interested business partners.
The company has planned to expand the stores to twice as much as they were by the end of 2011. This will make the stores to...