Last week we compared Dunkin' Donuts and Starbucks' social media strategies. As one of the world's largest coffee conglomerate, Dunkin' Donuts continues to be one of the most well-known coffee spots in the United States. Despite its popularity, the Dunkin'Donuts brand still lags behind Starbucks on social media.
Geographic market
Not too surprisingly, Dunkin' Donuts is New England's coffee chain of choice -- Bostonians' love for Dunkies will never, ever falter. And on the West Coast, Starbucks is top dog.
A plan to use innovation, data, and technology to drive sales, take creative approaches to maintaining leading U.S. franchise returns, focus on growth in the international business, and expand its CPG (consumer packaged goods) business, is all part of Dunkin' Brands' strategy for growth in the next five years. The Company intends to achieve these targets by positioning its core Dunkin' Donuts U.S. brand to compete even more effectively in the coffee and beverage segment, driving profitable sales growth, and further expanding westward across the country. Dunkin' Brands announced plans to add approximately 1,000 net new Dunkin' Donuts locations in the U.S. by the end of 2020 and expects that more than 90 percent will be built outside of the Northeast.
Social Mention
According to the data provided by social mention, we can find that the mentions rate of Starbucks on social media is much higher than Dunkin' based on different commercial scale. But Dunkin' had more positive reviews than Starbucks, Starbucks has more passionate adherents and has a wider reach among people
Google Trends
According to Google trends over the past month, Dunkin's and Starbucks' search trends haven't fluctuated much. Searches for both brands have been on the rise in recent days. Halloween is coming, Dunkin' and Starbucks are presumably also gearing up for their holiday promotions.
SWOT Analysis
Strengths- Skilled and motivated staff —— Highly skilled workforce through successful training and learning programs. Dunkin' Brands Group, Inc. is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
- Superb Performance in New Markets —— Dunkin' Brands Group, Inc. has built expertise at entering new markets and making success of them.
- Reliable suppliers —— It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
- Strong dealer community —— It has built a culture among distributor & dealers where the dealers not only promote company's products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
- Good Returns on Capital Expenditure —— Dunkin' Brands Group, Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
- Highly successful at Go To Market strategies for its products.
Weakness
- Localised Competition in new territories — Although Dunkin Donuts dominates in several countries, it has delayed its expansion in others due to which a lot of competitors have popped up in geographical areas not covered by Dunkin Donuts.
- Direct competition — From Starbucks which has a large chunk of the coffee and breakfast or snack segment to Costa coffee or krispy kreme, there are many direct competitors for Dunkin Donuts.
- Indirect competition — A major worry for Dunkin Donuts is the indirect competition. From pizza hut, KFC and McDonalds which has a large chunk of the fast food segment to various local food outlets or even branded ones, every customer who goes into these food chains is an indirect competitor.
- Franchise relations are poor — Although the company is known for its fantastic supply chain and operations management, still it is known to be poor in developing franchise relations, a problem which has resulted in the franchise’s expanding slowly then competition.
- Delayed expansion in developing economies — Dunkin Donuts is not expanding as fast as it can.
Opportunities
- Changing markets — The market development will lead to dilution of competitor's advantage and enable Dunkin' Brands Group, Inc. to increase its competitiveness compare to the other competitors.
- New trends in consumer behavior — It can open up new market for the Dunkin' Brands Group, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
- Supportive policies of the government — Government green drive also opens an opportunity for procurement of Dunkin' Brands Group, Inc. products by the state as well as federal government contractors.
- New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for Dunkin' Brands Group, Inc..
- Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Dunkin' Brands Group, Inc. in other product categories.
- Reduced transportation costs — The new technology provides an opportunity to Dunkin' Brands Group, Inc. to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
Threats
- Exchange rate fluctuation — As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.
- New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
- Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.
- Online sales — Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
Recommendations
To sum up, we have the following suggestions for Dunkin's future development strategy.- Embrace your clients with thoughtful social media posts — If Dunkin' wants to expand beyond the northeast, it won't be able to build a more established brand just by selling it offline. Dunkin' can learn more from starbucks about its social media business strategy -- how to make fans feel the enthusiasm of Dunkin' with more thoughtful blog posts. Whether positive or negative, Dunkin' should engage with the entire groundswell more enthusiastically.
- Expand the market — Products are good, but market expansion is needed especially as earning of people rise and consumption of branded products is increasing. Dunkin donuts is one such world renowned brand that people will like to consume from.
- Target the health segment — Bakery products are essentially heavy in calories. But like Subway did it in sandwiches, Dunkin donuts can have a separate low calorie range. From Coke to Pepsi to other products and franchise's, everyone is recognising the potential for healthy snack.
- Expand the menu — There is always potential in the food segment, especially in the desserts and sweet market. So Dunkin donuts can always add fresh and yummy snacks to its menu to increase footfalls in stores. And besides, the flagship store of Dunkin donuts has many different type of Donuts and Coffee to keep their customers happy. Further expansion and something new is always expected by the customers.
References :
1. SWOT analysis of Dunkin Donuts. Hitesh Bhasin. May 16, 2019
2. SWOT Analysis for Dunkin Donuts. Andrew Riggio. April 21, 2015
3. Competitive Strategy. M. E. Porter. August 5, 2018
4. Business Strategies, Organizational Context and Performance. R. E. White, Generic. July 26, 2017
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