Dunkin', originally known as Dunkin' Donuts, is a famous American coffeehouse.

William
Rosenberg was an American entrepreneur who founded the Dunkin donuts franchise in 1950 in
Quincy, Massachusetts, one of the pioneers in name-brand franchising, originally named the
"Open Kettle" doughnut shop when established in 1948. It started as a small shop selling donuts
and coffee but quickly grew into a global brand with thousands of locations. Dunkin' is known
for its fresh donuts and quality coffee, and it has expanded its menu to include various breakfast
items, sandwiches, and beverages.

In recent years, Dunkin' has focused more on coffee to compete better in the market. It now has
over 12,000 stores in 36 countries, making it one of the largest coffee and baked goods chains
worldwide. The company earns over $1 billion annually, with profits exceeding $200 million.
Dunkin' employs tens of thousands of people and offers its products through grocery stores,
convenience stores, and online platforms, reaching a wide range of customers. Dunkin' is a
beloved brand, known for its delicious food, convenient locations, and friendly service.

Dunkin’ Swot Analysis

This SWOT analysis of the Dunkin’ brand explores the latest dimensions of the company’s
internal strengths and weaknesses with dynamics of external threats and opportunities.

Strengths

1. Strong brand recognition and reputation

2. Loyal customer base and community

3. Core competency in Supply Chain Management

4. Strong positioning

5. Sustainable business model

Weaknesses

1. Dependence on a US market

2. Limited expansion

3. Limited offerings

4. Weak financial position

 Opportunities

1. Healthy menu adaption

2. Diversification

3. Expansion

4. Improved variety

Threats

1. Higher competitive rivalry

2. Loss of control

3. Increasing costs

4. Supply chain to ensure freshness of food

● Strengths

1. Strong brand recognition and reputation

Dunkin is one of the well-known popular brand names, and it is almost synonymous with
breakfasts. Moreover, a report by Statista of August 2022 shows a quarter of customers who visit
restaurant chains in the United States have come across Dunkin’ Donuts in the media, social
media, or ads in the past three months. This suggests that the brand is generating some buzz in
the country.

2. Loyal customer base and community

Dunkin’ has a loyal following of customers who appreciate the brand’s unique combination of
coffee, donuts, and other breakfast items. The company has a long history of delivering
high-quality products at affordable prices, which has helped it build a strong customer base and
thus made them achieve #1 Brand in 2021 and consecutively for breakfast choice.

3. Core Competency in Supply Chain Management

Dunkin’ has become an expert at managing the flow of products and materials from suppliers to
their franchises, ensuring that everything runs smoothly and efficiently.

4. Strong positioning

Dunkin’ has a strong brand positioning in the quick-service restaurant industry. Dunkin’ has
earned a reputation for delivering excellent coffee and baked goods at reasonable prices, which
has made it a top choice for consumers.

5. Sustainable Business Model

Dunkin’ has achieved a sustainable business model that has helped the company to maintain
steady growth and to retain customers. The company’s focus on franchise operations has enabled
it to expand quickly with minimal capital expenditures from the side of the company.

● Weaknesses

1. Dependence on the USA Market.

Dunkin’ US segment accounted for approximately 47% of the company’s total revenue in 2019.
This means that Dunkin’ heavily relies on the US market for its revenue generation.

2. Limited Expansion

Dunkin’ expansion is limited compared to some competitors like Starbucks and McDonald’s.
While Dunkin’ has over 12,000 locations in 42 countries, Starbucks has over 30,000 locations in
82 countries and McDonald’s has over 50,000 in 100-plus countries. This limited expansion can
be a weakness for Dunkin’ when it comes to competing with larger brands that dominate the
market.

3. Limited Variety

One of the weaknesses of Dunkin’ is the limited variety and innovation in its menu. Dunkin’ is
known for its coffee and donuts, which are considered as finest with great texture and freshness
softness, but it lacks the variety that its competitors like Starbucks, Tim Horton and McDonald’s
offer. Dunkin’ only had 42 items on its menu in 2020, compared to 80 and 145 for Starbucks and
McDonald’s, respectively.

4. Weak Financial Position

Dunkin’ Brands’ weak financial position may have been a reason for its acquisition by Inspire
Brands. In 2020, Dunkin’ Brands reported a net income of $63.6 million, which was a huge
decline from that of 2019, which was $242.9 million. The COVID-19 pandemic also had a
significant impact on Dunkin’s financial performance, with same-store sales decreasing by
18.7% in the second quarter of 2020.

● Opportunities

1. Healthy Menu Adaption

The global health and wellness market is expected to grow by about 9.3% from 2021 to 2028.
People nowadays are more health-conscious and want healthier food options. Dunkin can take
advantage of this by adding healthier choices to their menu, such as fresh fruit, whole-grain
bread, low-fat milk, and plant-based options.

2. Diversification into New Variants and Food Product Categories

Dunkin can also acquire the opportunity of diversification by introducing new product lines in its
menu, such as new sandwich variants, salads, snacks, smoothies, juices, and tea, which can be
adapted to tastes region or culture-wise. Customers are looking for a wider variety of food and
beverage options, and Dunkin can attract them by offering co-branded products and partnerships
with other companies.

3. Expansion into New Countries

Dunkin can acquire the opportunity of expansion by opening new stores in areas where it does
not currently have a presence. This can include international markets, smaller towns, and rural
areas. Dunkin can also consider partnering with other companies to open stores in non-traditional
locations such as airports, train stations, and malls. Dunkin can also focus on opening drive-thru
stores to cater to customers who prefer quick and convenient service.

4. Improve Current Variety

Dunkin has an opportunity to add seasonal items. This can help attract customers who are
looking for unique and exclusive options. Dunkin can also consider introducing regional flavours
and specialty drinks to cater to local tastes. Dunkin can also conduct surveys and focus groups to
gather feedback from customers and use this information to improve its menu and offerings.

● Threats
1. Higher Competitive Rivalry

Dunkin Brand is facing a significant threat from high competition. Its competitors, such as
Starbucks, McDonald’s, and Tim Hortons offer similar products and services and operate in close
proximity to Dunkin’ outlets. This has made it challenging for Dunkin’ to keep its market share
and attract new customers. To overcome this, Dunkin’ should enhance its product offerings,
provide better customer service, and increase marketing efforts. It can also invest in innovative
technology solutions to improve efficiency and reduce costs, which can help it remain
competitive and maintain its market position.

2. Loss of Control

Dunkin’ faces a big threat of losing control over its franchisees. Franchisees run Dunkin’s
outlets, but Dunkin’ can’t always control the quality of their products and services. This can be a
problem if franchisees don’t follow Dunkin’s standards or provide a consistent customer
experience.

3. Increasing Costs

Dunkin’ is at risk of higher costs due to increased expenses for things like rent, labour, and raw
materials. These additional costs may reduce the company’s profits and limit its capacity to
invest in growth opportunities.

To address this threat, Dunkin’ can work on reducing expenses by improving operational
efficiency and cost management. This may involve optimising its supply chain, decreasing waste
and inefficiencies, and exploring new cost-saving measures. The company could also increase
prices or implement new revenue-generating initiatives to balance out the cost hikes.

4. Supply Chain Maintenance to ensure the Freshness of Food

Dunkin can have issues and challenges with the supply chain as it grows in the future, and it can
struggle to keep its food products fresh. The company needs to ensure that its suppliers deliver
fresh products on time.

COMPANY’S VISION AND MISSION

Dunkin' Mission Statement

To be the leading provider of the wide range of delicious beverages & baked products around the
kingdom in a convenient, relaxed, friendly environment, that ensures the highest level of quality
product and best value for money.

Dunkin' Vision Statement

To be always the desired place for great coffee beverages and delicious complementary donuts &
bakery products to enjoy with family and friends.

The External Factor Evaluation (EFE) Matrix is a strategic management tool used to assess
the influence of external factors on an organisation's performance. It helps in understanding how
well a company is responding to external opportunities and threats. Here's an explanation of the
EFE Matrix provided:

1. Economic Developments:

External Factors Weight Rating Weighted Score

Economic developments 0.15 3 0.45

Economic factors include aspects like inflation rates, economic growth, and exchange rates.
With a weight of 0.15, economic developments are moderately important. The rating of 3
suggests the company is responding well to economic changes, resulting in a weighted score of
0.45.

2. Socio-cultural, Demographic Trends, Lifestyle Changes:

External Factors Weight Rating Weighted Score

Socio-cultural, demographic trends, lifestyle changes 0.1 4 0.4

This factor includes changes in societal values, demographics, and lifestyle patterns. It has a
weight of 0.1, indicating moderate importance. The high rating of 4 shows the company is
effectively addressing these trends, reflected in a weighted score of 0.4.

3. Technological Developments:

External Factors Weight Rating Weighted Score

Technological developments 0.12 4 0.48

Technological developments include innovations and advancements in technology that can

impact the industry. The weight of 0.12 signifies moderate importance. The rating of 4 implies
the company is leveraging technological changes effectively, resulting in a high weighted score
of 0.48.

4. Political, Legal, Governmental Aspects:

External Factors Weight Rating Weighted Score

Political, legal, governmental aspects 0.1 3 0.3

This factor covers the influence of political stability, legal regulations, and government
policies. With a weight of 0.1, it is moderately important. A rating of 3 suggests the company is
adequately managing these aspects, leading to a weighted score of 0.3.

5. Ecological Aspects:

External Factors Weight Rating Weighted Score

Ecological aspects 0.08 2 0.16

Ecological factors include environmental regulations and sustainability issues. It has a lower
weight of 0.08, indicating less importance compared to other factors. The rating of 2 suggests the
company is somewhat lagging in addressing ecological issues, resulting in a lower weighted
score of 0.16.

6. Other External Factors:

External Factors Weight Rating Weighted Score

Other external factors 0.1 4 0.4

This category includes other external influences that may affect the organisation. With a weight
of 0.1, it is moderately important. A rating of 4 indicates the company is effectively handling
these factors, leading to a weighted score of 0.4.

7. Market Saturation and Competition Intensity:

External Factors Weight Rating Weighted Score

Market saturation and competition intensity 0.15 3 0.45

This factor involves the level of competition and market saturation. With a weight of 0.15, it is
considered important. The rating of 3 suggests the company is managing competition reasonably
well, resulting in a weighted score of 0.45.
The total weighted score is the sum of all the weighted scores. A score of 2.64 indicates that the
company has a slightly above-average response to external factors. In an EFE Matrix, a total
score of 2.5 is considered average. Thus, a score of 2.64 suggests the company is performing
moderately well in addressing external opportunities and threats.

● Revenue/Sales

This steady growth indicates effective management and a strong market presence. Despite
challenges like the COVID-19 pandemic in 2020, Dunkin' Donuts maintained upward revenue
trends, showcasing resilience and adaptability.

● Growth Comparison

Dunkin' Donuts' growth trajectory aligns closely with the overall industry growth. The company
has successfully maintained its competitive edge in the coffee and fast-food sectors, indicating
robust strategic planning and execution.

● Profitability and Other Indicators

Profit margins have remained stable, reflecting sound cost management and pricing strategies.
The return on investment (ROI) remains healthy, suggesting efficient use of capital.

● Value Chain Analysis

Dunkin' Donuts' value chain comprises primary and support activities that contribute to its
overall performance.

Dunkin' Donuts has exhibited strong financial performance and strategic execution. The steady
revenue growth, stable profit margins, and positive trends in key performance indicators
highlight the company's effective management and competitive strength in the market. The
financial ratios further underscore its financial health, and the value chain analysis reveals a
well-coordinated set of activities that drive success.