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Term paper 2: Dunkins Brand Group
Term paper 2: Dunkins Brand Group
Dunkin Brands Group's current strategy seems to have been working very well despite the little challenges that come with its implementation. The company has franchised its restaurant business under the Dunkin's Donuts and Baskin-Robbins brands (Burke, 2012). Through this new model, the company has managed to franchise 100% of its business something has offered various financial and strategic solutions (Burke, 2012). This model has enabled the company initiate modern and more competitive marketing strategies, which seems to be more competitive than the traditional strategic approaches. The strategy also involves active menu innovation; franchise coaching together with other initiatives that have enabled the creation of a positive brand image.
The group has established a strategic approach, which is aimed to make the company a technology leader in its industry category (Dunkin Group, 2013). For instance, the company has initiated a number of leading-edge technologies meant to improve the guest experience and raise the franchise profitability. One of such technology is the Baskin-Robins online cake ordering together with another form mobile payment and ordering techniques (Dunkin Group, 2013). The company's new management has considered working with other international organizations as an effort to come up with the most effective strategies and technologies that will ensure developments meant to meet the requirements of the entire franchisee-focused business model.
Advanced technologies, like online marketing, mobile transactions, and other high-tech productions systems have become a vital aspect of the modern business operation. Without effective implementation of technology, modern organizations stand to chance to retain their market share. Based on this fact, the strategic approach by Dunkin to implement new and advanced technologies in their effort to develop a franchised business has improved the company's overall production and cut the production costs. This new model, for instance, has enabled the company expand its business operation into more than 60 countries and open more than 14000 joints, globally, hence becoming among the largest organizations in this industry (Dunkin Group, 2013). The franchised business model has reduced various legal conflicts in international markets. For instance, the company's international sales are primarily conducted through several joint ventures and the national licensing arrangements with main franchisees that then sub-franchise their businesses within their respectful licensed areas. Through this new franchised model, the company is now able to identify the highly potential markets and operate in multiple franchisees. However, according to the recent report, this franchised model has increased the company overall productivity and revenue generation. For instance, in 2013, the design contributed 22.1% revenue generation of the entire group, which was equivalent to $2.0 billion (Burke, 2012).
However, this new technology is faced with various challenges. For instance, as an effort to increase its franchised international business, the company has failed to observe environmental sustainability, with the worst part being deforestations. Also, the company has been reported to hire illegal immigrants in the US. However with the implementation of new technologies, the new management will be able to address the issue of immigrations and environmental conservation.
The Company's Long-Term Objectives
As the groups of loyal customers engage in pitched battles of Dunkin's coffee and donuts, the group is spending time and resources, trying to meet its long-term objectives. The group has realized the high concentration of its market share in the Eastern part of the United States. Based on this reason, it is aiming to extend its market share towards the west, with the first objective being to open 15000 outlets by 2020 (Dunkin Group, 2013). The company has realized that, although it might take some years before business developments are balanced in both the western and eastern regions, it is very important to implement that strategy. More funds are directed towards market research and investment in the western states.
For the international business expansion, the group's primary objective is to expand its market share into the emerging markets with high GDP, such as China (Itthiopassagul, Patterson & Piyathasanan, 2009). China has been traditionally a tea-drinking country. However, in the past few decades, the country has opened up to the international, diverse cultural beliefs thus adopting other eating habits, which makes it an emerging international market for coffee and snacks business. As a matter of fact, China is the second largest world economy with one of the greatest and fastest growing GDP. Based on this reason, like other multinational companies, Dunkin group is aiming to extend its business, entirely, into the Chinese market in the next 12 months (Itthiopassagul, Patterson & Piyathasanan, 2009). The group is, therefore, investing heavily in Chinese market, putting more resources and manpower into operations meant to develop and expand the Chinese market.
The group has set other objectives, which they are trying to attain the shortest times possible. For instance, as an effort to address the issue of environmental degradation through deforestation, the company is aiming to, fully; implement a green policy, especially in the global palm oil plantations (Itthiopassagul, Patterson & Piyathasanan, 2009). In order to achieve this objective, the company has set up a substantial amount of money. The money will be used in global campaigns to enlighten the palm oil farmers on the best farming methods that will ensure environmental sustainability. Additionally, the other objective for the company is to ensure healthy and quality production.
The above indicates the current organization chart of Dunkin group. The leadership structure seems to have clearly distinguished each leader's responsibilities and duties something that will enabled the company attains its strategic goals and objectives (Dunkin Group, 2013). With such a clear and an open structure, decision-making will be much efficient and smooth.
Top Leadership Bio's
In order to attain its goals and objectives, the company has maintained a well-structured organizational structure with highly qualified and skilled top leaders.
Travis is the current chief executive officer and chairman of Dunkin Brands Group. He is currently at the age of 65. He has been the group's CEO since 2009, and later as the group's chairman in the year 2013, the post he has been holding to date (Dunkin Group, 2013). Before joining Dunkins, Travis served in other multinational organizations at various top management posts thus gaining enough experiences. From 2005 through 2008, Mr. Travis was the CEO and the chairman of Papa John's International Inc., which is an international Pizza Chain (Reuters, 2015). On this post, Travis gained experience on the international fast foods marketing something that has been helping him a lot on his current position in Dunkin (Reuters, 2015). For instance, he learned various techniques in public relations, adoption of advanced technologies in a food industry and cross-cultural management. Such high experience in the field will help him make relevant decisions in regard to the attainment of the group's objectives and goals.
Previously, Travis served in various seniors positions in other international corporations. For instance, he served in a top post in Burger Kling Corporation, Lorillad, Inc (Dunkin Group, 2013). and in Bombay Company, Inc. all these corporations are in the same line of business with Dunkin's Brand's group. Therefore, the experienced he gained will help him to make the right strategic decisions, which will ensure the attainment of the group's goals and objectives.
Jack Clare, a 44 years old business organizational leader is the Group's chief information and strategy officer, which is a newly created post (Reuters, 2015). Prior to this post, Clare had served as the group's CIO for three years (Stark, 2014). His primary role is to oversee the group's global information technology resources and to develop a strategy that will ensure the business growth and expansion based on an adoption of new and more advanced technologies (Reuters, 2015). Clare has high academic capability and technical experience with management information technologies. Clare, prior to joining Dunkin's groups, served as the vice president, chief information and IT officer in the international division of Yum! (Reuters, 2015). This experience gave him an opportunity to develop high-level skills in international information technology management.
He joined the group in 2008 as the vice president of financial planning and analysis. In 2012, he was promoted to chief financial officer (Reuters, 2015). Before, he served as senior vice president and chief financial officer for Tween Brans, Inc and had served in various financial leadership posts in other organizations (Reuters, 2015). Such experience will enable him make efficient, and informed decision regarding finances thus enabling it attain its goals and objectives.
Dunkin's organizational culture revolves around the basis of moral values such as honesty, humility, transparency, integrity, fairness, responsibility (Dunkin’ Brands Group, Inc, 2013). The group believes in the moral and ethical values that are friendly and attractive to every customer despite their cultural or religious backgrounds. The group also believes on meeting the customers' expectations and needs through high quality and health production (Dunkin’ Brands Group, Inc, 2013). The group's management and employees have created a working culture, whereby, the welfare and health of the customers always come first. Such culture has enabled and will enable the company meet its objectives and be able to, successfully, implement their current international market venture strategy.
Summary of the Top Current Risks
The group is currently facing various business risks, which pose significant threats if not quickly addressed.
First, with the increase of health conditions and eating habits diseases, most people are becoming so concerned about what they eat thus abandoning most modern food for traditional home-made diets (Dunkin’ Brands Group, Inc, 2013). This is a risky business move, which is likely to pose a significant threat to the group's future business expansion and revenue generation (Kal & Small, 2011).
Secondly, the other major risk the group is currently facing is the emergence of small home based business, such as family-owned coffee shops and bakeries(Kal & Small, 2011). With the increase of these alternative shops and stores, the group's effort to expand its international market into both the saturated and new markets is highly threatened thus calling for effective change of action (Kal & Small, 2011).
Thirdly, cultural indifference is the other risk, which threatened the group's efforts to expand its international market (Kal & Small, 2011).
Top 3 Competitors in Each of the Domestic and International Markets
The primary direct competitors of Dunkin's Brands group are Starbucks, Krispy Kreme, and McDonald. All these three companies pose stiff and direct competition in both domestic and international markets. Starbucks and McDolnds are giant brands in both the US and in an international market (Perera, Kerr, Kimura & Lima, 2009). They are in the same stage of a product cycle with Dunkin's thus posing a threat to the group's marketing strategic approach. On the other hand, Krispy Kreme is the greatest domestic competitors for the group (Dunkin’ Brands Group, Inc, 2013). The company has established stores in every state within the United States thus making it hard for the group to extend its market to some regions, like in the west.
These threats are avoidable through the implementation of advanced technologies in production and supply chain (Perera, Kerr, Kimura & Lima, 2009). Also, the establishment of a new franchise model will help the group to raise its competitive advantage over the competitors. However, establishing new stores in every state within the US will help the group counter the competition posed by Krispy Kreme.
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Dunkin Group. (2013).Dunkin’ Brands. Retrieved March 26, 2015 from. http://www.dunkinbrands.com/
Dunkin Group. (2013). About Dunkin' Brands. Retrieved March 26, 2015 from http://www.dunkinbrands.com/
Dunkin Group. (2013). Investor relations. Retrieved March 26, 2015 from vestor.dunkinbrands.com
Dunkin’ Brands Group, Inc. (2013).U.S. Securities And Exchange Commission Washington, D.C.
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Itthiopassagul, P., Patterson, P. G., & Piyathasanan, B. (2009). An emerging south-east Asian
brand: MK Restaurants. Australasian Marketing Journal (AMJ), 17(3), 175-181.
Kal, G.,& Small, B.(2011).3 Reasons To Be Cautious About Investing In Dunkin' Brands.
Retrieved March 26, 2015 from http://www.businessinsider.com/is-dunkin-the-right-investment-2011- 7#ixzz3RdCXIpBt
NASDAQ. (2014).Dunkin' Brands Group, Inc. Revenue & Earnings Per Share. Retrieved March 26, 2015 from more: http://www.nasdaq.com/symbol/dnkn/revenue- eps#ixzz3RcBC3uZR
Perera, L. C. J., Kerr, R. B., Kimura, H., & Lima, F. G. (2009). CASE STUDY: STARBUCKS-
ADDING VALUE TO BRAND EQUITY THROUGH AN INNOVATIVE BRAND
IMAGE. Journal of the Academy of Business & Economics, 9(4).
Reuters. (2015). Dunkin' Brands Group Inc (DNKN.O). Retrieved March 26, 2015 from
Stark, A. (2014).‘Forest Heroes’ Campaign Urges Dunkin’ Donuts to Use Responsible Palm Oil.
Retrieved March 26, 2015 from http://www.triplepundit.com/2014/05/forest-heroes-campaign-urges-dunkin-donuts-use-responsible-palm-oil/
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