If you ever set foot in the USA, there is always a Dunkin Donuts store around the corner alongside Starbucks and MacDonald’s. With a vast presence all over the country and in other countries, it is a significant player in the franchise business as well as in the food and beverage industry.
Slowly yet steadily, the company has grown into a giant with its excellent business plan, market expansion, efficient supply chain, eco-friendly practices, and community branding. But, with the world, the company is facing many issues with franchise operators, recession threats, and high competition.
But, as history suggests, they kept adapting to the culture and always brought something new and unique to the market. In today’s article, we will share the Dunkin Donuts SWOT analysis report.
Dunkin Donuts: Company Overview
| Company | Dunkin’ Donuts |
| Industry | Food and beverage, Coffeehouse |
| Founded | 1950 |
| Founder | Bill Rosenberg |
| CEO & President | David Hoffmann |
| Headquarter | Canton, Massachusetts, U.S. |
| No. of Employees | 250,000+ |
| Annual Revenue | $1.370 billion (FY 2019) |
| Website | dunkindonuts.com |
With seven decades in the market, Dunkin Donuts has a rich history and industry experience. The company was founded in 1950 by William Rosenberg with just one store, which is still operational. But, in 2019, they changed the name from Dunkin’ Donuts to “Dunkin’.” The company started with just a small team, catering to millions of people with around 270,000 employees and with more than 20 regular, unique, and occasional donut types. Besides, the revenue also increased to $1.4B in 2022. With overall presence and adaptive goals and mindset, the company is growing slowly.
Product & Services of Dunkin Donuts
Donuts | Bagels | Coffee | Sandwiches | Soft Drinks
Dunkin Donuts Competitors
Starbucks | McDonald’s | Burger King | KFC | Subway | Taco Bell | Pizza Hut | Taco Bell | Chipotle
Did You Know?
To become more relevant and locally connected, Dunkin Donuts introduced a specific donut for each country, which refers to that particular country’s culture and unique taste.
Strengths – Dunkin Donuts SWOT Analysis
International Presence: Having stores worldwide is excellent for a brand as it increases brand recognition and positive stimuli. Bunkin Bonuts have over 11,300 stores in 36 countries. But 75% of the stores are in the USA alone, so you will bump into one of these stores if you’re on the road.
Strong Business Model: Behind Dunkin Donuts’s success, they are implementing a solid business model and market positioning. They keep good CRM practices, hire local talents, and a solid franchise business strategy made it possible for them to reach this height. Besides, they are consistent with their strategic and local community branding.
Efficient SCM: Effective and efficient supply chain management is crucial for any franchise and retail store because of the consistent movement of raw goods and other materials. In this case, not only do they have great SCM deals but also the wastage of the goods is minimal as their affliction with the sustainable coffee challenge.
Economical Pricing: Whether someone from the middle class to the upper, people get coffee and other necessary snacks from their nearby shops. And pricing plays an important factor in consumers’ minds’ choices. Dunkin Donuts offers its products at very affordable prices. As a result, it’s easier for consumers to choose among all the snack corners.
Eco-friendly Practices: Climate change has become an enormous concern, and countries worldwide are moving towards more eco-friendly practices in their industries. Being a part of the movement, Dunkin Donuts has joined in the cause, serving coffee in paper cups, and they committed to sourcing the coffee responsibly by 100%.
Community Branding: Local branding with a franchise model can be a powerful tool, and Dunkin Donuts knows it. As a part of the operation, they hired 25K employees all over the USA just to reduce the employment rate and boost local branding. And it paid off by raising positive brand recognition and value.
Weaknesses – Dunkin Donuts SWOT Analysis
Unbalanced Revenue Portfolio: Relying on a handful of products or having an unbalanced revenue portfolio is fragile in the long-term business goals. Around 50% of the total revenue comes from the US market alone, which is a significant weakness if there is a slight inconvenience in the US economy.
Limited Market Growth: Compared to the competitors and overall industry standard, the market expansion is minimal. Dunkin Donuts has only around 13K stores, whereas competitors have way more globally, such as MacDonald’s has more than 38K. If we look at the other stats, the ratio and the number are the same.
Poor Cash Flow: To expand stores and overall market presence, having the proper financial capability is crucial. In the case of cash flow and finance, Dunkin Donuts is facing financial issues, and a few years back, the company was forced to slow down its expansion plan, and the primary reason was that it did not have enough cash to expand.
Low Product Portfolio: Even though their main focus and product portfolio is very niche specific, that comes at a cost. Because of the limited product menu, people will go to the competitor’s restaurants which can be theirs if there are enough relevant items on the menu.
Several Controversies: The company has faced many controversies in the past decade, including racism, discrimination, and child labor issues. In 2022, the company was accused of racism and biases toward an African American couple and a 1200 child labor law violation issue at the same time.
Opportunities – Dunkin Donuts SWOT Analysis
Diversify Revenue Model: By expanding to new markets and products, they can diversify the overall revenue model. Some products can do better in the market with proper marketing and development, unique taste, and local area preferences. In that case, that rule can be applied in the international market too.
More International Presence: The food and beverage industry is booming worldwide and is now worth more than $7K million. There is enough opportunity for Dunkin Donuts to expand to developing countries and specifically the Asian market, as it is projected to increase by 7.71% and more in the upcoming years.
More Niche Products: Introducing new niche-specific products and items could help bring more foot traffics and customers to the stores. Getting more variety to the menu could be a start, and later other similar and side items like other competitors can engage more customers.
Alternative Options: People are now more health conscious than ever, and giant companies are introducing healthier options for their products alongside the main items. In the case of Dunkin Donuts has the opportunity to introduce healthier and less-calories items for the customers.
Threats – Dunkin Donuts SWOT Analysis
High Competition: The food and beverage industry is highly competitive with giant competitors such as Starbucks, Einstein Bros. Bagels, Chick-fil-A, Peet’s Coffee & Tea, etc. With colossal capital and market coverage, Dunkin Donuts isn’t growing as much as its competitors.
Upcoming Recession: There are huge possibilities and signs that a recession will hit this year. As coffee and other beverages are perceived as premium and expensive items and not precisely a need, sales will drop in the upcoming days as a result.
Franchising Issues: There are several franchise-related problems the company has been facing, and it’s a common issue. The overall distribution is getting disrupted, and the logistics and supply chain management is becoming inefficient. Even there are issues with employment issue with the franchisees.
Lower Product Shelf-Life: As most products are bakery items, the shelf-life is comparatively low. As a result, without a proper supply chain of raw materials and maintenance, reducing waste is challenging as there is always uncertainty about sales volume.
Health Consciousness: The overall health consciousness of the people has risen, and in the USA, the rate is up to 70%. As a result, people prefer more healthy foods and items, and even though the food industry is growing, overall sales have decreased for unhealthy food items.
[Bonus Infographic] SWOT Analysis of Dunkin Donuts
Recommendations for Dunkin Donuts
As the new world is moving toward and adopting new rules for the food industry, the trend and overall culture will change in the coming years. As a result,
- They should start expanding to new markets. Many lucrative developed and developing countries with booming economies will be the perfect market to grow.
- With the market expansion, they should develop and introduce new items to the menu. That way, the retained customer rate will increase as well as increase the overall foot traffic into the stores.
- The company should address the controversies and allegations beforehand and handle them more professionally to keep the brand’s face.
- As per the market demand, they should introduce more healthy items and alternative options on the menu.
- They should do more community work and branding to increase overall positivity, which can help in the upcoming recession and economic downfall.
Frequently Asked Questions (FAQs)
Are Dunkin Donuts Baked or Fried?
Dunkin Donuts are fried with oil.
How Many Indians Own Dunkin Donuts?
The Indians own around 50% of the stores and franchises.
Final Words on Dunkin Donuts SWOT Analysis
Even with low expansion in the industry and weak cash flow, Dunkin Donuts has made its position in the market. They are all over the USA and in 36 other countries worldwide. Its robust business and franchise model and efficient supply chain could serve people with quality products at reasonable prices.
But, their limited market expansion, low product portfolio, and other issues have slowed the overall growth and development and damaged the brand value. As they are very adaptive to trends and have the back of the community, they will overcome the issues and stay in the market.
References
- Wikipedia contributors. (n.d.). Dunkin’ Donuts. Wikipedia.
- About Us | Our Mission. (n.d.). Dunkin’®.
- Sozzi, B. (2020, June 8). Dunkin’ Donuts plans to hire 25,000 employees as states reopen. Yahoo Finance.
- Pierce, F. (2020, May 17). Dunkin’ Donuts signs long-term supply chain deal. Supply Chain Digital.
- Products. (n.d.). Dunkin’.
- Committed to 100% Responsibly Sourced Coffee by 2025. (2022, September 29). Dunkin’.
- Taylor, K. (2020, June 9). Dunkin’ is hiring 25,000 workers across America. Business Insider.
- Dunkin Brands (DNKN) – Revenue. (n.d.). CompaniesMarketCap.
- Goldman, D. (2017, July 27). Dunkin’ Donuts drastically scales back expansion plans. CNN.
- Dunkin’ Donuts Accused Of Bias By Ex-Franchisees. (2012, August 22). WBUR News.
- Dunkin’ franchise owner had over 1,200 child labor law violations at Mass. stores, AG says. (2022, October 31). CBS News.
- Food And Beverages Market Size, Trends and Global Forecast To 2032. (n.d.). The Business Research Company.
- World Bank Group. (2022, September 15). Risk of Global Recession in 2023 Rises Amid Simultaneous Rate Hikes. The World Bank.
- Maze, J. (2019, June 26). Dunkin’ sues franchisees over employment verification. Restaurant Business.
- Over 70 percent of Americans are more health-conscious post-pandemic. (2022, October 26). New York Post.
