Dunkin Brands Group SWOT and PESTLE Analysis

Strength

1. Firm Brand Recognition and Recall: The Dunkin Brands Group is made up of two trademark brands. Dunkin’ Donuts is widely recognized for its delicious doughnuts and impeccable service. It also doubles up as a coffee house. Baskin Robbins is the world’s largest chain of restaurants that specializes exclusively in Ice cream delicacies. Dunkin’ Brands main clientele are the average everyday breakfast customer. The loyalty their customers exhibit is what drives the company forward. Both these brands have successfully carved a niche for themselves in the market and also hold significant share of mind with the consumers. Towards the end of FY 2017, the company saw an increase in their loyalty program membership by 2 million. DD Perks is now an 8 million member strong program. The Company has recently been rated as a leader in consumer engagement by Brand Keys Customer Loyalty Index for the 12thyear in a row.

2. Remarkable Growth: Over the years, Dunkin’ Brands profits have quadrupled and their economic standing is looking very optimistic. In FY 2017, the store sales growth had gone up by 0.6% in the U.S. Out-of-restaurant retail sales saw a 30% rise in 2017. The overall demand is on an ever increasing trend line. The company has successfully established 440 new restaurants in FY 2017. Their loyalty program DD Perks saw an increase of 2 million members bringing the total to a grand 8 million members. The Earnings per share (diluted and adjusted) jumped by 7.5% while revenues increased 3.8% for FY 2017.

3. Product Quality and Trust: In terms of their products, Dunkin Donuts offers a variety of 1,000 doughnuts to their customers. Baskin Robbins offers a record 31 flavours of ice creams, making them a crowd favourite in this space. In addition to this, they have been a brand that has always listened to their customer feedback. In a recent announcement from Dunkin’ Brands, Dunkin’ Donuts decided to remove all artificial dyes from their doughnuts ushering in the New Year in style.

4. Global Reach and Accessibility: The Company has given due credence to the place attribute of the marketing mix elements. They are located at places where customer density is at the maximum. It is common to find them at International airports and town squares. They also offer drive-in facility at certain key outlets. Dunkin Brands are established in the leading economic markets of the world. The Company increased their total restaurant count by 440, 313 of which were Dunkin’ Donut restaurants for FY 2017. The total sales of retail out-of-restaurant products rose by 30 %.In 2017, CPG goods of both their chief brands achieved $900 million in retail sales out of which $150 million attributed by ready-to-drink iced coffee. Dunkin’ Donuts branded CPG business doubled to $400 million in retail sales as compared to 2014.

5. Unparalleled Convenience: The On-the-Go Mobile Ordering (OTG), feature for privileged members under DD Perks program, is highly successful with an 80 percent retrial rate. Furthermore, digital initiatives in tandem with the Next Generation concept restaurant will be implemented in 2018 after its inception in January, 2018. It would include features such as innovative drive-thru technology and mobile order drive-thru lane, which will be a first in the U.S. The online dessert sales rose by 8% in FY 2017. Baskin-Robbins introduced home delivery in collaboration with DoorDash serving half the users in the system currently and is growing at a fast pace.

6. Pricing and Promotions Strategy: Dunkin Donuts follows a competitive pricing strategy that has rendered them an edge over other biggies like Starbucks who are known for their Coffee brand. A majority of Dunkin’ Brands shops operate on the franchise business model. This goes a long way in reducing their capital expenditures and promotions strategies. This allows their finance team to concentrate on more futuristic problems such as product differentiation and identification of potential markets.

7. Franchisee Business Model: Dunkin' Brands operates on a 100% franchised business model. This lends it a great competitive advantage over its competitors as the Company is not tied down with overseeing the day-to-day operations of the restaurants and outlets, it can better focus on menu innovation, marketing, expanding accessibility, customer tastes, franchisee coaching and support, and other initiatives to drive the overall success of our brand. The franchisee business model comes packaged with many strategic and financial benefits. With limited capital investment, this business model permits Dunkin' brands to expand their points of distribution and work on brand recognition. They also generate revenue by charging royalty and fees associated with franchised restaurants, claiming rent from restaurant properties that Dunkin' leases or subleases to franchisees and sales of ice cream and other products to franchisees in certain international markets.

Weakness

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Opportunity

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Threat

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Political

1. Pro-American Scenario: The Trump administration encourages Americans to ‘start up’ their own ventures and the food industry has opened its arms to welcome new players. In America, this may be an added advantage to home companies but in other markets, it has caused customers to voluntarily abstain from all American products. For example, In India it is found that an increasing number of Indians have switched to local players to satisfy their taste buds. This is favourable for Dunkin’ Brands as it runs regular campaigns that have an underlying All-American agenda. Such events are usually done on National Donut Day. A prime example of this is the “America runs on Dunkin” campaign.

Economic

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Social

1. Competition from Indigenous players: Everybody loves a good doughnut, but in matters of taste and food preferences, the variation in preferences among customers is astounding. Indigenous players are at an advantage in this respect. They do not have to worry about uniformity in their offerings. Their products are made keeping in mind the preferences of the native consumer. This causes the customer to make a hasty decision in deciding among these two options. In most cases, the customer’s share of wallet tilts in favour of the indigenous players.

2. Market Saturation: Dunkin’ Brands have been in business for over four decades and the food industry is fast approaching saturation with a large number of buyers and suppliers. There is very limited scope for expansion if it is not fuelled by culinary innovation first. Also, Dunkin’ Brands revenues are susceptible to foreign exchange rates fluctuations. In the event that their business abroad takes a hit then the U. S. facilities will also face the brunt of it in terms of global market share.

3. Lifestyle Changes: In this fast paced world. People are always on the move and find very little time to cook or even sit down and have a meal at their home. Hence, the opportunity to attract customers for traditionally home cooked meals like breakfast has opened up. Conventional methods are fast replaced by convenience driven options. As Dunkin's specializes in its breakfast offerings, this particular trend acts a tailwind.

Technological

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Legal

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Environmental

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