Dunkin Donuts free essay sample

In the competitive world of the coffee industry, or any industry for that matter, it is essential for companies to have a clear understanding of what they do best, and where they can be the best. Dunkin’ Donuts is well known by generations and loved by a growing number of customers around the world. It was first established in 1950, in Quincy, Massachusetts, by William Rosenberg. Back then, William had a simple philosophy: â€Å"Make and serve the freshest, most delicious coffee and donuts quickly and courteously in modern, well-merchandised stores† (Dunkin’ Donuts, 2008). That philosophy still holds true today and is the foundation that has enabled Dunkin’ Donuts to grow to be the largest coffee and baked goods chain in the world. Dunkin’ Donuts offers more than a dozen hot and iced coffee beverages, donuts, bagels, muffins, breakfast sandwiches, and other baked goods. Currently, Dunkin’ Donuts has more than 6,700 shops in 29 countries worldwide. They sell more than 4 million donuts and 2. 7 million cups of coffee daily (Dunkin’ Donuts, 2008). Dunkin’ Donuts is well positioned for the future. Dunkin’ Donuts mission statement is: â€Å"Dunkin’ Donuts will strive to be the dominant retailer of high quality donuts, bakery products and beverages in each metropolitan market in which we choose to compete† (Hoovers, 2008). Dunkin’ Donuts strategy is one of differentiation where they seek to make a high quality product and sell that product within a specific environment. This analysis will provide information concerning the ideals, actuals, and gaps concerning the operations and daily business practices of Dunkin’ Donuts. There are three ideals that can be incorporated into Dunkin’ Donuts operations that will lead to a more productive strategic position. The first ideal is Dunkin’ Donuts would like to become the leader of America’s largest retailer of coffee. The next ideal Dunkin’ Donuts would like to achieve is enhancing their stores, to improve and please customer experiences. Lastly, Dunkin’ Donuts would like to improve assortment through innovation of new products to help compete with the marketplace. Ideal: Dunkin’ Donuts is America’s largest retailer of coffee Dunkin’ Donuts would like to become America’s leader in coffee serving millions of American’s daily. They would like to provide delicious food and beverages to customers while ensuring the finest ingredients in their coffee drinks. Ideally, Dunkin’ Donuts would like to expand their stores across the country to help them become America’s leader in coffee. Actual: Dunkin’ Donuts is America’s largest retailer of coffee-by-the-cup, serving nearly one billion cups of brewed coffee each year (Dunkin’ Donuts, 2008). Using only 100 percent Arabica coffee beans, Dunkin’ Donuts offers a milder roast coffee that is milled specifically for the company and is recognized by the industry as a superior grade of coffee (Dunkin’ Donuts, 2008). Dunkin’ Donuts was the first national brand to sell espresso beverages made exclusively with Fair Trade Certified coffee. Through Fair Trade, farmers and their families are earning a better income for their hard work, allowing them to hold onto their land, keep their children in school, and invest in the quality of their harvest (Dunkin’ Donuts, 2008). Dunkin’ Donuts prides themselves with serving delicious food and beverages to their customers. â€Å"They serve a menu that is fast, fresh, and affordable† (Spielberg, 2006). Iced coffee is becoming as popular as hot coffee at Dunkin’ Donuts. While iced coffee sales typically spike in summer months, Dunkin Donuts has seen rapid growth all year round, including during the winter months (Abelson, 2007). Iced coffee is the second most frequently sold product after hot coffee at Dunkin Donuts. Millions of iced coffee lovers turn to Dunkin Donuts because they recognize the quality of its iced coffee. Dunkin Donuts has been at the forefront in developing an innovative process for brewing iced coffee, which has set the standard for the industry. The unique process, called double brewing, uses twice the amount of coffee when making the beverage to achieve consistent flavor and freshness that are never compromised at the expense of serving it cold. The result is a smooth, rich taste sensation (Dunkin’ Donuts, 2008). It produces iced coffee that is never bitter or watered down. Dunkin’s Donuts also offers a variety of flavors to add to your iced or hot coffee. Customers can choose from nine tempting flavors such as French Vanilla, Blueberry, Coconut, and Chocolate. They are all 100 percent sugar-free and contain no preservatives (Dunkin’ Donuts, 2008). To secure and sustain Dunkin’ Donuts leadership position as America’s largest retailer of coffee-by-the-cup, the company has begun an aggressive national expansion (Dunkin’ Donuts, 2008). Dunkin’ Donuts, which has over 4,800 outlets in the United States, plans to triple its size across the country (Spielberg, 2006). Initial cities targeted for Dunkin’ Donuts national expansion include Atlanta, Baltimore, Charlotte, Cleveland, Nashville, and Tampa. Gap: Dunkin’s Donuts is America’s leader in coffee-by-the-cup and not the leader in the coffee industry. Their strategy is to incorporate differentiating features to set them apart from the marketplace with their low cost and high quality; however, that is not a sustainable competitive advantage. This strategy can only remain powerful as long as the company is sufficiently innovative and other company’s can not compete (Gamble, Strickland, Thompson, 2007). Companies such as McDonalds, Krispy Kreme, and Starbucks are competing with Dunkin’ Donuts strategy everyday. Starbucks offers hip music and cool furniture in their stores to create a relaxing atmosphere. Their coffee is only priced a few dollars higher than Dunkin’ Donuts which could hurt their sustainable competitive advantage of low cost (Spielberg, 2006). Dunkin’ Donuts ultimate goal is to provide more stores and locations than Starbucks and McDonalds currently have to help create differentiation (Dunkin’ Donuts, 2008). Ideal: Dunkin’ Donuts offers the best customer experiences in their stores Dunkin’ Donuts would like to create an atmosphere where customers are pleased with their customer service to keep customers coming back time and time again. Ideally, they would like to expand their menus to please customers and deliver value propositions. Dunkin’ Donuts goal is to be the best at customer satisfaction and to exceed consumers’ expectations. Actual: According to a survey conducted in 2007, in the coffee and donut category, Dunkin’ Donuts was named number one in customer loyalty (Bawaba, 2007). Our primary goal at Dunkin Donuts is customer satisfaction so this ranking is an immense honor for our brand, said David Rodgers, Dunkin Donuts General Manager (Bawaba, 2007, pg. 1). According to the survey, Dunkin Donuts more consistently meets or exceeds consumer expectations than its competitors. Dunkin’ Donuts customers are passionate about their Dunkin’ Donuts experience, which for million of customers is an everyday ritual. The company recently conducted another study in which customers were asked to go without Dunkin’ Donuts coffee for one week (Dunkin’ Donuts, 2008). The results showed that people felt life was harder, that their day lacked order, and that competitors couldn’t fill the social and emotional needs they get from a visit to a Dunkin’ Donuts store (Dunkin’ Donuts, 2008). Dunkin’ Donuts also prides themselves in their menu to please customers’ everyday. As part of the company’s commitment to offering more menu choices without compromising quality, the company has assembled a new culinary team, a lineup of skilled and honored chefs who are using their talents and experience to create new and innovative menu choices for customers (Spielberg, 2006). Recently, Dunkin’ Donuts identified a new restaurant category called â€Å"Quick Quality. † This represents a promise of fresh food fast and a higher evolution of the standards quick-service experience (Spielberg, 2006). Dunkin’ Donuts is doing this because they want to make customers’ trips to their stores more meaningful and to deliver value proposition that their customers expect, and then some. Gap: The gap is closed in regards to Dunkin’ Donuts and customer service. It is extremely important for Dunkin’ Donuts to maintain a strong competitive advantage with customer service. If the company does not display good values, which are the beliefs, traits, and behavioral norms that the company personnel and expected to display, then customers might take their business elsewhere (Gamble, Strickland, Thompson, 2007). This could possibly hurt Dunkin’ Donuts finances and their business environment in the long run. Ideal: Dunkin’ Donuts has the best products in the marketplace