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Strategic issues in dunkin donuts
Strategic issues in dunkin donuts
Dunkin donuts case study
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“Ring, ring,” you hear as you walk into Dunkin’ Donuts. You can smell the freshly made donuts. You can see the coffee smoothly brewing through the coffee machine. You can slightly hear the oven baking the donuts to the perfection. This is the priceless Dunkin’ Donuts. I first became interested in this American breakfast restaurant, when I first took a bite of the outstanding Boston Creme Donut. After the delicious doughnut, I began to wonder about the history. Who created Dunkin’ Donuts? Why did they create it? Where was the first site opened? What did the very first restaurants look like? Looking at the menu, makes me curious about what else do they serve at Dunkin' Donuts? What efforts has the company made to make their products healthier? What have they done to keep customers coming back? When I had ordered my eye had rendered to the cashier, and below his name, it said franchise owner. Then, I began to think, How much will opening a Dunkin’ Donuts franchise cost you? What areas are you allowed to open a franchise? How much money net profit could …show more content…
From the beginning of Dunkin’ Donuts, franchising has been there. Your investment to start a Dunkin’ Donuts could be from 217,300 through 1,637,700 dollars. Dunkin’ Donuts has monopolized the east coast since the start of the company. Because of its very first location being based out of Massachusetts. This caused Dunkin’ Donuts having to make the east coast “a reserved area for franchisees.” (Franchising, Dunkin’ Donuts website) This means you will have to negotiate with the company to base your Dunkin’ Donuts out on the east coast. Besides the east coast, you are not allowed to franchise in Washington, Montana, Oregon, Idaho, Wyoming, Nebraska, and Alaska. This rest of the states are, “Free Zones,” according to Dunkin’ Donuts. When you open a franchise your net profit could be 250,000 to 500,000
Moe’s Southwest grill is a fairly new franchise concept. Moe’s was organized July 17, 2000 in Atlanta, Georgia by founder and CEO H. Martin Sprock III. The first franchises were offered in 2001. Their parent company is Raving Brands, franchisor of Doc Green’s, Mams Fu’s, Planet Smoothie, PJ’s Coffee, Monkey Joe’s. On April 11, 2007, Raving Brands sold Moe's to FOCUS Brands, franchisor of Carvel, Cinnabon, Seattle's Best Coffee, and Schlotzsky's. There headquarters is located at 2915 Peachtree Rd., NE Atlanta, GA 30305. On March 12, 2007, Raving Brands entered into a 40-store development deal with Canadian partner True North Brands, Inc., representing Raving Brands’ move to an international playing field. On March 27, 2007 Moe’s Southwest Grill contracted with North America’s largest food service marketer and distributor, SYSCO Food Services, to consolidate its U.S. food purchasing and distribution program. The company logo MOE’S SOUTHWEST GRILL and a picture is as follows:
• The franchisees would have to raise approximately $750,000 of outside financing to fund the venture
There will be an estimated $40,000 in equipment, including industrial freezers and ice cream making machines, as well as a service counter for the customers to observe and test their flavors (Bush Refrigeration; Appliances Heaven). An additional $10,000 is set aside for coffee makers and blenders to provide the ability to make quality coffee and other warmed beverages for the customers to enjoy. This eats up approximately half of our starting sum, but it is also the most expensive portion of the process. Renting a smaller building is the most realistic way for this type of starter business to test the waters and see if it has the potential to grow. It is pointless to spend a large sum of money on a building in the beginning stages if you don’t even know how successful your business will be. $2,000 per month will be set aside to cover rental costs and should sufficiently cover the size of the building and utility bills we incur. In order to bring the building up to shape and remodel it, we are setting aside $15,000 along with an additional $8,000 for furnishings and exterior landscaping and design (Seating Experts). Labor for four employees over the course of a month working at $10 dollars per hour places labor costs at approximately $6,400. The initial purchase of materials will be another huge purchase for Hot Snowballs. The ingredients for ice cream must be bought separately and then assembled on site. The coffee beans and other materials can be ordered and then prepared as is on site. This cost is estimated at $5,000 to gather all the initial ingredients and materials. Hot Snowballs marketing campaign will launch with two billboards and a social media sponsored ad and will have an initial budget of $8,000. This leaves us with a $5,600 cushion to use wherever necessary or to cover legal fees
The story of Starbucks coffee history begins in Seattle in 1971 when the first Starbucks opened at Pike Place Market, which is Seattle's and the Nation's oldest Farmer's Market. At this time the company was a local coffee roasting facility. That remained their core business until 1982 when Howard Schulz joined the company. He was the new marketing executive and began right away to convince more and more local cafes, upscale restaurants, and hotels to buy Starbucks coffee. The turning point for the company and the beginning of coffee history should be one year later when Schulz traveled through Italy. He got inspired by the Italian coffee bar tradition to serve fresh brewed Espresso and Cappuccino. He convinced the Starbucks founders to give his idea a chance and in 1985 he opened the first coffee bar in Seattle, named Il Giornale. (Wilson)
The Waffle House is without a doubt one of the last surviving institutions of small town Americana. Started in the mid 50's, this restaurant franchise has endured in ways that defy modernization. While McDonald's had to appeal to the younger set by adopting a clown as a spokesperson, and while countless other fast food eateries have embarked on multi million dollar ad campaigns to modernize their images, the Waffle House has remained solid by stating simply, "Good Food Fast, So Come On Down." The place is open nonstop: twenty four hours a day, seven days a week, dedicated to the service of the customer. This simple, hardworking approach appeals to countless numbers of hungry persons, and so it has remained relatively unchanged since its inception.
Krispy Kremes's strong brand name, highly differentiated products, high-volume production capability and multi-channel market penetration strategy has worked well. With each new store opening there are lines waiting at the door all night to experience the Krispy Kreme quality. In Denver, more than 3000 people stood in a line extending for more than three city blocks on opening day. They have production areas in full view and a neon light that lights up when "Hot Donuts" are actually coming off the line. Krispy Kreme makes customers feel good about indulging.
Today, they have expanded lunch programs to a total of 4,150 stores and introduced the ability to warm pastries and provide hot breakfast sandwiches to stores across the nation. Starbucks retail stores are operated through a number of joint venture and licensing arrangements in South East Asia countries as well as Thailand, Singapore and China. When they do the business in foreign countries, the most important issues will have to be aware of the exchange rates. They are planning to open 2,400 stores internationally in 2007, and they have approximately set financial growth targets for total revenue 20 percent and annual earnings-per-share 20 to 25 percent for the next three to five years. In addition, they have proposed new stores count target to 40,000 worldwide (20,000 U.S. and 20,000 International) in the long-term (Starbucks Financial Release, 2007).
As shown in this exhibit Dunkin Brand Group currently has $3,177,383,000 in total assets; $2,809,424,000 in total liabilities; and $367,959,000 in shareholder’s equity. Starbucks has total assets of $12,446,100,000; $6,628,100,000 in total liabilities; and $5,818,000,000 in shareholder’s equity. McDonald’s has the highest total assets as well as total liabilities and shareholder’s equity of the three competitors. The company 's total assets of $34,281,400,000; $21,428,000,000 in total liabilities; and $12,853,400,000 in shareholder’s equity. The balance sheet is a financial statement that is used to report the financial position of a company in its fiscal year. With these three competitors, it is clear that McDonald 's is the largest of the three and has both the most assets and
The first Dunkin Donuts was opened in 1950 by founder Mr. Bill Rosenburg in Quincy, MA. Five years later the very first franchised branch was licensed. Sixty years later, under “Dunkin Brands Inc.”, there are now over 10,000 stores including more than 7,000 franchised locations, all in 36 of the United States. There are over 3,000 Dunkin stores internationally in 32 countries other than the United States. Dunkin' Brands Group, Inc. is one of the world's leading franchisors of quick service restaurants serving hot and cold coffee and baked goods, as well as hard-serve ice cream. Dunkin Brands is head quartered in Canton, MA (Company Snapshot).
The doughnut industry consists of few major competitors which are Dunkin' Donuts ($2.7 billion ), Tim Hortons ($651 million ), Krispy Kreme Doughnuts Inc. (KKD) ($665 million ), Winchell's Donut House and a large number of smaller, independent doughnut shops, including neighborhood bakeries/doughnut shops and bakery departments in supermarkets. (See Figure 1)
Taking into consideration all KKD's publics, it is no shocker that Krispy Kreme continues to grow. For the first time, it successfully expanded nationally during the late 1990s in California (Saltzman). A main point of Krispy Kreme’s continued financial success has been their expansion into international markets.
Burger King delivers value to their customers through their products, prices, and place and promotion strategies - (“BK doesn’t just promise value, they actually deliver value”). Burger king has been in existence for 60 years and is growing rapidly in many other countries. Burger King delivers quality, great tasting food which satisfies ones need or wants and captures the value of customers even before the first purchase is made. Burger King has products very unique from other competitors such as KFC and McDonalds. The difference is that Burger King does not limit their customers in terms of what they eat. For example, when I spoke to a customer also big fan of Burger King, he mentioned that the sauces are left public for the customer to decide on which sauce to have rather than giving the customer one kind of sauce such as McDonalds and KFC. The cold beverage is also self-help service in which customers can help themselves to a bottomless drink. This way the customer feels free to choose what satisfies the need or want.
The franchising fee to obtain a Subway is fifteen thousand dollars and a twenty year franchising agreement. The total investment could be as little as $ 78,600, but it depends on the location and other factors. It cost two thousand dollars for the property and four thousand five hundred for the equipment. The security system, freight charges, and outside signs cost two thousand dollars each. The opening inventory cost four thousand dollars, ...
Much of the target market will be business people who earn between R36 000- R400 000 per year. Target Markets earning less than this may not have as much disposable income to spend on Dunkin’ Donuts products. More inexpensive products should be available for secondary target markets with less purchasing power.
The first step in any business is to think of or create a business idea. Without an idea, one cannot launch their business off the ground. A right direction is needed to create a business with a unique idea. However, other options include franchising or buying an existing business (1). Franchising allows an individual to run stores such as Burger King or McDonalds under the corporate name. It involves taking training classes and a heap of money in order to start a franchise. A Franchisee will have to buy products and services from the corporate entity they are franchising from, which is often required. Buying a franchise is like taking a piece of the pie from the company that is franchising and sharing that pie with everybody else. In addition having a franchise allows one to communicate and in essence become a big part of an added business opportunity (4). Franchising is far from easy to start and maintain for that matter. Starting a franchise involves a l...