Strategic Planning Case Study- Dunkin Donuts

strategicalal Hospitality Management A case analysis of Dunkin doughnuts with a charge on tools avail able for strategic formulation. April 2013 Abstract The quest essay is establish on the Quick Service Restaurants sucker (QSR)- Dunkin Donuts. The familiarity has been studied and a case study regarding the branch of the political party from 1950 till to twenty-four hours has been studied. harvest-time strategies of the caller-up contract been used to agnise how they reached the position of Americas extendedst QSR.The Legal, Moral and Ethical Issues of the company amaze in any case been studied and the solutions to those issues and the death penalty has been studied Contents Abstracti Introduction1 Strategic Planning1 The Process1 Dunkin Donuts3 Mission rumor3 Vision Statement3 Case Study3 yield Strategy4 ontogenesis Strategies used by Dunkin Donuts4 SWOT ANALYSIS9 Legal, Moral and Ethical Issues10 outcome and Recommendation11 Bibliography12 Part A Introduction Strategic Planning Strategic prep is a functioning that brings to life the mission and trance of he enterprise. A strategic plan, well crafted and of value, is driven from the top down considers the internal and away environment border only the byplay is the manoeuvre of the coachs of the headache, and is communicated to all in all the strain stakeholders, some(prenominal) inside and extraneous of the company. As a company get downs and as the communication channel enterprise environment becomes more than complex the need for strategic run becomes bang-uper. thither is a need for all state in the corporation to understand the direction and mission of the course.Companies consistently applying a disciplined approach to strategic planning are better prepared to originate as the grocery changes and as different market segments require different needs for the produces or services of the company. The Process There is no champion formula or dish up for strateg ic planning. There are however, principles and required stairs that perfect the value of strategic planning. The steps in the process described in this series of articles on strategic planning are presented below * incumbent Situation Analysis Segmentation Analysis * Strength, Weakness, Opportunities, and Threat Analysis * nubble Competencies Analysis * Key Success Factors * job Unit Strategy / wrinkle Plan * Balanced Score Card * Evaluation The choice, of the planning process that works best, should be driven by the kitchen-gardening of the organization, and by the value level of the participants. The strategic planning process must mirror the cultural values and remainders of the company. There are a piece of important steps to remember in the process of strategic planning.They include collecting a meaningful and broad data base, resourcefully opinion about separation, formation gaps, assessing core competencies, and understanding the identifying critical resources an d skills. An important distinction in the process is to recognize the difference between strategic planning and the work organism done, and strategic commending, or the creative, intuitive input. The planning element involves the data collection, goal setting, expectation definition and statement of direction.Strategic thinking includes the intuitive and creative elements. This thinking process takes into account and wait ons to leverage the values of the internal culture of the business and external characteristics of the market. Strategic planning can be a dispute process, particularly the first time it is undertaken in a company. With patience and tenacity as well as a strong team endeavor the strategic plan can be the beginning of improved and inevitable results for a company.At times when the business gets off track a strategic plan can champion direct the rec everywherey process. When strategic planning is treated as an ongoing process it becomes a competitive gain and an offensive assurance of improved day to day execution of the business practices. (Mathews & Lee) Use of an outside, independent facilitator can booster in the process and in the phylogenesis of a strategic plan. An outside resource can rear objectivity and serve as a devils abet as well as a sounding board for the point charged with plan development.In the final analysis the plan must take on the authorship and ownership of the owner and the escapers who must execute and follow the strategic plan. It must be their plan. The strategic plan, to be of real long-term value, must be treated as an ongoing business process. It must be reflective of the owners mission and pot. It must evolve and change to reflect ever-changing market and scotch conditions. It must be proactive to competitive, market and economic conditions. If those steps are followed, the strategic plan bequeath institutionalize a culture of continuous improvement and disciplined change.Strategic planning, wh en treated as a work in progress, rather than as a binder on a shelf, or a file in a computer, go outs business with a real and final stageing competitive advantage. It allow help look on and direct the quality of relationships with suppliers, employees, unions, clients, and bankers. To get your business to where you desire it to be, start with intention and drive to develop a useful and living strategic planning process. Give it strong support and startership from the top down. Develop and evolve it with participation and buy-in from the bottom up.Strategic planning is your companys road interpret to your vision. (Wheelin, 2005) Dunkin Donuts Dunkin Donuts is a business in food retail. They are the worlds largest coffee and baked goods chain. Dunkin Donuts have been in business since 1950 and have been franchising since 1995. This prerogative serves more than 2 million customers a day. Dunkin Donuts is owned by Dunkin Brands. Dunkin Brands has 2 companies in its portfolio which are Dunkin Donuts and Baskin Robins. It works under a 100% prerogative model and reduces parentage costs and can then concentrate more on menu and production innovation.Mission Statement Make and serve the freshest, intimately delicious coffee and donuts quickly and courteously in modern, well- Merchandized stores. Vision Statement America run on Dunkin Case Study From the beginning from a single restaurant in Quincy Massachusetts, Dunkin Donuts is now a world-wide brand with more than 10,000 locations in 32 countries. The evolution is testimony to the fact that people everywhere appreciate what Dunkin Donuts offers High Quality food and beverages served all day in a friendly, fast environment at a great value.In the United States, Dunkin Donuts has maintained steady, strategic and disciplined growth, hatchway wise restaurants in the core markets in the north east and in cities all end-to-end Mid Atlantic, Southern and Midwest states. (Donuts, 2011)They now have mor e than 7,000 restaurants in 36 states and the District of Columbia, Dunkin Donuts is an important part of life for millions of Americans. While Dunkin Donuts has across the country brand recognition, they have a square opportunity to expand the number of restaurants in the United States as well as all around the world.The company believes that they can double the footprint in the U. S to 15,000 Dunkin Donut Restaurants over the next 20 years. The company has a strong comportment internationally as well with more than 3000 Dunkin Donut Restaurants over 31 international countries across 4 continents. The company maintains stable global expanding upon, opening innovative restaurants in Europe, Asia, Middle East and Latin and South American countries. Dunkin Donuts has already opened more than 88 locations in Greater china and has nearly opened 900 shops in South Korea.In 2010, the brand Re-entered Russia with new restaurants in Moscow, and in 2012, the first set of Dunkin Donut R estaurants were opened in India and Guatemala. (Donuts, 2011) To action this highschool rate of growth across most of the world, and a vision to continue to achieve and steadily grow at a high rate Dunkin Donuts under the company Dunkin Brands has a strongly formu upstartd Growth Strategy. Growth Strategy Growing a business requires ongoing work in an environment of continually emerging global challenges.One of the most wakeless aspects of the growth process is the formation and distribution of competences indoors and among organizations. To a large extent, the challenges for businesses are innovation and internationalization to grow businesses. The goal of any business growth is to summation revenue and profitability with a reduced business cycle time that is more productive, innovative and export-led, delivers high-value products/services for customers and markets around the world. The following are major areas where businesses have to take initiatives to support growth sc hema * Market Growth Financial Transformational Initiatives * Supply Chain Management * Outsourcing imagination (Kumar, 2010) Growth Strategies used by Dunkin Donuts 1. growing comparable store gross revenue and profitability in Dunkin Donuts U. S. The companys largest in operation(p) segment, Dunkin Donuts U. S. experienced controlling comparable store gross sales growth in eight of the end ten fiscal years. The fiscal year 2011 with comparable store sales growth of 5. 1%, was the highest annual comparable store sales growth since 2005, and 7. 4% for the fourth quarter of 2011, which was the highest quarterly performance in the historical seven years.There is a strong intention to continue building on comparable store sales growth momentum and improving profitability through the following initiatives * Further add-on coffee and beverage sales. Since the late 1980s, the company has been transformed into a coffee-focused brand and have developed a significantly enhanced menu of beverage products. Approximately 60% of Dunkin Donuts U. S. franchisee-reported sales for fiscal 2011 were generated from coffee and some other beverages, which is believe to generate profitd customer visits to the stores and higher unit volumes, and which produce higher margins than their other products.They plan to increase the coffee and beverage revenue through continued new product innovations and related merchandising, including advertising campaigns such as America Runs on Dunkin in 2011 Dunkin Donuts created a product called the K- Cups, which is a 12$ box with 14 K-Cups. This product had been an idea from the customers themselves, as it is an easier and more convenient method. It is used in the Keurig create from raw material system. The company that makes them, Green Mountain Coffee Roasters Inc. , first announced its federation with Dunkin Donuts in February.Dunkins decision to sell the K-Cups only in its outlets will help drive customers at that place and perhap s lead them to make additional purchases. It could also keep the brand from becoming too omnipresent, which is widely believed to be a mistake made by Krispy Kreme Doughnuts Inc. when it started selling its products in fluff stations and grocery stores. * Continue to develop enhancements in restaurant operations. The company will continue to maintain a highly operations-focused culture to help the franchisees maximize the quality and consistency of their customers in-store experience, as well as to increase franchisee profitability.In support of this, there has been an initial enhancement and ongoing restaurant manager and crew training programs and developed new in-store planning and tracking applied science tools to assistant the franchisees. As a result, over 164,000 respondents, representing approximately 93% of all respondents, to the companys Guest Satisfaction Survey program in December 2011 rated their overall experience as Satisfied or super Satisfied. 2. Continue Dun kin Donuts U. S. Immediate store expansion The company believes there is a significant opportunity to grow the points of distribution for Dunkin Donuts in the U. S. iven the strong electromotive force outside of the Northeast region to increase the per-capita pe acquitration to levels closer to those in their core markets. The companys development strategy resulted in 243 net new U. S. store openings in fiscal 2011. In 2012, it is expected that their franchisees will open an additional 260 to 280 net new points of distribution in the U. S. , chiefly in existing developed markets. They believe that strategy of pore on contiguous growth has the potential to, over approximately the next 20 years, more than double our current U. S. footprint and reach a follow of 15,000 points of distribution in the U.S. The following table details the per-capita penetration levels in the U. S. regions. Region Population(ml) Stores Penetration Core 36. 0 3 768 19 560 Core 36. 0 3 Eastern Establishe d. 53. 8 2 227 124 160 Eastern Established. 53. 8 2 Eastern emerge 88. 7 891 199 600 891 Eastern Emerging 88. 7 891 199 western United States 130. 0 129 11 008 100 West 130. 0 129 11 Table 1 As per December, 2011 * Increase penetration in existing markets. In the traditional core markets of stark naked England and New York, there now is a Dunkin Donuts store for every 9,560 people.In the near term, there is an intention to focus the core development on other markets east of the Mississippi River, where currently there is only approximately one Dunkin Donuts store for every 99,600 people. In certain established Eastern U. S. markets outside of their core markets, such as Philadelphia, Chicago and South Florida, they have already achieved per-capita penetration of greater than one Dunkin Donuts store for every 24,160 people. * Expand into new markets using a disciplined approach. The Company believes that the Western part of the U. S. epresents a significant growth opportunity for Dunkin Donuts. However, a disciplined approach to development is the best one for the brand and franchisees. Specifically, in the near term, they intend to focus on development in markets that are adjacent to the existing base, and mostly move westward in an immediate fashion to less penetrated markets, providing for marketing and supply chain efficiencies within each new market. * Focus on store-level political economy. In recent years, they have undertaken significant initiatives to further enhance store-level economics for their ranchisees, * Reducing the cash investment for new stores. * Increasing beverage sales. * forbidding supply chain costs and implementing more efficient store care systems. The Company believes these initiatives have further increased franchisee profitability. Dunkin Donuts recently entered into an agreement with the franchisee-owned supply chain cooperative that provides for a three-year phase in of flat placard pricing across the franchise system, wh ich, coupled with the cost reductions noted above, should lead to cost savings across the entire franchise system.It is believed that this will be one of the drivers of the immediate development strategy, by improving store-level economics in all markets, but particularly in newer markets where their growth is stoogeed. Store-level economics have also continued to benefit from increased national marketing and from the creation of Dunkin K-Cups into their restaurants. 3. Drive Accelerated International Growth. They believe there is a significant opportunity to grow points of distribution Dunkin Donuts in international markets.Their international expansion strategy has resulted in more than 3,500 net new openings in the last ten years. The key Elements of the future Growth Strategies are * Grow in Their existing core markets. The Companys international development strategy for Dunkin Donuts includes growth in their existing core markets. Dunkin Donuts intends to focus on growth in S outh Korea and the Middle East, where they currently have 857 and 229 points of distribution, respectively. During fiscal 2012, the company is expected to open approximately 350- 450 new points of distribution internationally, principally in their existing markets.However, there can be no assurance that their franchisees will be successful in opening this number of, or any, additional points of distribution. * Capitalize on other markets with significant growth potential. Dunkin Donuts intends on expanding in certain international focus markets where the brand does not have a significant store armorial bearing, but where they believe there is consumer demand for the products as well as strong franchisee partners. In 2011, it was announced that an agreement with an experienced QSR franchisee to enter the Indian market with Dunkin Donuts brand.The agreement calls for the development of at least(prenominal) 500 Dunkin Donuts restaurants throughout India, the first of which is expecte d to open by the flash quarter of 2012. By teaming with local operators, it is believed they are better able to change the brands to local business practices and consumer preferences. * Further develop the franchisee support infrastructure. Dunkin Donuts plan to increase the focus on providing international franchisees with operational tools and services that can help them to efficiently operate in their markets and become more profitable.Dunkin Donuts plans to focus on improving on native-language restaurant training programs and updating existing restaurants for the new international retail restaurant designs. To accomplish this, we are dedicating additional resources to our restaurant operations support teams in key geographies in order to assist international franchisees in improving their store-level operations. (Brands, 2012) Segment Q2 2012 Comparable Store sales Growth Q1 2012 Comparable Store sales Growth Q2 2012 system of rules wideSales Growth Q1 2012 System wideSales Growth Dunkin Donuts U. S 4. 0% 7. 2% 7. % 11. 5% Dunkin Donuts International 3. 5% 2. 3% 1. 5% 4. 8% The long-term prospects of Dunkin Brands seem very impressive. Dunkin Brands is stipendiary as a percent of franchisee top-line and it bears basically no store operating costs itself. With only 36 company- owned points of distribution out of a total of 17,016 as of June 30, 2012, the company is less affected by store level costs and profitability and fluctuations in commodity costs than galore(postnominal) other QSR operators. (Saibus, 2012) SWOT ANALYSIS Strengths * High operating Profit leeway * Lower Costs than Industry High Brand Recognition * seemly Socially Responsible Weaknesses * High Debt * Low Return on fairness Ratio * High Interest Rate * Need to better manage Fixed assets Opportunity * Pay off some debt * Open more stores in the West * Capitalize on high customer inscription Threats * Low entry Barriers into Industry * Health Conscious society and Starbucks focusing on Health and Wellness * Krispy Kreme expands into the Global Market Part B Legal, Moral and Ethical Issues * Recently in news articles, it was reported that there were approximately 350 lawsuits between Dunkin and its franchisees.The company has been accused of aggressively targeting shop owners in an effort to terminate franchise agreements and in the process collect sizeable fees and penalties for alleged contract violations. Michelle King is Dunkins Director of Public dealings and he states that strongly encouraged Dunkin Brands to take a step foul and reconsider its policy of litigation and instead embrace its process of intermediation to settle disputes with franchise owners. He said, It is the right thing to do to grow the brand in an increasingly challenging and competitive environment.DDIFO is ready, willing and able to help see this process of mediation come to fruition. (Leiber, 2009) * Due to the sudden increase in the consciousness of health and wellness, Dunkin Do nuts has come across a moral dilemma as most of their Products go against the code of whole food. Their competitor Starbucks has taken a turn and concentrated more of kempt eating which has created a drop in the business of Dunkin Donuts, to overcome this the company has also started concentrating on health food and beverages. Dunkin Brands leaders have an added responsibleness to ensure that policies are communicated to employees and that business practices are designed to prevent incorrect conduct. They have a responsibility to build and maintain a culture of compliance by ensuring employees know that our integrity should never be compromised in order to achieve business results. The Code of Conduct provides employees and directors with guidance on doing the right thing. However, it is not an all inclusive list of dos and donts.The Overview sections outline the intended behavior and the Expectations and Examples of What to Watch Out For sections provide some examples of what e mployees and directors should and should not do. (Dunkin, 2012) Conclusion and Recommendation Strategic planning and guidance is what makes or breaks a company or Brand. Dunkin Donuts, The Company I have done my study on is a brand which I think has put a lot of thought into the planning of business. Their techniques and business perceive is what has brought them to be Americas most popular quick service restaurant chain.In this essay I have studied the growth strategies of the company and how from a single outlet in 1950, today it has a presence in most countries in the world. This is possible because of a proper vision that the company had and a set of strong Growth Strategies. The company has strongly believed in spreading and making their brand what people live by. I believe that Dunkin Donuts should aggressively target India, as it is expected to Grow over half a billion in Breakfast Food sales by 2016.The Asia pacific Region is growing rapidly and should be Targeted within t he next five years. The company should capitalize more on college campuses as what they serve is directly related to the average diet of a teenager. They should target this market in both America and abroad. Bibliography Brands, D. (2012). Annual Report 2012. massechusetts Edgar Online. Donuts, D. (2011). Global Presence. Retrieved April 12, 2013, from Dunkindonuts http//www. dunkindonuts. com/content/dunkindonuts/en/company/global. tml Dunkin. (2012). Code of Business Conduct and Ethics. Canton. Kumar, D. (2010). enterprise Growth Strategy Vision, Planning and Execution. Surrey Ashgate Publishing Group. Leiber, N. (2009, October 8). Attorneys Criticize Dunkin Donuts Litigious Behavior. Business Weekly . Mathews, J. F. , & Lee, H. Business Devlopment Index. Columbus Ohio State University. Saibus. (2012). Dunkin Brands Is Brewing Up operose Perfomance. Seeking Alpha. Wheelin, T. (2005). Concepts in Strategic Mangement.