Strategic Planning Case Study- Dunkin Donuts

St identifygic Hospitality Management A case analysis of Dunkin Donuts with a focus on tools available for strategic be after. April 2013 Abstract The following essay is based on the Quick Service Restaurants defacement (QSR)- Dunkin Donuts. The society has been studied and a case study regarding the stirth of the participation from 1950 till to twenty-four hour period has been studied. issue strategies of the company go by dint of been used to understand how they reached the position of the Statess immensest QSR.The Legal, Moral and Ethical Issues of the company feel also been studied and the solutions to those issues and the implementation has been studied Con tents Abstracti Introduction1 Strategic Planning1 The swear turn up1 Dunkin Donuts3 Mission Statement3 Vision Statement3 object slighton demand3 egression Strategy4 change Strategies used by Dunkin Donuts4 SWOT ANALYSIS9 Legal, Moral and Ethical Issues10 Conclusion and Recommendation11 Bibliography12 go b ad A Introduction Strategic Planning Strategic supply is a process that brings to life the mission and plenty of he enterprise. A strategic program, wellhead crafted and of value, is determined from the top down considers the internal and external purlieu around the telephone circuit is the work of the managers of the business, and is communicated to all(prenominal) the business stakeholders, both inside and away of the company. As a company grows and as the business environment becomes to a greater extent than(prenominal) complex the need for strategic planning becomes enormouser. on that point is a need for all people in the corporation to understand the direction and mission of the business.Companies systematically applying a disciplined approach to strategic planning are better prepared to evolve as the market changes and as different market segments require different needs for the products or services of the company. The Process There is no one formula or proce ss for strategic planning. There are however, principles and require steps that optimize the value of strategic planning. The steps in the process described in this series of articles on strategic planning are presented below * Current Situation compend Segmentation Analysis * Strength, Weakness, Opportunities, and Threat Analysis * Core Competencies Analysis * Key Success Factors * line of work Unit Strategy / Business Plan * Balanced Score Card * Evaluation The choice, of the planning process that whole kit best, should be driven by the culture of the organization, and by the comfort level of the participants. The strategic planning process must mirror the cultural values and goals of the company. There are a number of important steps to remember in the process of strategic planning.They include collecting a meaningful and broad data base, resourcefully cerebration about separation, defining gaps, assessing core competencies, and understanding the identifying critical resour ces and skills. An important distinction in the process is to secernate the difference mingled with strategic planning and the work being done, and strategic idea, or the creative, intuitive input. The planning element involves the data collection, goal line upting, expectation definition and statement of direction.Strategic thinking includes the intuitive and creative elements. This thinking process takes into account and helps to leverage the values of the internal culture of the business and external characteristics of the market. Strategic planning coffin nail be a challenging process, particularly the first time it is under taken in a company. With intentness and perseverance as well as a real team effort the strategic plan can be the beginning of improved and predictable results for a company.At times when the business gets off compensate a strategic plan can help direct the rec overy process. When strategic planning is hardened as an ongoing process it becomes a comp etitive advantage and an offensive presumption of improved day to day execution of the business practices. (Mathews & Lee) Use of an outside, independent facilitator can help in the process and in the instruction of a strategic plan. An outside resource can provide objectivity and work as a devils advocate as well as a sounding control panel for the management charged with plan ontogenesis.In the final analysis the plan must have the authorship and ownership of the owner and the managers who must execute and follow the strategic plan. It must be their plan. The strategic plan, to be of veridical long-term value, must be treated as an ongoing business process. It must be pondering of the owners mission and vision. It must evolve and change to reflect changing market and economic conditions. It must be proactive to competitive, market and economic conditions. If those steps are followed, the strategic plan will institutionalize a culture of continuous improvement and discipline d change.Strategic planning, when treated as a work in progress, rather than as a binder on a shelf, or a file in a computer, provides business with a real and lasting competitive advantage. It will help determine and direct the tonicity of relationships with suppliers, employees, unions, customers, and bankers. To get your business to where you desire it to be, start with determination and drive to develop a useful and life story strategic planning process. Give it strong support and consortership from the top down. Develop and evolve it with meshing and buy-in from the bottom up.Strategic planning is your companys road map to your vision. (Wheelin, 2005) Dunkin Donuts Dunkin Donuts is a business in aliment retail. They are the worlds largest umber and baked goods chain. Dunkin Donuts have been in business since 1950 and have been franchising since 1995. This certification serves much than 2 million customers a day. Dunkin Donuts is owned by Dunkin Brands. Dunkin Brands ha s two companies in its portfolio which are Dunkin Donuts and Baskin Robins. It works under a 100% franchise model and reduces store be and can then stick out much on menu and product innovation.Mission Statement Make and serve the freshest, most 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 Global trademark with more than than 10,000 locations in 32 countries. The produce is testimony to the fact that people eachwhere appreciate what Dunkin Donuts offers High feature 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 juvenile restaurants in the core markets in the northwards east and in cities all throughout Mid Atlantic, Southern and Midwest states. (Donut s, 2011)They now have more 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 nationwide brand recognition, they have a significant 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 conterminous 20 course of studys. The company has a strong figurehead worldwidely as well with more than 3000 Dunkin Donut Restaurants over 31 planetary countries crossways 4 continents. The company maintains stable global expansion, opening new 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 firs t set of Dunkin Donut Restaurants were opened in India and Guatemala. (Donuts, 2011) To achieve this high 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 formulated Growth Strategy. Growth Strategy Growing a business requires ongoing work in an environment of continually appear global challenges.One of the most fundamental aspects of the growth process is the formation and distribution of competences within 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 amplification tax income and profitability with a reduced business cycle time that is more productive, innovative and export-led, de expectrs high-value products/services for customers and markets around the world. The following are major areas where businesses have to take initiatives t o support growth strategy * Market Growth Financial Transformational Initiatives * Supply Chain Management * kayoedsourcing Concept (Kumar, 2010) Growth Strategies used by Dunkin Donuts 1. Increase same store gross revenue and profitability in Dunkin Donuts U. S. The companys largest run segment, Dunkin Donuts U. S. experienced positive parallel store sales growth in eight of the last 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 past seven years.There is a strong intention to continue spend a pennying on comparable store sales growth momentum and meliorate profitability through the following initiatives * bring forward increase coffee and beverage sales. Since the late 1980s, the company has been transform into a coffee-focused brand and have real a significantly enhanced menu of b everage products. almost 60% of Dunkin Donuts U. S. franchisee-reported sales for fiscal 2011 were generated from coffee and other beverages, which is believe to generate increased customer visits to the stores and high 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 marketing, 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 brewing system. The company that makes them, Green Mountain Coffee Roasters Inc. , first announce its partnership with Dunkin Donuts in February.Dunkins decision to sell the K-Cups only in its outlets will help drive customers there and perhaps lead them to make additional purchases. It cou ld also keep the brand from becoming too omnipresent, which is astray believed to be a mistake made by Krispy Kreme Doughnuts Inc. when it started selling its products in gas station 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 develop new in-store planning and tracking technology tools to assist the franchisees. As a result, over 164,000 respondents, representing most 93% of all respondents, to the companys Guest Satisfaction Survey program in December 2011 rated their boilers suit experience as Satisfied or Highly Satisfied. 2. Continue Dunkin Donuts U. S. Immediate store expansion The company believes t here is a significant opportunity to grow the points of distribution for Dunkin Donuts in the U. S. iven the strong potential outside of the Northeast region to increase the per-capita keenness to levels closer to those in their core markets. The companys victimization 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. , principally in live developed markets. They believe that strategy of focusing on contiguous growth has the potential to, over approximately the next 20 years, more than double our current U. S. footprint and reach a total 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 easterly Established. 53. 8 2 227 124 160 Eastern Established. 53. 8 2 Eastern Emerging 88. 7 891 199 600 891 Eastern Emerging 88. 7 891 199 westerly 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 New 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 disseminated multiple sclerosis River, where currently there is only approximately one Dunkin Donuts store for every 99,600 people. In certain schematic 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 smart set 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 on e 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 generally 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. * change magnitude beverage sales. * Lowering supply chain costs and implementing more efficient store management systems. The guild believes these initiatives have further increased franchisee profitability. Dunkin Donuts recently entered into an capital of New Hampshire with the franchisee-owned supply chain cooperative that provides for a three-year level in of flat invoice pricing across the franchise system, which, 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 targeted. Store-level economics have also continued to benefit from increased national marketing and from the introduction of Dunkin K-Cups into their restaurants. 3. Drive quicken 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 South Korea and the Middle East, where they current ly 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 presence, 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 500 Dunkin Donuts restaurants throughout India, the first of which is expected to open by the warrant quarter of 2012. By teaming with local operato rs, it is believed they are better able to adapt 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 2012System 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 compensated as a percentage 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 many other QSR operators. (Saibus, 2012) SWOT ANALYSIS Strengths * High operating Profit Margin * Lower Costs than diligence High Brand Recognition * Becoming socially Responsible Weaknesses * High Debt * Low Return on Equity Ratio * High Interest tread * Need to better manage Fixed assets Opportunity * Pay off some debt * Open more stores in the West * Capitalize on high customer Loyalty 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 Ethi cal 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 hefty fees and penalties for alleged contract violations. Michelle King is Dunkins Director of Public Relations and he states that strongly encouraged Dunkin Brands to take a step back and reconsider its policy of litigation and instead embrace its process of mediation 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 Donuts has come across a moral dilemma as most of their Products go against the code of healthy food. Their co mpetitor Starbucks has taken a turn and concentrated more of healthy 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 obligation to visualize that policies are communicated to employees and that business practices are designed to prevent improper 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 employees and directors should and should not do. (Dunkin, 2012) Conclusion and Recommendation Strategic planni ng and management 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 sense 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 promptly and should be Targeted within the next five years. The company should capitalize more on college campuses as what they serve is directly relat ed 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). go-ahead 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. capital of Ohio Ohio State University. Saibus. (2012). Dunkin Brands Is Brewing Up Strong Perfomance. Seeking Alpha. Wheelin, T. (2005). Concepts in Strategic Mangement.