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DUNKIN' Report

Michael Valentino

Nina Vu

Rita Dong

Tram Nguyen

Company Overview

Forces and Factors

Suppliers

Technology & Innovation

Government

Industry Structure

Buyers

Rivalry

Substitutes

Entrants

Complements

Growth Rate

Suppliers

  • Incredibly fragmented across many countries
  • Compete to offer the lowest prices to big firms in the U.S.

Topic

Buyers

Topic

  • Price sensitive (especially in urban areas)
  • Low-switching costs
  • Can produce on their own

Threat of Entry

  • Incumbency advantages - brand notoriety
  • Small shops do arise, don't expand

Topic

Rivalry

  • Few big firms with similar products and similar basis of competition
  • Geographic expansion

Topic

Substitutes

  • The most unattractive force
  • Ready-to-drink and ground coffee allow customers to bypass coffee shops

Topic

Quantitative Analysis of Profitability

Dunkin' Profitability = 17.40%

Average Profitability

= 19.72%

Takeaway

Competitive Advantage

Starbucks

COST

WTP

COST

Competitive

Landscape

WTP

COST

COST ANALYSIS

Starbucks - differentiation strategy

high COGS premium experience

high quality coffee

Dunkin'

WTP

COST

economy of scale above average coffee

economy of scope convenient service

Dunkin' - cost leadership strategy

Dunkin' - differentiation strategy

economy of scale above average coffee

economy of scope convenient service

McDonald's

WTP

COST

economy of scale average coffee

standardized goods coffee

McDonald's - cost leadership strategy

PRICE PER CUP

Profit Formula

CVP

Business

Model

Resources

&

Processes

Customer Value Proposition

CVP

Profit Formula

04

03

01

02

Profit Margin

Resource Velocity

Revenue Model

Cost Structure

Price of each cup of coffee x number of cups of coffee sold

  • COGS
  • Operating Expenses

NextGen stores

  • debut

  • fully developed system

Resources & Processes

Supply

Heavy Marketing

Manufacturing

Rebranding

Resources &

Processes

New CEO

Research & Development (R&D)

DUNKIN'!

DONUTS!

Supply

Supply

  • Economies of Scale

  • Economies of Scope

Manufacturing

Key Human Resource

New CEO

Heavy Marketing

Marketing

Rebranding

R&D

The Strategic Problem

Recommendation

THE BIG IDEA

Creating Social Value

Improving relationships

  • Employee training
  • Supplier compensation

Target young culture

  • SAT Special!
  • Family Perks

Innovative Products

  • Local special
  • Sponsored Limited addition products
  • Time-space flavors rotation

Dunkin' Donuts Korea 2016

Trade-offs

Localized Business

National Brand Image

Brand recognition

COGS+SG&A+R&D expenses

Trade-offs

Alternatives

  • selling merchandise
  • move away from quick service business model

Risks

  • Experimentation
  • Franchisees

Risks

Strategic Fit

References

Dunkin’ Brands Group, Inc. 2006. “Dunkin’ Donuts Launches New Advertising Campaign “America Runs on Dunkin’." (April 10).

______.2018. Form 10-K. (December 29).

______2018b. “Dunkin’ Brands Presents Three-Year Plan Fueled by the Dunkin’ Donuts U.S “Blueprint for Growth” at Its 2018 Investor & Analyst Day”.

______. 2019b. “Our Commitment to Coffee”.

Fast Food Menu Prices. 2019 “Dunkin’ Donuts Menu Prices”.

___________________. 2019 “McDonalds Menu Prices".

___________________. 2019 “Starbucks Menu Prices".

McDonald’s Corporation. 2018. Form 10-K. (December 31).

MarketLine. 2019. Dunkin’ Brands’ Group, Inc. Company Profile.

Raben, Natalia. 2018. “Dunkin’ Donuts Rebrands - Serves Up Lesson in Customer - Centricity”.

Reuters. 2018. “Americans are drinking a daily cup of coffee at the highest level in six years survey”.

Starbucks Corporation. 2018. Form 10-K. (September 30).

Reference

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