Business Model and Strategic Plan Part II: SWOTT Analysis Paper A SWOTT analysis is a critical examination used to evaluate both internal and external elements of a company and the influence they have over the company. A SWOTT analysis provides a company with information about achieved and achievable strengths and weaknesses, threats and risks as well as current business trends. For existing businesses it allows them to assess their market standing and can help them gain a better understanding for what they can do to have a competitive edge for the future. With a growing trend in health, people are continuously looking for alternatives to achieve a healthy lifestyle. Juicing is growing in popularity and is replacing the once favored sweet breakfast treat.
Studies support that “juicing can reduce your risk of cancer, boost your immune system, help you remove toxins from your body, aid digestion and help you manage and lose weight” (Jennifer K. Nelson, 2014).
Introducing juicing into Dunkin Donuts stores can give them the competitive edge they need to maintain their current lead in the market. However, before implementing a plan to add this new division it’s critical to complete a SWOTT analysis to determine how Dunkin’ Donuts is doing. The SWOTT analysis will also include an evaluation of economic, legal and regulatory forces and trends, critiques on how well they adapt to change and an explanation of the supply chain of the new division of the existing business. Strengths
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Dunkin’ Donuts is known for their variety of baked goods and coffees and have expanded across America with more than 10,000 restaurants across 38 states and 32 countries since first opening in 1950—making for a well-developed brand (Altmann, 2007).
Dunkin’ Donuts stores are adorned with their brightly colored logo and the freshly brewed coffee and sweet donut aroma are unmistakable. They have mastered the art of opening locations in highly trafficked areas making it easy for loyal customers to purchase a coffee while attracting new customers as well (Altmann, 2007).
The environment of their stores is not only bright and cheerful but so are the employees, this is done by creating an encouraging and motivating work place for them through management. They have also opened many international stores opening themselves up to a new market increasing revenue and in turn increasing their budget for expansion. They offer many incentives for their loyal customers while encouraging new customers through coupons and loyalty programs (Altmann, 2007).
Another strength that Dunkin Donuts has is their ability to change with the market and keep consumers happy. Their ability to change is evident in there supply chain.
In order to deliver and transport their products more efficiently they have adapted new technologies in order to do so. “Mid-Atlantic Distribution Center (MADC).
Located in Easthampton, N.J., MADC supplies the raw materials—flour, glaze, muffin mix, and other ingredients—that end up as your morning coffee and donut combo”.” MADC is one of four cooperative Dunkin’ Donuts distribution centers located in the eastern United States and each regional center is an independently owned nonprofit corporation”. “MADC uses Appian’s Direct Route, an automated route scheduling system”.” Direct Route optimizes truck routes based on customer locations and types, volume and time requirements, road network distances, and vehicle costs and capacities”. “It also calculates and accommodates customer time windows, driver work time parameters, and dispatch parameters”. “The software creates optimized routes that can be quickly modified to meet real-world conditions (Edwards, 2005)”. Their adaptation to new technology within their supply chain is evidence that they can add the needed additional ingredients needed for juicing. Adding this division is not only going to benefit the company itself but stakeholders as well. This will offer local farmers more opportunities for work and help those communities thrive. Weaknesses
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Although Dunkin’ Donuts has established a good reputation over the last six decades brewing high quality beverages and baking sweet treats they too have their weaknesses. Their competitors are their largest weakness. Dunkin’ Donuts doesn’t spend much on their advertising and marketing as their competition does. The increasing cost of coffee beans and raw materials is also a weakness as their product pricing is already considered expensive (Altmann, 2007).
Current trends pose as another weakness for them. As the trend for healthy living continues it’s important for them to stay current and introduce new products to meet those new consumers’ needs and wants (Altmann, 2007).
Another weakness Dunkin Donuts faces are the legal and regulatory forces and trends that harbor setbacks for the company. Dunkin donuts stores are franchised out and it’s up to each individual stores franchisee owner to make sure they follow all of the rules, regulations and requirements set for the store. The most common issue among franchises is related to failed payments. Such as the case in Richmond, Virginia in 2013 when 7 stores were temporarily closed because they failed to pay for franchise and advertising fees (Blackwell, 2013).
Opportunities
Coffee consumption is on the rise in many international markets where there is an increase in disposable income. This is due to the growing western influence and acceptance of western trends–China being a prominent example (Adam, 2010).
With rapid globalization it’s now easier than ever to obtain information needed for expansion—allowing for Dunkin’ Donuts to better serve and meet customer needs (Adam, 2010).
The state of our economy is another opportunity for Dunkin’ Donuts. They offer comfort food that is warm and sugary at a price that is considerably lower than other comfort food items (Adam, 2010).
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Threats
A current threat to Dunkin’ Donuts is the increased competition they face from not only other coffee house but restaurants, convenience stores and supermarkets (Adam, 2010).
Other threats they face are cultural and political issues in foreign countries as well as the fragile state of worldwide production of specialty coffees (Adam, 2010).
Another threat that poses as a double edge sword is the advancement of technology. As technology advances new machines are created to make stores more efficient, however, this also means that new coffee machines are created and priced appropriately for everyday consumers to purchase and brew coffee in the comfort of their own home—without the hassle, wait time and cost (Altmann, 2007).
However, their largest threat is the growing trend for healthier alternatives (Altmann, 2007).
Although this poses as a threat it opens the door for opportunity—alas the new proposed division, Juicing. Issues/Opportunities
After the SWOTT analysis it’s evident that there are areas where improvement is needed and can be achieved. Legal issues regarding franchisees can be remedied through quality assurance. This can be handled by having secret shoppers to assure there is store continuity and being more vigilant in the accounting department can help avoid any failed payments. An additional issue is the strong competition within the market. This issue can be remedied by the proposed division, juicing, to help give the company the competitive edge they need to be a step ahead of its competitors. Hypothesis
Dunkin’ Donuts has the potential to take the market by storm by adding a new juicing division. With consumers desire for healthy living Dunkin’ Donuts can provide a healthy alternative. As long as they remain vigilant to changing trends and can adapt to the market there is no option for them besides success.
References
Adam. (2010, June 2).
Dunkin’ Donuts SWOT Analysis. Retrieved November 10, 2014, from SWOT Analysis: http://www.freeswotanalysis.com/fast-food-companies-swot-analysis/14-dunkin-donuts-swot-analysis.html Altmann, M. (2007, March 14).
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Coffee Shop Industry – A Strategic Analysis. Retrieved November 10, 2014, from Grin: http://www.grin.com/en/e-book/111348/coffee-shop-industry-a-strategic-analysis Blackwell, J. (2013, July 22).
DUNKIN’ DISPUTE. Retrieved November 11, 2014, from Times Dispatch: http://www.timesdispatch.com/business/economy/legal-dispute-closes-several-area-dunkin-donuts/article_f7995b14-39bc-58df-84af-96130f6f2a82.html Dunkin’ Donuts Marketing Strategy Case. (2010, August 31).
Retrieved November 10, 2014, from Managing Man: http://managing-man.blogspot.com/2010/08/dunkin-donuts-hypothetical-marketing.html Edwards, J. (2005, April).
Time To Deliver the Donuts. Retrieved November 11, 2014, from Inbound Logistics: http://www.inboundlogistics.com/cms/article/time-to-deliver-the-donuts/ Facts and figures . (2014).
Retrieved November 2014, 2014, from Dunkin’ Donuts:
