Our Dunkin' Donuts PESTLE Analysis investigates the external factors affecting the company, such as political, economic, and environmental ones.
If you are a Donut lover, you are advised to grab a box of Donuts already because, after reading this article, you will be craving some.
Today's article will be a treat for Donut lovers because this article is about one of the biggest Donut and baking brands. Any idea what brand are we covering today? Yes, you must have guessed it by now. This article is about Dunkin' Donuts!
Recall the sweet taste and soft dough of its Donuts. Aren't we all just amazingly crazy about Dunkin' Donuts? The Donuts offered by Dunkin' Donuts is so amazing that most of us forget that it has other things on its menu too.
Dunkin' Donuts is undoubtedly famous worldwide for its Donuts, and rightly so. However, the Donut brand offers other things, such as coffee, pastries, and sandwiches.
Dunkin' Donuts has built its reputation in the food and beverages industry. After looking at the brand's success, we have decided to conduct a Dunkin' Donuts PESTLE Analysis.
PEST analysis is a technique that enables analysts to identify the external factors that influence an organization's operations. It highlights Political, Economic, Technological, Social, Environmental, and Legal factors that impact an organization's operations.
In this article, we will analyze what external factors impact the operations of Dunkin' Donuts. Now that we have discussed what PESTLE analysis is let's have a look at the history and current operations of Dunkin' Donuts to make you guys more aware of the brand.
The roots of Dunkin' Donuts can be traced back to 1948 when a guy named William Rosenberg opened a Coffee and Donut shop in Quincy, Massachusetts. His aim was to sell fresh, delicious Coffee and fresh Donuts in a well-merchandised shop. Initially, the name of the Donut shop was "Open Kettle."
Two years later, Rosenberg changed the name of its shop to Dunkin' Donuts. People were immediately drawn towards Dunkin' Donuts Coffee and Donuts. As the brand's customer base increased, Rosenberg decided to sell its franchise across the US in 1955.
The brand further grew over the years, and it finally moved overseas in 1970 for the first time. Dunkin' Donuts opened its first international branch in Japan. In 1972, the brand introduced a snack called "Munchkins." It became widely popular among people, and Dunkin' Donuts gained further popularity.
In the coming years, the brand further added more products to its menu, which caused an increase in its revenue. In 1998 Dunkin' Donuts operated in 2,500 locations worldwide and generated $2 billion in revenue each year.
Later, the Donut brand merged with brands and even acquired some to increase its market share. This helped the brand to penetrate further in the market. Recently, Dunkin' Donuts diversified its portfolio and started offering juicy Sandwiches.
Currently, Dunkin' Donuts has more than 11,300 outlets all over the world. Out of these 11,300 outlets, 8,500 of them are in the US. This shows how much Dunkin' Donuts is demanded in the US.
Such a huge number of outlets help the brand generate huge revenue. For example, in 2019, Dunkin' Donuts generated $1.37 billion in revenue. Moreover, the brand requires several employees to carry out its task efficiently. This is why it has a vast workforce of more than 250,000 employees.
Now that we have discussed the history of Dunkin' Donuts and its current operations, so let's proceed further and carry out Dunkin' Donuts PESTLE Analysis.
Political Factors Affecting Dunkin' Donuts
The action of the governments directly impacts businesses all over the globe. Therefore, every business has to keep a closer look at the government policies and actions to ensure its smooth running.
Similarly, Dunkin' Donuts also relies on the actions of the government heavily. This is why several political factors impact Dunkin' Donuts. The major purpose of Dunkin' Donuts is to maximize profits, and one thing that affects the profit of Dunkin' Donuts is the tax rate.
Dunkin' Donuts will retain less profit if a government imposes high tax rates. This would affect the Donut brand adversely since it would now have less money to give dividends to its shareholders.
Other than that, low profit will push Dunkin' Donuts to increase the prices of its products so that it can maximize its profit. This will make the products of Dunkin' Donuts expensive for the customers, and as a result, the sales of Dunkin' Donuts will fall.
Moreover, Dunkin' Donuts is significantly impacted by the competition regulations made by the government. However, like any other business, Dunkin' Donuts also desires fair competition in the market.
Strict government policies that ensure competition and fair business practices will help Dunkin' Donuts to function smoothly in the market. Other than that, the brand requires political stability to expand. In case of political instability, the sales of Dunkin' Donuts will fall, and the brand's revenue will also fall.
Economic Factors
Businesses are directly linked to the economy of the country. When businesses do well, the economy of a country does well. However, the performance of a business is significantly impacted by economic factors.
Dunkin' Donuts is a widely spread brand greatly impacted by economic factors. One economic factor that highly affects Dunkin' Donuts' operations is inflation. Inflation increases the price of every commodity. Due to this, the inputs required by Dunkin' Donuts become expensive.
The cost of expensive inputs is transferred to the customers, which makes the products of Dunkin' Donuts expensive. This affects the sales of Dunkin' Donuts adversely since people are reluctant to buy the expensive products of Dunkin' Donuts.
Besides inflation, unemployment is another economic problem that impacts the brand overall. High unemployment lowers the standard of living of the people. Due to this, people will have less money to spend on extravagant commodities such as donuts. As a result, the sales of Dunkin' Donuts will fall, and the brand will generate low revenue.
Moreover, other economic factors also impact Dunkin Donuts, such as interest rates. Higher interest rates affect the Donut brand negatively since it encourages people to save money instead of spending it. This leads to a fall in demand for the products of Dunkin' Donuts, and the brand struggles financially as a result.
Moreover, businesses often take loans from banks to expand their operations. High-interest rates will discourage Dunkin' Donuts from taking the loans. As a result, the growth and expansion of Dunkin' Donuts will hinder.
Social Factors
The trends, actions, and behavior of society impact businesses significantly. Therefore, if a brand wants to succeed, it must find a way to mold itself with the values and culture of the society where it operates.
Dunkin' Donuts operates in more than 36 countries. As a result, it experiences different cultures and values in each society. Hence, several social factors impact Dunkin' Donuts.
One of the social factors that highly impacts Dunkin' Donuts is the taste of the people and their liking towards the sweet and baked products. Suppose the majority of people have a sweet tooth in society. In that case, the sales of Dunkin' Donuts will be high in that society. Therefore, operating in such societies can be highly effective for the brand.
Moreover, other social factors, such as the age of the people in society, really matters for Dunkin' Donuts. Therefore, the brand will look forward to operating in a society where most people are young.
A high percentage of the young population will favor the brand since old people avoid sweet products due to medical reasons.
Other than that, education really impacts the operations of Dunkin' Donuts. You must be thinking about what education has to do with Dunkin' Donuts. Well, if the brand operates in a society with a high literacy rate, the workforce of Dunkin' Donuts will be educated and skilled.
This will increase the productivity and efficiency of Dunkin Donuts and help the brand to increase its revenue.
Technological Factors
Businesses are highly impacted by technological factors. The role of technology has been observed and acknowledged by businesses all over the globe. Dunkin' Donuts is one of the brands that has made the most out of technology.
The technological developments in terms of social media have really benefited Dunkin' Donuts. The brand has used various social media platforms to market its products. This marketing strategy has helped Dunkin' Donuts significantly to grow in recent times.
Besides that, other technological developments in the food and beverages industry impact the brand significantly. Adopting the latest techniques developed can help Dunkin' Donuts be more productive. This will help the brand in generating higher revenue and maximize more profit.
Besides that, the increasing technology has previously helped Dunkin' Donuts produce sugar-free products. This has increased the revenue of Dunkin' Donuts significantly since offering sugar-free donuts has made those people buy donuts who once used to avoid them.
In addition to that, online deliveries have really helped the brand increase its sales. This has increased the reach of Dunkin' Donuts and helped the brand increase its revenue.
Legal Factors
Businesses have to abide by the laws present in the society where it is operating. Similarly, Dunkin' Donuts also has to keep a close eye on the laws since legal factors play a significant role in determining the operations of Dunkin' Donuts.
Dunkin' Donuts has to abide by several laws present in society. For example, it has to be careful while dealing with its employees since violating workers' rights can result in lawsuits and heavy fines.
Dunkin' Donuts must remember that in some societies, labor unions and labor rights are very strict, and the brand can even face bans if it violates these laws.
Moreover, other legal factors, such as customer laws, impact Dunkin' Donuts. The brand has to abide by customer laws to ensure the smoothness of its operations. Dunkin' Donuts has to take care of its customers, or it can face lawsuits similar to a recent lawsuit filed by a customer against Dunkin' Donuts recently.
The brand must be cautious and abide by the laws strictly, or it can end up paying heavy fines due to the lawsuits.
Environmental Factors
Environmental factors significantly affect the operations of any business. For example, Dunkin' Donuts is one of the brands that is significantly impacted by environmental factors such as climate change, recycling, waste management, etc.
Climate change has increased the frequency of natural disasters in recent years significantly. In case of natural disasters, traffic disruption can occur. This can lead to disruption in the supply chain of Dunkin' Donuts and result in operational problems.
Moreover, recently governments have started to take action to ensure that businesses recycle their waste and use materials that can be recycled. However, this will increase the operational cost of Dunkin' Donuts since shifting to materials other than plastic will be more costly.
Moreover, installing machinery that recycles the waste can be very costly for Dunkin' Donuts and result in low profits.
Besides that, many groups are pressuring businesses to focus on waste management. This has made Dunkin' Donuts focus on waste management because the brand knows it will lose customers if it doesn't.
Dunkin' Donuts PESTLE Analysis: Final Word
Dunkin' Donuts is the largest Donut brand in the world since it has more than 11 thousand outlets worldwide. However, the brand had humble beginnings. Initially, Dunkin' Donuts started its operations from a single shop and then expanded its operation across the globe.
In this article, we looked at how Dunkin' Donuts carried out its operations over the years and the current operations of the brand. After that, we discussed PESTLE analysis and then carried out Dunkin' Donuts PESTLE analysis.
The Dunkin' Donuts PESTLE analysis helped us analyze what external factors impact the operation of Dunkin' Donuts.
We hope you would have enjoyed reading this article since it gave you insight into your favorite brand and made you aware of the PESTLE analysis framework. Besides the PESTLE analysis, look at Dunkin' Donuts SWOT analysis to see what internal and external factors impact the Donut brand. If you want to learn more about PESTLE analysis, look at some of its examples to know how to conduct one.
