Does your morning start with a hot cup of coffee and a donut? If yes, you must be one of many who are crazy about Dunkin’ Donuts.
Of course, we all know how famous Dunkin’ Donuts is across the globe, but what makes Dunkin’ Donuts different from other coffee shops? Is it the flavored coffees, delicious pastries, or juicy sandwiches?
Dunkin’ Donuts is considered one of the largest coffee and baked goods chains, with over 11,300 restaurants in 36 countries. It has a near-perfect business combination of private label, quick service restaurant, and locally branded.
If there’s a fan-favorite chain in America, it’s Dunkin’ Donuts. Alone in the USA, Dunkin’ Donuts has opened over 8500 restaurants.
In 2019, Dunkin’ Donuts’ total revenue generated alone from the U.S. was $643.9 million. This company has big ambitions to expand and increase its market share globally.
Looking at the success of Dunkin’ Donuts, we decided to conduct a Dunkin’ Donuts SWOT analysis. This article will discuss the strengths, weaknesses, opportunities, and threats faced by Dunkin’ Donuts in detail. Make sure you check out which external factors affect the brand in our PESTLE analysis of Dunkin’ Donuts.
Dunkin’ Donuts has achieved enormous growth over the years, but looking at their success, a question arises: how did a donut and coffee shop become a worldwide brand?
You have to go back to 1946 when Bill Rosenberg started selling donuts and coffee to understand this phenomenon. Later, in 1950 he opened a shop where he began selling coffee and donuts. Soon this shop gained popularity, and Bill named his shop Dunkin’ Donuts.
Dunkin’ Donuts is often known for its coffees and donuts only, but in reality, it has a diverse menu. They offer a wide range of products, from hot drinks, cold drinks, and donuts to muffins, bagels, and sandwiches.
Although Dunkin’ Donuts has a diverse menu, if you ask someone, they’ll be like, “Dunkin’ Donuts is known for its large variety of donuts and coffees.”
This is true since it offers 22 different types of donuts and a wide variety of coffees, including Latte, Espresso, Cappuccino, etc. In addition, besides hot drinks, Dunkin’ Donuts also has cold beverages such as cold coffees, frozen drinks, iced teas, etc.
Since you have reached this far reading this article, I’m sure that now you know how big of a brand Dunkin’ Donuts is and what significance it holds in the market.
Before we proceed further, let me give you an overview of what SWOT analysis is actually. You might be wondering what a SWOT analysis is? Well, you don’t have to worry at all. We will explain it to you in the simplest way possible.
SWOT may seem like a meaningless word formed by joining four letters; that’s not entirely wrong. The word SWOT is an acronym In which the letter S represents strengths, W is for weaknesses, O accounts for opportunities, and T stands for threats.
A SWOT template comprises both internal and external factors. The strengths and weaknesses represent internal factors, while opportunities and threats account for external factors. This technique can help you evaluate your business, products, and market.
To better understand what SWOT analysis is, you can have a look at some of the SWOT analysis examples.
Strengths That Helped Dunkin’ Donuts Grow
Strengths in SWOT analysis tend to be the reasons that help an organization grow. Strengths, after all, are pretty straightforward as they are things that an organization Is good at.
Dunkin’ Donuts is on a mission to fuel the world’s coffee and donuts cravers. Dunkin’ Donuts is one of the world’s most recognized coffee brands, serving quality coffee and delicious baked goods in 36 countries.
Its increasing global presence is a sign of increasing demand for Dunkin’ Donuts products.
Good Quality of Products
Dunkin’ has shown itself to be a company that can deliver. Dunkin’ Donuts’ delicious products are created with the same passion and care. Dunkin’ Donuts decided to have centralized manufacturing locations (CMLs) to ensure consistent product quality.
By doing so, freshly baked donuts and other bakery goods are delivered from centralized manufacturing locations every day, so you get the same delicious taste and quality you expect from Dunkin’ Donuts, no matter where you are.
Community Support Practices
Donuts, coffee, bagels – we all have a favorite. But our shared favorite is helping people in need and supporting good causes. So other than selling donuts and coffee, Dunkin’ Donuts is involved in taking beneficial initiatives for the community.
Dunkin’ Donuts has served the community in different ways: helping unemployed people, feeding families during COVID-19, getting cancer patients treated, etc. This not only helped Dunkin’ Donuts earn a good name but also increased the brand’s customer base.
Targeting The Market Gap
When you think of going out for breakfast, which place comes to your mind? Correct! It’s Dunkin’ Donuts. For the last 70 years, Dunkin’ Donuts has been offering perfect breakfasts to its customers.
By focusing on this niche market, Dunkin’ Donuts has earned the reputation of serving one of the best breakfasts worldwide.
Weaknesses of Dunkin’ Donuts
If a SWOT analysis only identified strengths, it would not be of much use. However, where it mentions strengths, it also sheds light on the weaknesses of an organization.
This section will highlight some of the weaknesses that hold back Dunkin’ Donuts from dominating the market.
Overly Relying on The US Market
Remember? Dunkin’ Donuts once launched an advertisement campaign with the tagline “America runs on Dunkin'”. Well, it is actually true.
Dunkin’ Donuts America has found the key to America’s morning. In the U.S., Dunkin’ Donuts is a brand that thrives within the confines of convenience stores and gas stations.
Almost everywhere in the U.S., you can easily find Dunkin’ Donuts. Sales of Dunkin’ Donuts within the U.S. contribute a lot to Dunkin’ Donuts’ total revenue. In fact, in 2019, 46.7% of their total revenue came from the Dunkin’ Donuts U.S. segment.
Since almost half of the revenue of Dunkin’ Donuts is generated within the U.S., a recession in the U.S. economy can have adverse effects on Dunkin’ Donuts.
Slow International Expansion
International expansion is the aim of any brand as it brings a lot of recognition and multiplied profits to the brand. Like other brands, Dunkin’ Donuts also stepped out from its land of origin to spread its roots internationally.
Still, Dunkin’ Donuts couldn’t spread rapidly in other countries for some odd reason. Although Dunkin’ Donuts managed to open its branches in 36 countries, that’s not enough. On the other hand, its competitor, Starbucks, is present in more than 80 countries.
One of the most dangerous things for any business is getting involved in controversies. Controversies damage a company’s reputation and can also hurt a business financially.
Dunkin’ Donuts has been at the center of some controversial matters. The company has been criticized in the past for having discriminatory behavior based on color and ethnicity. Earlier, some franchisees of Dunkin’ Donuts were also fined for child labor violations.
Too Much Sugar
Let’s face it, donuts are delicious, but they contain a lot of Sugar. Back In 1950, when it all started, people weren’t much aware of all the calories, and the potential diseases sugar will bring.
But In the current era, medical research has unleashed that high sugar intake not only causes obesity it also increases the chances of having heart disease.
Since Dunkin’ Donuts primarily focus on making donuts and other sweet bakery items, It is not considered a place with a healthy menu.
Opportunities are the chances through which an organization can expand. Noting down the chances is a way to identify possible opportunities that an organization may be able to take advantage of.
Many opportunities lie ahead of Dunkin’ Donuts through which it can maximize its market share and become the market leader.
Dunkin’ Donuts’ menu desperately needs a healthy option. Instead, Dunkin’ Donuts offers notoriously low-quality food such as Donuts and Apple Fritter, usually well over 400 calories.
Dunkin’ Donuts has the opportunity to team up with some dieticians and make their menus healthier by adding fruit and vegetables to their breakfast options, introducing sugar-free products, and changing their sides from bagels to apples.
As a result, Dunkin’ Donuts will attract more customers and retain current ones who are not looking for pure junk food by improving their menus.
Increase Market Share
Dunkin Donuts could increase its market share to increase its revenue. Moreover, this is the right time since earnings increase and consumers are more willing to try new products.
Dunkin Donuts has a lot of opportunities open for it to expand its market shares. However, since Dunkin’ Donuts is already a very famous brand, it just needs some strategic and tactical changes in its policies to get its expansion going.
A quick glimpse at the coffee and donut market shows that coffee shops such as Starbucks and Second Cup are continually expanding their menu. As a result, consumers pay a premium for a quality product.
Dunkin’ Donuts currently only offers limited choices; however, if they were to expand their menu to include salads and meals for lunch and dinner, this would likely increase the overall consumption of their products.
Diversification of Revenue Streams
The quintessential American brand, Dunkin’ Donut, could use its brand popularity to move into the juice market or diversify by becoming a cereal manufacturer.
By doing so, Dunkin’ Donuts can widen its revenue channel. A diversification strategy will decrease the reliance on the current business and make the existing business more profitable.
Threats Faced by Dunkin’ Donuts
This is the last section of the SWOT analysis. This section includes the threats that Dunkin’ Donuts will face externally. Threats are the things that could harm your business. In the Dunkin’ Donuts case, we will discuss the factors which could harm Dunkin’ Donuts.
The fried dough business is not all wavy cobs and sprinkles but rather a tough battle between donut and coffee chains like Dunkin’ Donuts and Starbucks.
Although Dunkin’ Donuts has a great breakfast menu and excellent coffee, it has a steep hill to climb if it wants to be the industry’s new leader.
Dunkin’ Donuts also observed severe economic losses like any other business during the pandemic.
In 2020, due to the financial losses incurred to the company and the decline in sales, Dunkin’ Donuts closed 800 stores in the U.S. This resulted in a decrease in the revenue of Dunkin’ Donuts.
Dunkin Donuts offers unhealthy and junk food products to its consumers. Dunkin’ Donuts will face some significant challenges in the coming years. With a growing number of people conscious of their health, it will be hard for Dunkin’ Donuts to get them into its cafes.
The fact that most of the products sold by Dunkin’ Donuts are deep-fried and served with sugar will eventually make people stay away from them.
Dunkin’ Donuts SWOT Analysis: Final Thoughts
This article tried to provide you with some insight into one of the world’s leading coffee and baked goods chains. Using SWOT Matrix, strengths, weaknesses, opportunities, and threats faced by Dunkin’ Donuts were highlighted.
Dunkin’ Donuts has strengths, weaknesses, opportunities, and threats like any other business. To maximize its profits and dominate the market, Dunkin’ Donuts has to capitalize on Its strengths and overcome its weaknesses. Moreover, it also has to avail of the upcoming opportunities and plan to counter threats.
At the end of this article, I hope you have a clear picture of how important the role both internal and external factors play in the growth of Dunkin’ Donuts.
Other than that, after reading this article, I’m sure you know what SWOT analysis is, and you are well aware of how to conduct a SWOT analysis.