Starbucks bottled coffee is everywhere. How about Dunkin'? The project introduces the comprehensive market research and the omni-channel marketing strategies for Dunkin'-to-go, a new and exciting ready-to-drink coffee product. The project was conducted in 2015, one year before Dunkin' Donut published their launch of the ready-to-go coffee product line.
Starbucks bottled coffee is everywhere. How about Dunkin'? The project introduces the comprehensive market research and the omni-channel marketing strategies for Dunkin'-to-go, a new and exciting ready-to-drink coffee product. The project was conducted in 2015, one year before Dunkin' Donut published their launch of the ready-to-go coffee product line.
Dunkin Donuts is an International Doughnut and Coffee Retailer Founded in 1950 in Quincy, Massachusetts by William Rosenberg.
This Presentation will tell us the journey From a Small Donuts Retailer in 1950 and How he Become the Global brand.
For More Details you can Contact me -
My LinkedIn Profile - https://www.linkedin.com/in/naman-makhija-621359167
Dunkin Donuts is an International Doughnut and Coffee Retailer Founded in 1950 in Quincy, Massachusetts by William Rosenberg.
This Presentation will tell us the journey From a Small Donuts Retailer in 1950 and How he Become the Global brand.
For More Details you can Contact me -
My LinkedIn Profile - https://www.linkedin.com/in/naman-makhija-621359167
This is a competitive matrix prepared for Starbucks Corporation. A case study under the doctorate program of PLM. The competitors analyzed were McDonald's and Dunkin Donuts
Krispy Kreme SPACE Matrix, BCG Matrix and Product Positioning Map by Jholina Gamboa & Kate Bernadette Madayag, University of the Philippines Strategic Management
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[Document title]ContentsCurrent State of Dunkin Donuts.docxdanielfoster65629
[Document title]
Contents
Current State of Dunkin Donuts 2
The same products, yet so much more 2
Introduction 2
Challenges 3
Strengths 3
Rising industry 4
Future of Dunkin’ Donuts 5
Tables 6
References 7
Current State of Dunkin Donuts
Dunkin Donuts is best known for its variety of delicious donuts and coffee, but over the years they expanded their product lines to include many different breakfast items and specialty coffee drinks. Over the past five years, the company developed a solid reputation for their coffee, and has managed to gain a loyal customer fan base. The company has been in operation since 1948, currently has approximately 6,500 outlets, and a goal to go to 15,000 outlets by the year 2020. The five main goals of Dunkin’ Donuts are as follows: (1) Grow relevant brands; (2) Expand globally; (3) Enhance the guest experience; (4) Continue their sustainability plan; and (5) Intensify domestic and international markets. The same products, yet so much more
Mission statement:“Dunkin’ Donuts will strive to be the dominant retailer of high quality donuts, bakery products and beverages in each metropolitan market in which we choose to compete “ (DD IP Holder LLC, 2015).
Krispy Kreme is a company in the industry that offers high quality doughnuts, and packaged sweets, among various kinds of beverages. Introduction
The restaurant services industry has high levels of complexity and stiff competition, therefore, a potential acquisition of Krispy Kreme by Dunkin Donuts is identified. These two companies have great levels of potential, but face stiff competition from the other leading competitors previously mentioned. It would cost both Dunkin Donuts and Krispy Kreme a lot to expand to the levels of some of the competitors. The acquisition will most likely improve the companies’ performance and reduce the competition, thereby giving the two companies an opportunity to achieve their organizational objectives. Challenges
There are some factors that could affect the growth and profitability for the restaurant services industry. The three most prominent risks are healthcare costs, mandatory wage hikes, and taxes. The new healthcare law, Affordable Care Act, has put significant pressure on the restaurant industry because a vast majority of the franchisees are small businesses. This is because these businesses tend to be labor intensive with a high number of young, part-time employees and are not typically associated with healthcare costs. However, the healthcare law will require these businesses to offer health care to employees which will drive up the healthcare costs. A second factor that affects the growth and profitability of the restaurant services industry is the mandatory wage hike. This recent federal proposal calls to raise the minimum wage from $7.25 to $10.10 over roughly two years. This is an increase in labor expenses of 40%, which will drive up operating expenses and will affect the ability of companies to have cash ava.
Dunkin Donuts
Arie McQuarley
CSU
Dunkin Donuts
Dunkin Donuts is an American multinational donut company, as well as a quick-service restaurant. The company was acquired in 1990 by Baskin-Robbins through Allied Domecq. Baskin earned Mister Donut chain, and the conversation to Dunkin Donuts enabled the growth of the Dunkin brand in America. In 2019, the Baskin-Robbins and Dunkin Donuts rebranded to a beverage-led company and are now known as Dunkin (Poole, 2017). Dunkin Donuts has close to 12,000 locations that are operational in36 countries. It offers the most significant baked and coffee products globally — the products of various cold and hot beverages, as well as donuts and other baked products.
Dunkin's mission, vision, and organizational culture suggests the company focuses on achieving their goals like becoming the top brand. As such, Dunkin dwells on the marketing segmentation and target approaches in the beverage and foodservice sector. For over 60 years, Dunkin has branded itself among Americans as well as achieving loyal clients globally due to the improved consumer services and irresistible products (Dunkin Donuts Case Study: Refocusing the Quick Serve Model Onto Coffee, 2008). Besides, by looking at the growth and expansion trends, it is evident the mission, vision, and structure are effective. Their vision, mission, and architecture that suggest serving responsibilities and their priorities, provide them with a roadmap as well as sustainability strategies to the future of their company.
Besides, Dunkin's mission, vision, and structure have essential elements that reflect their ambitions. The company is based on a supportive and collaborative environment that encourages feedbacks and accessibility to leadership by employees. Also, Dunkin focuses on improving the reach of their brand, but engaging franchisees and the team members effectively, as well as consumers (Poole, 2017). Dunkin's administration believes that with the diverse experiences and backgrounds, they are capable of driving their brand more effectively due to the enormous value of the teams. The mission, vision, and structure support the commitment of Dunkin to enhance the diversity of supplier base, franchisee, and employee by creating an inclusive environment for sustainability.
Currently, Dunkin's short term goals are value offers. The company is launching Dunkin Deals, which are set of offers that are availed to its operational restaurants every year. For instance, their deal in one of the years was Medium Iced or Hot Latte for $2 (Dunkin Donuts Case Study: Refocusing the Quick Serve Model Onto Coffee, 2008). The offer was from 2 pm to 6 pm. Such long-term goals by Dunkin offered each year, increases consumer retention.
On the other hand, their long-term goal is the introduction of new products. Dunkin Donuts uses innovative efforts to introduce new beverages and baked products. Remaining unique and creative in the market is essential. New brands of coffee, don ...
RUNNING HEAD Managing Growth Simulation .docxjoellemurphey
RUNNING HEAD: Managing Growth Simulation 1
Managing Growth Simulation 2
Managing Growth Simulation
FIN/571
Managing Growth Simulation
Introduction
The complete course has reveled us the great idea to influence our trends and intelligence while analyzing the entire details of Sunflower Nutraceuticals (SNC) company followed with all the decisions of the company which tends to increase their working capital and maximizing the overall organizational growth potentially with respect to time, as we have figured out the data and change in numbers below which reflects the growth annually. Moreover in addition to various details of the SNC firm we have also examined various decisions which took place in each of the phase of SNC’s simulation which has an estimated values to figure out the results, secondly the paper also describes how SNC’s decisions are influenced with respect to their working capital followed with the final step of evaluating the general affects associated with the limited access of financial mix.
Sunflower Nutraceuticals (SNC) Background
No wonder SNC is a privately owned Nutraceuticals company , more over one can say it is a wide distributor which provides all the vital dietary supplements such as herbs for women’s, vitamins, and minerals for all the consumers (mainly women’s), distributors and retailers. (Harvard Business School Publishing, 2012). Once the business was initiated after 2006, SNC expanded their operations and came up with various retail outlets in the nutraceutical industry and moreover has been successful while introducing their own brands of sports drinks, vitamins for teenagers, metabolism- boosting powders, etc and various other products from a same product line which enable to enhance the metabolism system of humans.
Although being potential to grow as one of the major nutraceutical distributors in the, they are still struggling to break even and one more than one occasion have been forced to exceed the company’s credit line ($1,00,000) to finance their payroll and other operational needs. Because of their somewhat restrictive financing options, they are only able to use a small percentage (approx. 10%) to evaluate and invest in new business expansion which resembles great opportunities in other retail markets across the globe.
Phase 1 of SNC’s Simulation (Years 2013-2015)
During the initial phase of the simulation, they presented four major opportunities which could be helpful for their company to maximize their growth, those opportunities includes-
I. Discontinuing their Poorer Selling Nutraceutical Products –since they have more than 100 products, some of those products can be dropped off SNC’s inventory because they are outdated. Reducing or discounting those items will allow SNC to a) reduce its DSI to approximately 3 months, b) cut it ...
3 | Page
Crystal Messer
FIN 317
Table of Contents
1. Brief 2
i. Location 2
ii. Type of customers 2
iii. Competitors 2
2. Why this type of business interests you? 2
3. Why do you believe it would be successful 3
Cafe Grill
Brief
This business is from the food and beverage industry. Café grill would be a fast-food restaurant chain like Mc Donald, Burger King, KFC, and other fast-food restaurants. And the type of business I am planning to start would be a partnership as it doesn’t require paying income taxes as each partner would have to pay tax based on personal income and it would have increased pool of knowledge, capital, and expertise.
Location
The location of the business Warner Robins, Georgia, USA. Since this would be the best location as would be the best fit because people would love to try something new when coming to Mc Donald’s and most of the restaurants and because the area of your food business will affect about as much as the menu. If your restaurant is at an inappropriate spot, you won’t attract customers you will require so as to remain in business.
Type of customers
The type of customers of café grill would be fast food lovers such as youngsters(these are the people who would love to spend most of their pocket money with friends ) , children( because they don’t prefer homemade food every time) and office going people( who don’t have time to make food would prefer to drive-thru).
Competitors
The main competitors of café grill would be Mc Donald’s, KFC, Burger King, Subway, Dunkin Donuts, Pizza hut, Wendy’s and Taco Bell as they all are direct competitors of café grill as because they have an almost similar target market and also selling nearly similar food.
Why this type of business interests you?
As an entrepreneur, I love to do creative and innovative things and I have an interest in cooking and trying new recipes so it is the passion and creativity that lures me to open a restaurant. Not only this but I am also a sociable person so restaurant business falls into the hospitability category business so I love to meet new people (greeting customers and solving their problems). In Addition to this, I possess strong stamina for working long hours and solving uncertain problems.
Why do you believe it would be successful?
The reason behind taking restaurant business is that eatery business is one of the most beneficial business in view of its developing demand as nowadays people want to dine out more in comparison to cooking meal at home and as per market research more than twice a week people like to dine ...
RATIO ANALYSIS MEMORatio Analysis Memo – ACC291Univer.docxmakdul
RATIO ANALYSIS MEMO
Ratio Analysis Memo –
ACC/291
University of Phoenix
To: Ms. Kathy Kudler, CEO
From: Accounting
Re: Company Ration Analysis
Kudler Fine Foods accounting department has completed a full analysis on the 2003 financial statistics. Different tools of analysis are used to help complete the analysis measurement. Below you will find exact calculations on liquidity ratios, profitability ratios, and solvency ratios. Financials from 2003 have helped us get an overall view of the company’s well being and with further years to come we will be better able to estimate a yearly return.
To measure the company’s short-term ability to pay its maturing obligations and to meet unexpected needs for cash, or liquidity ratio, several ratios are used. First is the current ratio rate. This measures the company’s liquidity and short-term debt-paying ability. Kudler’s current ratio is 16.95:1. This means the company has $16.95 of current asset for every dollar of current liability. This is great in comparison to the average industry’s ratio, which is 1:06:1. Kudler’s acid-test ratio, which measure immediate liquidity, is 13:04:1. The average industry’s is 0.29:1. The receivable turn-over rate is 125.54. In other words, Kudler Fine Foods collects 125 receivables during its given period. This rate is over four times the industry average of 28.2. After measuring the inventory turnover, Kudler Fine foods inventory is sold 18.9 times during its accounting period. With the average industry rate being 7.0, its obvious to see the company is doing well.
Profitability ratios measure the income or operating success of a company for a
given period of time. To help determine profitability ratios, Kudler’s accounting department measured the company’s assets turnovers, profit margins, return on assets, and return on common Stockholder’s Equity. To begin, all ratio rates in their given field are higher than the industry’s average ratio rate. The asset turnover shows Kudler generate $4.04 of sales for each dollar the company invested in assets. The percentage of each dollar of sales that resulted in net income, or profit margin amount, is 6.7%. A return of asset rate of 25.3% shows the overall measure of profitability. This was determined by measured dividing net income by average assets. This rate is more than three times the industry’s average rate. The return on common Stockholder’s Equity has a high rate of 0.90%. This means the company earns $90 for each dollar invested by the owner.
Solvency ratios, which measure the ability of a company to survive over a long period of time, that were used are debt to assets ratios and times interest earned rations. The debt to assets ratios shows the Kudler’s creditors contribute 28% of total assets to the company. This low rate shows Kudler Fine Food contributes much of its success to the business assets. The times interest earned ratio, which measure the company’s ability to meet interest payments as t ...
1. FINANCIAL ANALYSIS
Revenue
Dunkin’ Brands business model is almost entirely dependent on franchisees to generate
revenue. In international markets, its Baskin Robbins brand, is supply chain dependent on
Dunkin’ Brands and revenue is generated from sales to franchisees. There is also retail revenue
from company owned stores and licensing. Packaged coffee sold in super markets and retail
locations is the largest piece of Dunkin’ Brands’ licensing revenue, about 2.7%. Through the
first three quarters of 2014, there has been about $7.2 billion in sales at franchisee locations.
Company owned stores have generated $16 million in sales. The effective royalty rate of
Dunkin’ Donut stores in the US has been 5.4% and 5% of Baskin Robbins sales. Dunkin’
Brands collects weekly royalties from its franchisees. Through the first nine months of 2014, the
royalty payments have generated $355 million in revenue. Coffee and other beverages make up
57% of franchisee sales (Dunkin’ Brands, 2014).
This emphasis on the franchise model allows Dunkin’ Brands to obtain large margins.
Gross profit margin is 78.28% while the net profit margin is 24.19%. There are less than 1,000
corporate employees. The marketing budget of Dunkin’ Brands is funded (about 5% of gross
sales) by franchisees, with less than 20% of that fund going to pay administrative expenses
(Dunkin’ Brands, 2014).
Dunkin’ Brands also has, especially in the United States segment, little to no involvement
in the supply chain. Dunkin’ Brands licenses the Baskin Robbins brand to Dean Foods to
produce the ice cream needed by its stores. Dunkin’ Brands makes a 1% royalty on every gallon
of ice cream that its franchisees buy from Dean Foods.
2. QSR (quick service restaurants) accounted for $233.6 billion in sales in the US during
2013 (Fast Food Restaurants Industry, 2014). Dunkin’ US franchisees generated about $9 billion
in sales in 2013, earning a market share of 3.9% (Packaged Facts, 2014).
Debt service is $51 million against $555 million in revenue, making 9.1% of revenue is
marked for debt service. The outstanding long-term debt of Dunkin’ Brands is over $2 billion.
Segments
Dunkin’ Brands business segments are divided across brands and domestic and
international markets. The four segments are Dunkin’ Donuts US, Baskin Robbins US, Dunkin’
Donuts International and Baskin Robbins International.
Dunkin’ Donuts US had growth of 7.4% in revenues in 2013 over 2012 numbers. This
growth is mainly driven by franchisees opening restaurants and expanding the footprint of
Dunkin’. As Dunkin’ Brands has no control over revenues except those generated by
franchisees, the expansion of stores is the only way that Dunkin’ Brands can show growth
without raising franchise royalties. Of the $35 million in revenue growth, 23% ($6.7 million) is
from franchisee fees. That is not repeatable or controllable without franchisees renewing and
expanding their footprint. Guidance from management during the last earnings call lowered
estimates of same store sales growth to 2% (Dunkin’ Brands, 2014).
Dunkin’ Donuts International reported a loss of $2.1 million in 2013 from 2012. That is
a decrease year over year of 22.7%. Part of the loss was a write down from a Spanish joint
venture. Dunkin’ Donuts International is moving from development agreements with other
entities in international markets to a franchisee model world-wide. Dunkin’ has also invested in
the infrastructure to grow the International business, further reducing segment revenues for 2013.
3. Financial Ratio Analysis
Examining the ratios that describe return on investment, it demonstrates the almost 100%
franchisee model and reliance on debt does not equate Dunkin’ Brands with other restaurants in
the QSR market. (See Exhibit 1)
An analysis of the ratios that measure the ability to pay off debt, Dunkin’ Brands lags
behind its peers. The long term debt ratio for McDonalds is between .5 and .57, while Dunkin’
.87-.89. Panera Bread and Starbucks are at .35-.40 and .37-.61 respectively. The discrepancy
can be explained by the business model. McDonald’s has a franchise business model, but there
are corporate owned stores and revenue generated by the supply chain that Dunkin’ Brands does
not have. Panera Bread and Starbucks is also reliant on a more 50-50 mix of debt and equity.
Dunkin’s aggressive buy back and long term debt reflect a different capital structure then seen in
the QSR industry.
Break Even Analysis
Since Dunkin’ Brands depends almost entirely on franchisee royalties to generate
revenue, the corporate break-even point will be low relative to the competition. The costs that
need to be covered would be SG&A and interest expenses. There is little to no property or
physical plant that requires continuing investing or maintenance.
On the store level, most stores are operated by franchisees that have more than one unit.
This would lower the initial costs and the knowledge already possessed by the franchisee would
allow an earlier break even. A brand new franchise, similar to the recent expansion into
California, would have an initial franchisee fee of $65,000. There is a marketing start-up fee of
$7,500. Dunkin’ Brands handles the marketing and it is paid for by the franchisees. There is a
variable cost of 5% of gross revenue that is paid for marketing services by every franchisee.
4. The fixed costs required vary depending on geographic area and local economics.
Dunkin’ Brands requires its franchisees to have insurance and indemnification up to $15,000.
Building costs average $625,000 for the store build out. In regards to the rent, an average 1,900
square foot space with a California average of $22 per square foot makes a rent cost of $418,000
for a year. Other costs include $20,000 for the retail information system and cash register.
Opening inventory is about $15,000. Uniforms for the staff is $800 and the various license and
permits needed for the build out and to operate a business in the locality averages $3,500.
Dunkin’ Brands suggests there might be up to $30,000 in miscellaneous costs. For a sample
store in California, there would be a total fixed cost of $1,199,800 for the store opening.
In regards to variable costs, in addition to the marketing fee, there is a royalty fee. The
new royalty fee for Dunkin’ stores is 5.9% of gross sales. Gross sales is everything that is sold at
the store, including merchandise. Labor costs were approximately 30% on average. Food costs
can be up to 20%. Variable costs take up 61% of revenue, leaving a contribution margin of 39
cents per dollar of revenue.
Breakeven revenue for a first year store would be $3.076 million (See Exhibit 2).
Stock Information
As of the market close on October 24th, 2014, the 200 day moving average stock price of
Dunkin’ Brands $45.04. Dunkin’ Brands does pay a dividend that was recently raised to 23
cents a share, giving a dividend yield of 2%. That yield is currently better than the 5 year
treasury. The consistency of the yield and the revenue stream of franchisee royalties put the
stock into a stable investment. The average volume over the last 3 months is 1.2 million shares.
There are 104.84 million shares outstanding, giving Dunkin’ Brands a $4.7 billion market
cap. Starbucks, another organization in the quick service restaurant market, has a market cap of
5. $56.95 billion. Panera Bread Company has a market cap of $4.56 billion. McDonald’s, $90.01
billion and Burger King, $11.14 billion. The available float is 104.44 million shares. Less than
5% of the shares of Dunkin’ are currently being shorted and there are no major block holders and
there is less than 1% of shares being held insiders. The 52 week range for the stock price is
$40.50 – $53.05 (Yahoo Finance, 2014).
The Dunkin’ Brands board of directors authorized in February 2014 another $125 million
to repurchase shares, either on the open market or through private channels. This authorization
expires in 2016. This aggressive approach to share repurchasing accomplishes two things: return
value to shareholders and allows Dunkin’ to increase returns on equity because it is retiring that
equity. In the 3rd quarter of 2014, 1.125 million shares of stock were purchased by Dunkin’.
This strategy allows the EPS to be increased without an actual change in earnings. At an average
stock price of $45, Dunkin’ has only used $51 million of the authorization.
Summary
Dunkin’ Brands has similar financials to competitors, but relies on the franchisee model
to generate almost all of its revenue. There are no inherent factors in the business model or
leverage that can be used to accelerate growth. The dedication to an almost 100% franchise
model forces Dunkin’ to open up territories for new or existing franchisees to build more stores
in order to show growth. Dunkin’ also does not have enough cash on hand to acquire businesses
or consolidate in the competitive quick service restaurant industry. The relatively large debt
burden puts Dunkin’ in a dangerous position if it cannot increase the franchise base and increase
royalties.
6. APPENDIX A
Exhibit 1.
**Dunkin’ Brands had an IPO offering in 2011. This greatly increased the amount of equity at
the start of 2012, lowering the return on equity. Source: Annual Reports
Exhibit 2.
Exhibit 3.
McDonalds 2012 McDonalds 2013 Panera Bread 2012 Panera Bread 2013 Starbucks 2012 Starbucks 2013 Dunkin' 2012 Dunkin' 2013
Return on Equity 0.3798 0.3652 0.2648 0.2387 0.3154 0.3353 0.1452 0.4238
Return on Assets 0.2363 0.2325 0.2085 0.2563 0.2279 0.2249 0.0511 0.0607
Return on Capital 0.2984 0.2895 0.3209 0.3028 0.3794 0.4042 0.0640 0.0906
Long Term Debt Ratio 0.4865 0.4802 0.2048 0.1777 0.1113 0.2028 0.7097 0.8399
Total Debt Ratio 0.5678 0.5629 0.3519 0.4073 0.3777 0.6108 0.8912 0.8725
Current Ratio 1.4464 1.5934 3.2829 2.7618 1.9004 1.0175 1.1881 1.3412
Cash Ratio 0.4041 0.4163 1.0706 0.4129 0.5379 0.4790 0.3821 0.4044
Fixed Starting Expenses Cost Variable Operating Costs Cost
Initial Franchisee Fee $65,000 Ongoing marketing costs 5%
Marketing Start up Fee $7,500 Continuing franchisee fee Royalty 5.90%
Idemification/Insurance $15,000 Labor Costs 30%
Building costs $200,000 Food Costs 20%
Other development costs $50,000 Sum 61%
Equipment, fixtures, signs $375,000
Retail Information System $20,000 Source: Franchisee Disclosure Document
Opening Inventory $15,000
Misc Opening Costs $30,000
Licenses, Permits, etc $3,500
Uniforms $800
1 Year rent - 19,000 sq ft, $22 $418,000
Sum $1,199,800
Restaurant Type Initial Finance Fee
Dunkin' Donuts Branded $40,000 - $90,000
Baskin Robbins Branded $25,000
DD/Baskin Robbins Multibranded $50,000 - $100,000
Source: Dunkin' Brands 2013 Annual Report