Dunkin Donut Case Study


1. DISCUSSION—What does a Porter’s Five Forces analysis reveal about the industry in which Dunkin’ Donuts and Starbuck’s compete, and what are its strategic implications for Dunkin’ Donuts?

Porter's Five Forces analysis reveals that both Dunkin' Donuts and Starbucks are operating under   hypercompetition conditions and face many challenges to their strategic competiveness. The constant threat of new entrants, too many competitors, and the inability to control the low barriers to entry, high power of suppliers or high power of customers make the fast food industry, or in Dunkin Donuts and Starbucks case, specialty coffee cafes an unattractive industry.

However, Dunkin Donuts has a niche market by being an alternative to offering good customer service, quality coffee, and donuts at lower prices than Starbucks. Starbucks, on the other hand also offers good customer service, yet their offering are much more higher priced. However, Starbucks provides their customers a cozy seating atmosphere, exotic coffee and tea, and free Wi-Fi that they are known for. Coffee retailers have faced increased competition with fast food vendors like McDonald's, Cosi, Tim Horton’s, and Panera's entering the marketplace with specialty coffee selections along with their core product offering.  

Dunkin' Donuts has positioned itself as a more economical yet quality coffee choice for consumers as opposed to Starbucks higher priced offerings. They have added breakfast sandwiches, and other food offerings in order to remain competitive, and have low power buying for the customer because they maintain a trademark on items exclusive to DD.  

The strategic implications for Dunkin Donuts are they would need to do a SWOT analysis to determine, what are their strengths and weaknesses since they are in such a competitive market. How can they create new opportunities that can make them stand out from the others, or make them a preferred choice for consumers? What are...