Dunkin Donuts SWOT 2024 | SWOT Analysis of Dunkin Donuts

Company: Dunkin’ Brands
CEO: David Hoffmann
Founder: William Rosenberg
Year founded: 1950
Headquarters: Canton, Massachusetts, United States
Employees (Dec 2019): 1,109
Ticker Symbol: DNKN
Type: Public
Annual Revenue (FY2019): US$1.37 Billion
Profit | Net income (FY2019): US$487.8 Million

Fun Fact: Did you know that Dunkin sells 30 cups of coffee every second on average, which amounts to 1.7 billion cups of hot and iced coffee globally every year?

Dunkin’ Donuts was founded on the idea that success comes to those who focus on doing what they do perfectly. With a simple coffee and baking recipe, the fast-food chain grew to become not only a household name but also the fastest growing in the U.S with 13,000 stores spread across the world.

We can all learn something by undertaking Dunkin’ Donuts SWOT Analysis.

Table of Contents

Strengths of Dunkin Donuts

Global Operations: Tapping into a large market offers more customers, which increases sales and profits. By 2002, Dunkin’ had 5,000 food joints in 38 countries, which has increased over the past two decades to 13,000 restaurants in 46 countries. It has evolved into the largest coffee-and-baked-goods chain in the world.
Perfect Positioning: Dunkin’ is synonymous with breakfast nearly everywhere. This is attributed to its perfect positioning as the to-go for breakfast. By focusing on a small niche, the fast-food chain has set itself apart from the competition.
Superb Franchise Strategy: The robustness of business models is put to the test in times of crisis. Dunkin’s franchise strategy cushioned the impact of the pandemic and enabled the company to emerge on the other side better off than competitors.
Community-Centric Strategies: Adopting strategies that seek to help the community will never go unrewarded. Dunkin’ recently announced it will be hiring 25,000 new employees as part of its commitment to keep America running and working.
Strategic Branding: With 70 years in the industry, Dunkin’ has always stayed relevant to consumers regardless of the generation. From marketing to dropping ‘Donuts’ from its name and menu changes, the company employs strategic measures to ensure it remains relevant to the target audience.
Great Supply Chain Management: Dunkin’ effectively manages its supply chain to ensure timely delivery of freshly baked products and ground coffee to the customer’s preferred outlet. It recently joined the Sustainable Coffee Challenge to increase the supplies of quality coffee.
Eco-friendly Policies: In the current society threatened by climate change, companies that adopt eco-friendly policies are favored by consumers. Dunkin’ set a target to reduce its carbon footprint and successfully transitioned all its outlets from polystyrene cups to paper cups.

Weaknesses of Dunkin Donuts

Over-Reliance on US Market: In FY 2019, 46.7% of the company’s total revenues came from the Dunkin’ Donuts US segment. With nearly half of its revenue generated from the US, Dunkin’ will be severely impacted in the case of economic challenges in the market.
Slower Expansion: As competitors like McDonald and Burger King expand rapidly across the world, Dunkin’ adopted a limited expansion strategy. This snail-paced expansion is a weakness since Dunkin will always enter new and emerging markets after its competitors.
Poor Targeting outside the US: While Dunkin’s effective targeting has enabled a steady revenue growth in the US, the chain is struggling in India and other emerging and lucrative markets. This is attributed to poor understanding of non-Americans leading to poor strategies.
Lack of Variety: Dunkin’ relies primarily on coffee and bakery products, which limits the fast-food chain to a small segment in the food sector. Reducing or streamlining offerings to cater to a specific sector also limits the number of customers.
Low Financial Capabilities: To compete favorably for market share, companies require immense financial resources. Dunkin’s competitiveness has been undermined by financial constraints and was forced to scale back its expansion plans.

Opportunities for Dunkin Donuts

Offer Healthier Options: The revenues of Dunkin’s competitors like Burger King increased tremendously after they introduced healthier plant-based options in their menus. Dunkin’ can also exploit the increasing demand for healthy foods by offering healthier options.
Expand Market Presence: Dunkin’ can cater to more customers and increase its profits. Dunkin’ has to increase the number of stores and market presence to capture more customers.
Diversify Revenue Streams: Putting all its income generators and resources in one sector can be disastrous if the sector declines. Dunkin’ can diversify its revenue streams to include something like grocery selling healthy and fresh farm produce.
Strengthen Operations in Emerging Markets: Markets in emerging economies are unsaturated and offer a higher potential for growth. Dunkin’ can strengthen its operations in these markets to catalyze growth.
Offer More Variety: Since Dunkin’ lacks variety in its menu, it has the opportunity to cater to the needs of the entire food business market. The chain can include all types of meals on its menu for breakfast, lunch, and dinner. More variety, more customers.

Threats for Dunkin Donuts

Intense Competition: With strong competitors like McDonald’s, Burger King, KFC, Starbucks, Pizza Hut, and Domino’s, Dunkin’s market share, and profits are always under threat.
Inherent Issues in Franchising: Even though franchising is an internal matter, external forces play a role in the success of the franchising model. Other fast-food chains like Subway are struggling to effect new prices with opposition from franchise owners. Dunkin’ is also threatened by inherent issues in franchising.
Global Pandemic and Recession: The pandemic has devastated economies globally with many countries already sliding deeper into recession. The fast-food sector is not immune to the pandemic or recession, which means Dunkin’s operations and profits are under threat.
Increasing Health-Consciousness: The ever-increasing number of health-conscious consumers threatens fast-food chains including Dunkin’ Donuts. Since Dunkin’ offers unhealthy fast-foods, customers can migrate to competitors offering healthier options.
Stringent Regulations: The prevalence of cardiovascular diseases, hypertension, and obesity due to unhealthy junk and fast food can prompt governments to enact stringent regulations targeting fast-food joints like Dunkin’ Donuts.
Rising Costs: From rising prices of farm products due to climate change to the burdening costs of logistics, each additional dollar chips Dunkin’s profits.