Introduction
The company against which the comparisons will be done is Dunkin' Donuts. The company specializes in the provision of doughnuts and beverages. Their client base mostly comprises of average income households. The company has established itself as one of the most formidable forces in the restaurant business. However, this does not undermine the fact that the company still has a lot to learn from other players in the industry. The essay shall examine five strategic issues in a number of companies. These outcomes shall then be related to Dunkin Donuts. (Michael, 2006)
Product development at Mc Donald's
McDonalds entered the food industry as a lunch time provider. It became famous for its fries, burgers and other lunch time items. However, the company started facing stiff competition from other fast food players such as Burger King. The company needed to improve its product offering in order to boost their position in the market place. Additionally, the company realized that other competitors decided to widen their product base. For instance, Burger King opted to introduce a breakfast menu to tap these growing numbers of consumers. Statistics indicated that breakfast consumers were growing at a rate as fast as nine percent annually. McDonalds was under pressure to meet this high demand.
In response to this, the company decided to introduce a breakfast menu. Additionally, they decided to counter some of their rival's product offering. For instance, McDonalds opted to introduce the egg Muffin. Their rival Burger King offered a similar product that had a ham omelet. By making this bold move, McDonalds was able to secure its forty percent share in the market under the breakfast category. This occurred despite the fact that other companies such as Taco Bell and Wendy's had expanded their breakfast portfolio. Mc Donald's also managed to penetrate into the breakfast industry despite the fact that there were other companies well associated with beverages rather than with foods. Such companies include Starbucks and Dunkin Donuts.
Dunkin Donuts can learn a lot from McDonalds in terms of their product development strategies. McDonalds was not afraid of venturing into unconventional areas, therefore Dunkin Donuts should also be bold enough; it should start providing food rather than beverages or doughnuts alone. Before considering such a move, Dunkin Donuts needs to ape McDonald's strategies. McDonalds realized that it would not be easy to accommodate breakfast consumers. This was why the company critically analyzed all the intricate issues that would come up in the process. For instance, they prepared for the need for speed in the morning. Most breakfast consumers may not have time to make left turns, therefore McDonalds built its restaurants with geography in mind. Additionally, these very customers would prefer restaurants in convenient locations, therefore Mc Donald's chose the most appropriate locations for these new restaurants as not all outlet locations would be appropriate. Additionally, they prepared their staff for this new challenge by giving them rigorous training programs. The company also incorporated some technological changes in its restaurants to accommodate the new product portfolio. It did this by introducing grill systems in a variety of its chains in order to facilitate the breakfast menu all through the day. In the past, the company used to stop working on breakfast items to make way for lunch items. All these key strategic steps can serve as lessons to Dunkin Donuts. The company should venture into different menu items but this should be done in a similar manner to Mc Donald's approach. (Moore, 2005)
Innovation at Starbuck's
Starbucks takes pride in the fact that they offer more than just coffee; theirs is an experience. This was not something that the company achieved overnight. It took strategic thinking to successfully effect this plan. The company was facing a serious challenge; making clients interesting in taking coffee at their restaurants.
Some of the strategic solutions that the company took up include training their staff to come up with the most appropriate restaurant designs. These individuals are responsible for ensuring that the interior designs in the company are up to par. This is probably why a large number of individuals have copied Starbucks. Besides this, the company located its restaurants in strategic sites such as near grocery stores, busy streets and near malls. Additionally, the company concentrated most of its restaurants in areas where they received the highest mail orders. Consequently, they made sure that all their new restaurants would have ready audience.
Dunkin Donuts should consider such strategic options. In order to convince potential clients that the company's products are worthwhile, clients need to access those products first. Therefore, Dunkin Donuts should open new restaurants in ready markets. They should also dedicate some time and resources towards restaurant furnishing and improvement. This will go a long way in attracting and securing specific markets for the company. (Chokeman, and Don, 2005)
Conglomerate diversification at Mc Donald's
Mc Donald's are one of Dunkin Donuts fiercest rivals. The company has established a name for itself throughout the world. It was faced with the challenge of expanding business in order to increase growth levels.
Conglomerate diversification at Mc Donald's can be seen through five angles
The advantage of the product in international markets Compatibility of the product in international markets Complexity of the product in international markets Divisibility of the product Communicability
Mc Donald's has ensured that their products relate to specific foreign markets by changing the nature of product served. In simple markets such as those in the Middle East region, the company offers products in smaller packages (to make them affordable), makes packaging more simple so that it can communicate to local clients more clearly and has ensured that their products stand out from the rest by offering unique features. Dunkin Donuts should adopt such a strategy in foreign markets. There is a need to tailor products to suit the nature of the market under consideration.
Vertical integration at Starbucks
Starbucks has ensured that they are market leaders in the food industries through their vertical integration strategies. The company felt the need to adopt vertical integration strategies after facing the pressure to improve the quality of their product. The company specializes in coffee; this means that in order to attract or retain clients the company had to offer a product that stood out among the rest. Coffee is a particularly sensitive product because even its taste depends on the quality of the raw material. There was a need for Starbucks to secure the quality of their coffee by adopting vertical integration. (Bridge, 2008)
The company set up three roasting plants in the country. One was located in Pennsylvania and the other two in Seattle. By doing this, the company transformed the coffee roasting process into an art form. One roasting plant in Seattle has an area of ninety five thousand square feet. In that plant, the company first trains roasters for a period of one year. Thereafter, the company chooses the most qualified roaster to oversee the process of roasting their coffee beans. This roaster is given the responsibility of monitoring the coffee beans while they are placed in a gas-filled drum. These coffee beans remain there for a period of twelve to fifteen minutes. The smell, sight and sound of the coffee beans needs to be ‘just right'. The beans are then transferred to a blood cell analyser where their color is assessed. If they do not comply to Starbuck's standards then the entire batch is destroyed.
Dunkin Donuts could adopt such a strategy for its coffee products. By vertically integrating product functions, the company will ensure that it offers quality products to its consumers. This may not be possible for all products; such as doughnuts. However, beverages like coffee could be vertically integrated
Market development at Mc Donald's
Mc Donald's is one of the leaders in the fast food industry. The reason for this is that the company has established a fast food culture in the US and also in other countries with its restaurants. The company's market development process arose out of a need to satisfy the needs of its business clientele. The company captured this market by its efficient and fast customer service, aggressive marketing and affordable pricing. It also had a large number of chains in the country thus becoming a household name. Dunkin Donuts should adopt this strategy. The company should establish a strong brand name though Mc Donald's initiatives. (Burns, 2007)
Conclusion
Starbucks serves as a unique example to Dunkin Donuts through a number of strategic options. Faced with a need to pull clients into the coffee market, Starbucks created a unique package through beautiful restaurant designs and convenient locations. These example of innovation should be adopted by Dunkin Donuts. Additionally, Starbucks was faced with the challenge of offering a unique product offering. It did this through vertical integration of its coffee bean manufacturers. Mc Donald's can provide some pointers to Dunkin Donuts through its strong brand image; an illustration of what market development can do. Additionally, Dunkin' should ape Mc Donald's conglomerate diversification and product development which are envisaged by customizing product offerings and offering unconventional breakfast menus.
Reference:
Michael V. (2006): Marketing Management, Strategies and Programs; McGraw Hill publishers Irwin,
Moore, I. (2005): High Intensity Marketing; SA Press
Chokeman S and Don E (2005): In the Mix, A Customer-Focused Approach; Marketing Management journal v.14 n.1
Bridge, S. (2008): Understanding the marketing strategies for the large scale businesses. Macmillan
Burns, P. (2007): Marketing strategies; London, Palgrave
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