Dunkin Brands

Topics: Revenue, Dunkin' Donuts, Starbucks Pages: 7 (1980 words) Published: December 4, 2012
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Executive Summary
India is a huge market that most of the companies want to have for their own benefits, the reason for these is the amount of people that live there. The poblation is comparing like china, this important details is gold for every company. Consummtion of every persona is a big data to colect .As the company operates in a highly competitive segment of the food retail industry, brand recognition, product quality, customer service, and competitive pricing are key to building and maintaining market share. Recent earnings have been strong, with sales revenues growing both domestically and internationally. While the firm boasts the highest operating margins of anyone in its peer group, high interest expenses have tempered net margins.

The company has rebounded strongly from the recent recession, though many of its larger competitors have demonstrated more robust financial health. In particular, the firm’s substantial indebtedness may hamper its ambitions to expand profitably if access to affordable financing is diminished. As a result of the 2006 leveraged buyout, the company holds approximately $1.46 billion in long-term debt obligations. The company’s heavy debt burden and relative illiquidity also increase its vulnerability to adverse changes in macroeconomic conditions. In order to mitigate these long term risks and provide greater financial flexibility, we recommend the firm begin to significantly pay down its debt.

US-based foods chain Dunkin’ Donuts has come to India just a few months ahead of the arrival of its global archrival Starbucks, by launching its first store in the national capital on Tuesday. Starbucks is expected to launch in September this year. The company, headquartered at Canton in Massachusetts, plans to set up eight to 10 stores this financial year — all in Delhi. That, it says, would earmark its journey to slowly turn out to be a pan-India player with about 100 stores in the country in the next five years. Its strategy is to be an “affordable” eating place that would bring in the moolah from food. This would thus be unlike the case in the US, where coffee reigns supreme in terms of revenue. |

Hari S Bhartia, co-chairman and founder of Jubilant Bhartia Group, said the aim was to launch an affordable brand in India. “Our products like coffee are priced 10 per cent to 15 per cent lower than competitors,” he noted. “We want more customers to come in so that we get scale in the business.”

The stores will be wholly owned by Jubilant FoodWorks, which also has the rights for Domino’s Pizza and replicate the same model of affordibility. It will pay a royalty fee to Dunkin. Globally, Dunkin’ Donuts has over 10,000 restaurants across 32 countries. It recorded a sales of $6.4 billion in 2011. The 1950-founded company, which is scaling up presence in Asia, is planning to open 300 restaurants in the region over the next few years. Bhartia wants to clearly differentiate Dunkin from its rivals, especially that of Starbucks. “There are 1,800 coffee cafes in the country and diverse brands; Starbucks will be one of them,” he points out. “Our effort will be to differentiate between other coffee players by offering all-day services.” To achieve that, Dunkin Donuts & More’ will offer a diverse food options ranging from donuts (or doughnuts, at Rs 45) to cabiatta sandwiches (Rs 90-110) and, of course, donuts. However, Dunkin is the market leader in the US in regular, decaf ice and hot flavoured coffee in the US. To keep a tab on costs as well as on the quality, 90 per cent of the ingredients are being sourced locally. “We took a year to develop our vendor base,” Bhartia said. “We only import items, for which we didn’t find the right quality.” The company will leverage Domino vendors. It is also synergising many departments like human resources, finance, IT and supply-chain operations between both the brands to ensure profitability in the...
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