Dunkin Donut
Dunkin’ Donuts – the birth of a new distribution and franchising concept
Ruth A. Schmidt Acting Head of Department, Department of Retailing and Marketing, the Manchester Metropolitan University, Manchester, UK Brenda M. Oldfield Research Assistant in the Department of Retailing and Marketing, the Manchester Metropolitan University, Manchester, UK
Dunkin’ Donuts is a global retailer of coffee and bakery products. The company is 99 per cent franchised and has used the franchising system as a route to market entry and expansion worldwide. The original historic roots of the company are in the USA and despite wide international expansion since the 1970s, the US market continues to serve as a testing ground for innovations prior to international roll-out. Based on observation and key informant interviews with core members of the management team during a visit to Richmond Project in 1994, the case explores the initial phase of the introduction of a central production facility as an innovative route to preeminence in one test market. Strategic and operational issues are discussed, highlighting the differences and efficiency gains of the central production facility cum satellite store approach compared to the traditional stand-alone on-site production approach. Implications for future developments are discussed.
Introduction
Dunkin’ Donuts is a wholly owned subsidiary of Allied Domecq plc which operates worldwide, making and selling coffee, doughnuts, and other related bakery products. Founded in the USA in 1950, the business started international expansion in 1970, was acquired by Allied Domecq in 1990, and is now the world leading retailer in its field. The company mission statement clearly sets out a continued emphasis on growth and market leadership: “Our dream for the future is to be among the world’s most recognized and respected brands. To accomplish this, we are passionately committed to pursuing the following values in every interaction with all those whom
Ruth A. Schmidt Acting Head of Department, Department of Retailing and Marketing, the Manchester Metropolitan University, Manchester, UK Brenda M. Oldfield Research Assistant in the Department of Retailing and Marketing, the Manchester Metropolitan University, Manchester, UK
Dunkin’ Donuts is a global retailer of coffee and bakery products. The company is 99 per cent franchised and has used the franchising system as a route to market entry and expansion worldwide. The original historic roots of the company are in the USA and despite wide international expansion since the 1970s, the US market continues to serve as a testing ground for innovations prior to international roll-out. Based on observation and key informant interviews with core members of the management team during a visit to Richmond Project in 1994, the case explores the initial phase of the introduction of a central production facility as an innovative route to preeminence in one test market. Strategic and operational issues are discussed, highlighting the differences and efficiency gains of the central production facility cum satellite store approach compared to the traditional stand-alone on-site production approach. Implications for future developments are discussed.
Introduction
Dunkin’ Donuts is a wholly owned subsidiary of Allied Domecq plc which operates worldwide, making and selling coffee, doughnuts, and other related bakery products. Founded in the USA in 1950, the business started international expansion in 1970, was acquired by Allied Domecq in 1990, and is now the world leading retailer in its field. The company mission statement clearly sets out a continued emphasis on growth and market leadership: “Our dream for the future is to be among the world’s most recognized and respected brands. To accomplish this, we are passionately committed to pursuing the following values in every interaction with all those whom