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