Dunkins Brands Strategic Performance - Case Study Example

Dunkin’ Brands’ Group s Submitted by s: Dunkin’ Brands’ Group The main offices for this establishment are located in Canton, Massachusetts in the United States of America Dunkin Donuts and Baskin-Robbins were initially owned by a French multinational corporation that was known as Pernod Ricard and afterwards they were bought purchased by the American Multinational company that is known as Dunkin’ Brands. The Dunkin brand group that runs the Dunkin restaurants was started in 1950 and its chief executive officer at present is known as Nigel Travis while the chairman for the group is Jon L. Luther It is among the top franchisers in the quick service restaurants industry and competes with the likes of Starbucks that are in the same industry It has establishments in more than sixty countries in the whole world that are under the management of the Dunkin Brand Group It has more than seventeen thousand supply points all over the world that are also managed by the Dunkin Group Its main products are hot and cold coffee and also baked foods and ice-cream that are sold in the two different franchises that it holds There were over ten thousand five hundred Dunkin’ donut restaurants that were franchised by the Dunkin group and also more than seven thousand Baskin-Robbins restaurants when the year 2011 was coming to a close The sales in the company’s franchises were recorded at an approximate figure of 8.8 billion dollars and the company continues to post successes as it grows further and opens new restaurants all over the globe Dunkin Brands Group is the parent company of Dunkin Donuts (DD) and Baskin-Robbins (BR) that has its headquarters in, Massachusetts in the United States. Dunkin Donuts and Baskin-Robbins were initially owned by a French multinational corporation that was known as Pernod Ricard and afterwards they were bought purchased by the American Multinational company that is known as Dunkin’ Brands. Its history of offering breakfast meals that is supposed to be simple and straightforward has given it an edge over the competitors that are in the same industry such as Starbucks since the company targets the people who are modest and mind about how they spend their money. The company tries to grow in all the aspects so that it can be able to reach as many customers as possible and develop more products that will appeal to these clients in an effort to achieve proper retail placement which normally can be a delicate balance. The company partners with several grocery retailers but does not put its business in the store within a store concept that will include a grocery since they want to be within big places that are frequented by more consumers as the target more people. Dunkin’ donuts has not been left behind as far a technology is concerned since the have employed the use of software that if adopted is able to tell the location of their different stores that are to come up as the software called iSite from geoVue helps the company to analyze where it can put more restaurants that will better serve the people. In the fourth quarter of 2012 Dunkin’ Brands had a variety of highlights that included a 3.2 percent growth in the sales of its Donuts compared to the other stores that are in the United States. In the rest of the world the brand also posted significant success that was exhibited by the opening of 256 new restaurants that included 149 Dunkin Donut restaurants that were opened in the United States. The operating income of this firm was also adjusted by over 16 percent and this is looked at every thirteen weeks which is a remarkable fete and the operating income was underwent adjustments that constituted a margin that was more than 47 percent. The 2012 fiscal year saw tremendous growth in the operations of Dunkin’ as there 665 new restaurants that were newly started all over the world by Dunkin’ and this number put into account those that were opened in the united states that amounted to 291 new restaurants in various places. There was also significant improvement and changes in the revenue department where there was an increase of 6.1 percent and this necessitated the situation where the operating income could go up to 15.3 percent based on the results that were observed for 53 weeks. As all these positive figures were being recorded, the income margin that is derived from its operations was also posting good results at 46.3 percent and the EPS was also changing positively in the region of 38 percent to a price of 1.28 dollars based on the results of 52 weeks. The board of directors went ahead to announce the first quarter dividend that was 0.19 dollars that was a significant increase by a whopping 27 percent compared to the fourth quarter dividend that had been announced earlier. In the US, Dunkin Donut store sale growth in the fourth quarter was as a result of increased mean ticket and higher number of consumers that was brought about by the ongoing concentration on how best to develop the product and market it. This comprised of a growth in the sale of coffee that was robust that was pioneered by the flavored hot and iced espresso drinks; the inertia that they had developed from their core breakfast sandwich idea and the sales that they had made in November of the smoked Sausage that was a limited one time offer; the progressive growth that was being recorded in the bakery sandwiches; and the sale of other limited products that Dunkin’ had developed in that period of time. The Baskin-Robbins of the other hand had its store sales stimulated to grow by the idea that they developed to have the Flavors of the Month that also had flavors that had been inspired by the holiday that included pumpkin pie and peppermint and the sundaes that were on a limited offer for one time only such as the Belgian Waffle Sundae that was served with prairies and ice cream and the pints that could be taken home. The total revenues for Dunkin’ Brands’ decreased by a margin of 4 percent when it is compared to the year that had passed and the reason for this was majorly the extra week in the fourth quarter of 2011 and the delay in the recognition of revenue that happened once that was linked to the move in manufacturing to Dean Foods that had an effect on the sales in the fourth quarter on the products that were developed from ice cream in 2012. If these two situations had been absent, then the revenue would have gone up by 7 million dollars every week and this would have translated to 4.4 percent which would have been motivated by the amplified income from the increase in the sales that covered the whole system and this was being considered in a period of thirteen weeks. The operating income for the same quarter posted positive movement and an increase of 23.2 million which was roughly 52 percent up from the year that had passed that was necessitated by an 18.8 million dollars net impairment charge that was not in cash form that came from the company’s investment in the joint venture that it runs in south Korea and also the rise in the loyalty income based on thirteen weeks that was eased by the effect of the extra week in the fourth quarter of 2011. There was also a significant rise in the adjusted operating income that was posted at 6.8 million dollars which was roughly 9.3 percent compared to the fourth quarter of 2011 particularly as a consequence of the rise in the royalty income based on thirteen weeks and also a rise that was registered in income from the joint ventures that Dunkin’ Brands’ has and this was also offset by the extra week that the fourth quarter in the 2011 had. The chief executive officer who is also the president of Dunkin’ Donuts, Nigel Travis explained that the fourth quarter had been very strong that had necessitated them to finish the year 2012 being able to post 12xpercent and also adjusted the operating income growth and almost 40 percent grew the earnings that are based on every share’s growth as the year passes. He reiterated that Dunkin’ enjoys a one of a kind brand legacy that is strong and very instrumental in the United States and the worldwide opportunities that they were able to get to grow and expand their restaurants were able to dwell on the profitability and this resulted in growth for both the franchises and the shareholders. The connecting and strategic development method that Dunkin’ employs is bearing fruit and the Chief Executive Officer stated that Dunkin was excited to start selling Dunkin Donut franchises in California. The consumer and franchise demand for Dunkin’ Donuts continues to grow even though there is a macro-economic instability that is being experienced and the competitive environment is getting harder. The relationships that Dunkin’ has with its franchises are very strong and this helps them to keep on relying on the influence that their asset-light business model has provided for them and this gives them assurance that a target of 15 percent earning for every share can be met in 2013. Like it competitors in the market, Dunkin has decided to pursue the Asian market and as a result, it has more than seven hundred establishments in South Korea and they have the intention of growing that number in the next ten years. The shops that are in South Korea closely resemble those that are in the United States that have yellow and orange chairs, wi-fi internet access and plasma television screens to engage the customers that come in. The firm created a variety of products that are unique to the South Korean market so that they could complement those that resemble the ones that are sold in the American market. The offer donuts that are made from sweet soy beans and green tea lattes since their Korean menus focus on natural and ingredients that are organic so that they can attract the customers that mind about their health. The company has some drinks that are made in powder form that can be taken home by the consumers and mixed with water to make a solution. The company pursued research and development into making the menu better and having choices that will be innovative in 2006 by employing the services of a culinary team that consisted of chefs that had experience to work with it. The leader of this team of chefs is Stan Frankenthaler who graduated from the culinary institute of America and he is also the executive chef for the brand and also holds the office for the director of culinary development. 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