Strategic Management in Dunkin Brands Group - Research Paper Example

Strategic Management - Dunkin’ Brands Group, Inc. (DNKN) Table of contents 0 Introduction 3 2.0 Dunkin’ Brands Group, Inc. – Strategies, objectives, leadership and culture 2.1 Current strategy 3 2.2 Long-term objectives 4 2.3 Organization chart 4 2.4 Top Leadership Bio’s 5 2.5 Organization Culture 5 2.6 Summary of the Top Current Risks 6 2.7 Top 3 Competitors in each of the Domestic and International Markets 7 3.0 Conclusion 7 4. 0 References 7 1.0 Introduction Dunkin’ Brands Group is one of the most powerful chains of the global quick service restaurants industry. The firm currently operates in about 60 countries; in 2013 the firm’s profits reached the $9.3 billions worldwide (Dunkin’ Brands, Organizational Website, About 2014). The firm’s success in the international market could be understood if reviewing its strategies and objectives, as presented above; in addition, the firm’s leadership and culture seems as having a critical role in the firm’s success. 2.0 Dunkin’ Brands Group, Inc. – Strategies, objectives, leadership and culture 2.1 Current strategy The strategy of Dunkin’ Brands Group is based on franchise. According to the firm’s 2013 Annual Report the specific strategy offers to the company the following advantage: being released from the costs related to the daily operations of its restaurants, the firm is able to emphasize on sectors that are critical for the business success, such as ‘menu innovation, marketing and franchisee support’ (2013 Annual Report, p. 1). The above strategy of Dunkin’ Brands Group can be characterized as an ‘Analyzer’ strategy (Daft 2010, p.71) since the following term is met: the firm keeps certain parts of its strategy stable, such as the use of franchise, while other parts are continuously updated; the continuous changes on the firm’s menu are examples of this practice. Moreover, the overall strategy of the firm can be characterized as aligned with the rules of geocentrism (Culpan 2002, p.51) since key the firm’s units worldwide are considered as part of an integrate business unit, even if the method of franchise is employed by the firm for securing global expansion. 2.2 Long-term objectives The establishment of long-term objectives is a critical part of the strategic planning process (Lussier 2008, p.123). The long – term objectives have the following characteristic: the time required for their achievement can be long, usually more than a year (Lussier 2008). In the case of Dunkin’ Brands Group the increase of the number of the firm’s units worldwide can be considered as one of the firm’s long-term objectives (2013 Annual Report, p.2). The improvement of the firm’s ‘relationship with its franchisees’ (2013 Annual Report, p.2) is another key long-term objective of Dunkin’ Brands Group. 2.3 Organization chart The development of an effective business strategy can require different strategic tools; the organization chart is one of these tools. The organization chart shows the business units so that existing business infrastructure can fully support daily business operations (Karami 2007, p.163). Organization chart is quite valuable in improving operations: by developing a detailed organization chart managers are able to set appropriate communication channels across the organization and to distribute tasks to employees who can respond to the relevant demands (Phillips & Gully 2011, p.454). The organization chart of Dunkin Brands Group has a U-form (Dunkin Donuts Blog 2014). In such structure there is a central business unit (headquarters) and all other units are depended on the above unit (O’Toole & Mayer 2013, p.79). In fact, the organization chart of Dunkin Brands Inc would have the format presented in graph 1 (Figure 1). Figure 1 – Organization Chart in Dunkin Brands Group Inc (Dunkin Donuts blog, 2014) 2.4 Top Leadership Bio’s In Dunkin Brands Group Inc leadership has highly promoted sustainability. Among the measures taken by the firm’s leaders towards this direction emphasis could be given to the following: a) control of the firm’s CO2 emissions, b) careful use of water, c) appropriate management of waste, d) introduction of low-fat products, using the sign ‘Bright Choices’ and e) limitation of energy used in the firm’s units worldwide (2012 Corporate Social Responsibility Report, p.4, 10 and 13). In addition, the franchisees of the firm worldwide have the chance to use a toolkit named as ‘Power Down, Profit Up’ (2012 Corporate Social Responsibility Report, p.13); through these toolkits franchisees are able to ensure the limitation of energy used in their units. 2.5 Organization Culture When referring to organization culture emphasis is given to the ‘norms, values and beliefs shared by people within organizations’ (Hill & Jones 2007, p.403). These values and beliefs need to be taken into consideration by a firm’s strategic managers when designing the strategy of the business (Hill & Jones 2007, p.403). In Dunkin Brands Group Inc organization culture focuses on the interests of stakeholders, meaning especially customers, employees and the community (2012 Corporate Social Responsibility Report, p.4-5). Particular emphasis is also given to the effects of the business on the environment; for minimizing the impact of its operations on the environment the firm has set Environmental Footprint as a criterion in regard to the structure of business activities (2012 Corporate Social Responsibility Report, p.4). In this context, Dunking Brands Group Inc seems to be a company that values sustainability and which tries to respond to the needs of its stakeholders at the highest possible level. 2.6 Summary of the Top Current Risks The important differences between the compensation of executives and that of employees at low levels of the organizational hierarchy seem to be a critical risk for firms operating in this industry (Ruetschlin 2014). In fact, due to this phenomenon the industry’s firms are highly exposed to conflicts in regard to their internal environment, a fact that threatens their market position (Ruetschlin 2014). The risks related to the industry’s suppliers should be also mentioned: for example, the products sent by suppliers may be damaged because of extremely adverse weather conditions or because to problems in the systems of the means of transportation involved (Fast Casual 2013). It is also possible for the products of fast food industry firms to be damaged while within the fast food restaurants: contamination in the fast food industry is a problem that has highly expanded despite the industry’s strict quality standards (Fast Casual 2013). According to Robbins (2014) the increase of crimes in fast food restaurants cannot be ignored; this phenomenon is related to the increase of criminal behavior in general but could be also caused because of lack of effective crime control locally. 2.7 Top 3 Competitors in each of the Domestic and International Markets In the context of the US market the three major competitors in the fast food industry are: ‘McDonald’s, Subway and Starbucks’ (Oches 2013). Dunkin Donuts ranks at the seventh position in the relevant US industry (Oches 2013). In the international market the industry is characterized by the dominance of ‘McDonald’s, Subway and Burger King’ (Said 2013). In the global market the position of Dunkin Donuts remains the same: the organization ranks again seventh (Said 2013). 3.0 Conclusion The growth of Dunking Brands Group Inc. in the fast food industry, both locally and internationally, has been related to certain factors: organizational culture has been appropriately customized, so that the interests of stakeholders are addressed, while the organizational structure has been designed so that business operations are effectively monitored. In the future the firm should introduce measures for limiting its exposure to the industry’s risks, as presented above. The fact that competition in the industry is quite strong could delay the increase of the firm’s profits; still, such increase could be achieved if the firm would invest more on innovation and product differentiation. 4.0 References Culpan, R. (2002) Global Business Alliances: Theory and Practice. Westport: Greenwood Publishing Group. Daft, R. (2010) Organization Theory and Design. Belmont: Cengage Learning. Dunkin’ Brands Group Inc. (2014) Organizational Website. Retrieved from http://www.dunkinbrands.com/ Dunkin’ Brands Group Inc. (2013) 2013 Annual Report Dunkin’ Brands Group Inc. (2012) 2012 Corporate Social Responsibility Report. Dunkin Donuts Blog (2014) Corporate structure at Dunkin Brands. Available at http://dunkinbrands.blog.com/2013/04/30/corporate-structure-at-dunkin-brands/ Fast Casual (2013) 5 risk management tips for the food industry. Jul 23, 2013. Available at http://www.fastcasual.com/news/5-risk-management-tips-for-the-food-industry/ Hill, C. and Jones, G. (2007) Strategic Management: An Integrated Approach. Belmont: Cengage Learning. Karami, A. (2007) Strategy Formulation in Entrepreneurial Firms. Aldershot: Ashgate Publishing, Ltd. Lussier, R. (2008) Management Fundamentals: Concepts, Applications, Skill Development. Belmont: Cengage Learning. Oches, S. (2013) The QSR 50. Aug 2013. Quick Service Restaurants. Available at http://www.qsrmagazine.com/reports/qsr50-2013-top-50-chart O’Toole, J. & Mayer, D. (2013) Good Business: Exercising Effective and Ethical Leadership. London: Routledge. Phillips, J. & Gully, S. (2011) Organizational Behavior: Tools for Success. Belmont: Cengage Learning. Roberts, J. (2014) Fast Food Crime is on the Rise. J.R. Roberts – Security Strategies. Available at http://www.jrrobertssecurity.com/fast-food-crime-prevention.htm Ruetschlin, C. (2014) Fast Food Failure: How CEO-to-Worker Pay Disparity Undermines the Industry and the Overall Economy. Apr 22, 2014. Demos. Available at http://www.demos.org/publication/fast-food-failure-how-ceo-worker-pay-disparity-undermines-industry-and-overall-economy Said, S. (2013) The Top 10 Biggest Chain of Fast Food Restaurants in the World. May 22, 2013. The Richest. Available at http://www.therichest.com/rich-list/most-popular/the-top-10-biggest-chain-of-fast-food-restaurants-in-the-world/ Read More