Jamba Juices and Dunkin Donuts Strategies - Case Study Example

Porter’s Five Forces analysis

Dunkin’ Donuts have applied the Porter’s Five Forces in determining its competitive intensity and the attractiveness that it has in the market. The forces have been effective in helping Dunkin’ Donuts identifying the power of the business when they compare with the other competitors such as Starbuck’s. One of the forces that have been used by the business to determine their position is supplier power (Schermerhorn, 2013). The suppliers to the business have been an important factor in achieving competition. Despite the fact that Dunkin’ Donuts and Starbucks use the same resources in their businesses, Dunkin’ Donuts have been able to obtain resources for the production of coffee and donuts.

The other factor that has been considered to drive competition is the buyer power. Dunkin’ Donuts have been able to determine the ease that the buyers have to influence their prices. The factor that has been considered in this case is the importance of the buyers, the number of the buyers and the cost that the consumers will incur when they move to the other suppliers. Starbucks has had good reputation for its products but Dunkin’ Donuts developed strategies that will make it gain the reputation and also gain loyalty of all international consumers. The organization has been able to gain 30% of Americans who consume coffee (Schermerhorn, 2013).

Competitive rivalry have al.so been taken into consideration by the organization. Dunkin’ Donuts has identified the main rivals in the coffee market to be Starbucks and Mc Donald. With the market rivals identified, the organization has developed strategies that make it have more consumers despite the lowering of price by the revivals. Threat of substitution is another factor that has been considered in the market (Knowles, 2010). In the market that Dunkin’ Donuts, there are other substitutes that can be used for coffee such as tea. Coffee, the main product of Dunkin’ Donuts has no close substitute since the market that the organization operates is mainly composed of Americans who consume 500 billion cups in a year (Schermerhorn, 2013). Coffee is the most popular global beverage and tea has not been a threat to the beverage.

The last factor that has been considered is threat of new entrants into the market. The beverage industry has been in a constant growth. There are strategies that however have been made by the organization to make its products popular despite the new entrants such as Starbucks. Exploring the international market has been one of the strategies for popularity of the organization despite the new entrants.

Jamba Juices strategies and Dunkin’ Donuts strategies

The main strategies that have been developed by Jamba Juice are expanding its stores worldwide. The method that is to be used to achieve this is through franchising. In the increased launch of stores, there is also the strategy of focusing on brand development. There has been increased investment in the business with also the development of new brands. The organization is also expanding in-store products beyond just smoothies, complementary acquisitions and selling other products such as bottled water beyond its stores. The organization has also acquitted some of the investments such as Oprah Winfrey’s Talbots’s tea (Schermerhorn, 2013). The organization is also developing a market of beverage alternatives.

With the strategies, there are advantages that the organization have receives. The wide range of products has enabled the Company to expand its market share. The increase in the market hence has increased sales. The expansion strategy is also similar to that of Dunkin’ Donuts. Despite the expansion of its stores in other countries, Dunkin’ Donuts still have the strategy of increasing its stores such that there is global consumption of their coffee and donuts (Gabaccia & Gabaccia, 2009). The disadvantage that Jamba Juice has experienced is difficulties in the management of the varied products and management of the new brands. With the intension to explore the beverage market, the management has not developed the right strategies to explore the market.

Both Jamba Juice and Dunkin’ Donuts have the strategies of expanding their business to the global market. When the expansion is made, there will be dilution of the company brand since there will be the introduction of different new brands in new locations. The consumers of the products can also see the products as not being cool. This will increase loses to the organization.

The concern that is to the two organizations that are striving to increase their market through investing in new locations and new consumers is striking the right balance of the places needed and the products to serve the tight competition that is in the industry.

SWOT analysis for Dunkin’ Donuts

Strengths

The operation of Dunkin’ Donuts has been characterized with a strong brand name that is recognized globally. The consumers of the coffee and donuts that are produced by Dunkin’ Donuts also are loyal. The loyalty of the consumers has increased the sales of products. The organization is also popular for different bakery products including bagels, biscuits, muffins, and pastries (Gabaccia & Gabaccia, 2009). Consumers also love the hot beverages that are offered in the stores. With over a thousand varieties of doughnuts, the stores have been ideal for breakfast for many Americans. The organization also has enough experience in the beverage industry and most of the consumers have been impressed with this.

Weaknesses

Dunkin’ Donuts have had constant rift with the owners of franchise. There are different instances that the franchises have been sued. The constant conflicts have tarnished the image of the organization. The organization has also experienced competition from the other producers such as Starbucks and this have led to reduced share growth. The business has not invested much in the growing economies, which can be a huge segment.

Opportunities

The strategies that the organization has developed have increased its presence in the other parts of the world. The developing countries have increased disposable income and this have increased their purchasing powers. The online marketing that has been introduced by the business has increased market access. The low calorie snacks that have been introduced in the market by Dunkin’ Donuts have increased its market shares.

Threats

Despite the introduction of the products in different regions, the business has faced the threat of people moving to eating habits that they consider healthy. Dunkin’ Donuts have also faced competition even from the local bakeries and cafes. The raw materials that are used in the business have been in an increasing trend in the costs (Gabaccia & Gabaccia, 2009). In its expansion, the organization has faced difficulty in changing the snaking habits of some of the people such as in china and India.

Strategic management of Dunkin’ Donuts

Dunkin’ Donuts in its management strategies have focused on becoming a leader in the United States and in other parts of the world in coffee and snacks. In the management, the planning has focused on offering better quality products at an affordable price than the other competitors can. Product differentiation is also a strategy that has been put into place by the organization. The management has mainly focused on the business strategy to ensure that the goals of being the world leader in coffee and snacks shop are achieved.

The management has taken into consideration six main principles in the management of activities. The right goal is a principle that is held by the management of Dunkin’ Donuts. With the right goals, there has also been the consideration of value proposition. This is different from the benefits that the organization obtains from those of the competitor (Knowles, 2010). The other principles that have been used to achieve the goals include continuity, trade-offs and distinctive value configuration.

Moves by the competitors of Dunkin’ Donuts

The competitors of Dunkin’ Donuts have developed different strategies to enable them stay in the market. There are strategies that are similar to those that have been developed by the competitors. Starbucks being a main competitor have had a similar strategy of creating brand loyalty with the local and the international consumers (Gabaccia & Gabaccia, 2009). Brand differentiation has been a strategy of Dunkin’ Donuts but has also been the strategy of the competitors. Starbuck have gone further in the differentiation and has tried to lure consumers to their products through including an aroma of a high lifestyle.

There are strategies that have differed with those of the competitors. The profits that are made in Dunkin’ Donuts are in the long run. The competitors such as Starbucks have oriented their profits to be achieved in short terms. The strategy has made Dunkin’ Donuts have economic profit as compared to the competitors who achieve zero economic profit. Dunkin’ Donuts have been in the process of increasing its stores while some of the competitors are closing down their stores. Starbucks in the recent news closed six hundreds of its stores (Knowles, 2010). This indicates the insufficient business mode that it has been operation. The business model of Dunkin’ Donuts however has been perfect and is driving it to achieving the goal of being the trop in provision of beverages and snacks globally. The experience is an explanation to why the prices of coffee offered by the competitors are high when compared to those offered by Dunkin’ Donuts.