Dunkin’ Donuts Essay
Dunkin’ Donuts is one of the famous franchises in the world that serves coffee and baked goods like donuts, bagels and other bakery products. Bill Rosenberg is the founder of Dunkin’ Donuts. Today Dunkin’ Donuts has somewhere around 7988 outlets worldwide and out of those outlets 5769 are only in the United States and the rest 2219 are internationally based franchises and by 2025 Dunkin’ plans to open somewhere around 15000 plus coffee shops throughout the US. Dunkin’ Donuts operates in approximately 30 countries worldwide, they operate in countries like Aruba, Bahamas, Canada, Chile, Germany and UAE etc.
The organization claims that America runs on Dunkin’ and the slogan of the company is “Something fresh is always brewin’ here”. At the end of the 2007 fiscal year Dunkin’ had a sales turnover of approximately $5.3 billion. Dunkin’ Donut serves approximately 3 million people every day worldwide. Dunkin’ Donuts serves nearly a billion cups of rich coffee every year. Dunkin’ Donuts offer a range of 52 types of donuts and bakery items and numerous flavors of coffee to its customers. (Dunkin’ Donuts 2009)
The mission statement of Dunkin’ Donuts is that it will work hard to be the dominant retailer of high quality donuts, bakery products and beverages in the market in where they choose to compete. The mission statement has helped the company to grow and develop itself and has also helped it to come this long way that is from where it started out to be a single coffee shop to where it is now having somewhere around 7988 outlets worldwide and out of those outlets 5769 are only in the United States and the rest 2219 are internationally based franchises and still the company plans to expand itself. The objectives of the mission statement of Dunkin’ Donuts are as follows:-
- Dunkin’ Donuts aims to become a dominant retailer in the food and beverage industry
- Aims to provide high quality products and services to its customers
- Provide a superior customer experience and to stay above the competition
- To create long-term relationships with the suppliers in order to main an uninterrupted supply of their products
Dunkin’ Donuts strives to establish itself in every market niche (Dunkin’ Donuts 2009)
The vision of Dunkin’ Donuts is to be the world’s largest coffee and baked goods chain and to incorporate teamwork, effective communication, enjoyable work and honesty in the company’s work force in order to get to the goals and objectives to be successful in their mission. It basically started with keeping the customers in mind that what are their need and preferences. Dunkin’ Donuts have added a new range of coffee in their menus while keeping the customers in their mind.
This new range of coffee is known as “Flavorology”. Dunkin’ Donuts has realized the fact that the customers are always looking for new tastes and flavors in coffee as they look forward for a different start for every day. And with new flavors of coffee it helps the customer to do so rather than having the old and traditional monotonous flavors of the coffee.
Dunkin’ Donuts retain their customers by providing them with the fastest customer service and fresh food than anyone else efficiently and effectively. Efficiently and effectively here means that the company wants its services to be targeted correctly to a range of consumers from children to adults. Dunkin’ Donuts provides the friendliest service to its customers with top quality of food and it operates in clean and hygienic environment. (Dunkin’ Donuts 2009)
If we view the organization from a social responsibility perspective, enlightened organizations like Dunkin’ Donuts view internal and external environment as their stakeholders of the company that is the management of the company believes that the stakeholder can affect the processing of the company. It must be remembered that every stakeholder has a very different criterion of responses because they all have a different interest in the company.
The primary stakeholders of the company would be the shareholders, the investors, the employees, and the customers. What the shareholders and the investors want from the company is that the company achieves its profits, the employees of the expect work satisfaction, pay along with good supervision and the customers are concerned with quality, safety and availability of services when they require it. And when any primary stakeholder group is not satisfied the organization progress becomes questionable. From these the active stakeholders would be the employees, investors and the shareholders, whereas the passive stakeholders would be the customers and the customers want to get high dividends for their investment.
The secondary stakeholders of the company would be the government and the community. Most companies like Dunkin’ Donuts exit under only a charter and licenses and operate within the limits of safety laws, environmental protection and other laws and regulations. The socially responsible organizations like Dunkin’ Donuts consider the effect of their actions upon all stakeholders. What all of these want from the company is that company is ethically and socially responsible and when this secondary stakeholder group becomes dissatisfied, the reputation of the company gets tarnished.
The active members would be the community and the special interest group and the passive member would be the government. What the stakeholders want from the company is that they want their needs to be maximizing their value in the company. For example, if both the customers and the employees along with the stockholder interests are addressed then both of the groups will benefit from the sales of the company. Read about Doughnut Industry
(Dunkin’ Donuts 2009)
An organization’s environment is mostly composed of those institutions or forces that are outside the company and potentially affect the organization’s performance. These typically include suppliers, customers, competitors and government and public pressure groups etc. The environment that surrounds Dunkin’ Donuts includes opportunities and threats and it depends on the company’s strategy as well. It shows that how Dunkin’ Donuts takes advantage of opportunities and finds solutions for its problems.
The management of the company should keep in mind the tastes and the preferences of the customers are always changing. The changing environment of the company can be considered as an advantage and it is important that the executives Dunkin’ Donuts pay more attention to the changing nature of the environment and attitudes and behaviors of their customers. The environmental analysis of Dunkin’ Donuts is based on social responsibility, environment and fuel. These three forces have identified their relevance with the company and it also shows how the company adapts itself to these three forces operating in the environment. (Cravens 2000)
Dunkin’ Donuts has to make sure that they are practicing in an ethically and a social environment or not. Social responsibility means that the company whether it is public or private has responsibility to society and it the company who has to keep their actions and practices in the best interests of the people. The social responsibility of the company is based on four kinds of responsibilities and they are as follows:-
- Economic responsibility: an organization is the basic economic unity of a society. The responsibility of the company is to produce the products that the society wants and to maximize the profits for the company’s shareholders and owners. When economic responsibility is carried out to the extreme is called profit maximizing view. This view basically shows that the corporation should be operated on a profit oriented basis. And its mission is to increase the profits so long that the company within the rules and boundaries of the game. (Daft 1997)
- Legal responsibility: defines what the society thinks is important with the respect appropriate behavior. The companies are expected to fulfill their economic goals within the legal framework. Legal requirements can be imposed by the local, national and international regulatory services.
- Ethical responsibility: basically includes behaviors that are not necessarily codified into law and may not serve as the company’s direct economic interests. If the company wants to be ethical, the organization’s decision makers should act with fairness, equity, respect the rights of the individuals and the employees of the company and provide different treatment of individuals only when it is considered relevant to the company’s goals and tasks.
- Discretional responsibility: it can be defined as the organizational responsibility that is voluntary and guided by the organizations desire to make social contributions and which is not mandated by the economic, law or ethical responsibilities of the company. The discretionary responsibility is the highest criteria in the social responsibility of the company because it goes further than the social expectations that contribute to the community’s welfare. (Daft 1997)
Social responsibility has Dunkin’ Donuts to grow and develop. Dunkin’ Donuts has a respectable position due its charitable work and community involvement programs. The company and their employees play a major role towards in community service.
Environment responsibility means that the company maintains a clean and safe environment for its customers to benefit both the company and the people living around where the company operates. The trends in the environment have a huge impact on the organization. The environment can provide major opportunities as well as threats for the company. Dunkin’ Donuts is known as the no.1 retailer today in hot and ice regular coffee and its donuts. This basically shows Dunkin’ Donuts has the strategic ability to adapt to the changing forces resulting in the environment.
Dunkin’ Donuts is committed to the environmental responsibility of a community. Dunkin’ Donuts follows the environmental regulations and promote cleanliness within their surroundings. Dunkin’ Donuts supports charitable programs and took the first steps in promoting, supporting and participating in the community.
Dunkin’ Donuts has also sponsored educational programs in schools and the company has also provided funds for different types of events like Special Olympics, AYSO soccer teams etc. Dunkin’ Donuts has entered into a relationship with a non-profit organization called ‘Coffee Kids’ for supporting families in the coffee-producing countries like Mexico and Central America. In 2008, the company went ‘green’. And it opened its very first LEED (Leadership in energy and environmental design) outlet, which is a part of their corporate social responsibility.
Changes Faced by Dunkin’ Donuts
The burning issue facing that is facing most organizations today in their environment is the rising prices of the fuel. The companies have to increase their products process due to the increase of fuel process and when the prices of the products increase the sales of the company decrease. The increasing prices of petrol has created a problems for the company by increasing the costs of doing business i.e. making of the products and the sales of the company decrease with the profits.
As we know that electricity is produced through fuel so due to an increase in the fuel prices the electricity cost has also increased. At Dunkin’ Donuts, the food is prepared in machines which run on electricity. The company had raised the prices of its products worldwide recently and this has caused the sales of the company to go down. Dunkin’ Donuts is trying to find new ways of producing the products efficiently so that the profits of the company can increase. The company is also trying to specialize in certain types of beverages that are produced by hands and the use of machine is limited thus, saves more electricity.
Advantages and Disadvantages of a Mixed Economy
Advantages: the advantages of mixed economy are as follows:-
- There are many freedoms in a mixed economy for companies like Dunkin’ Donuts, but based on the ratio of capitalistic elements to socialist elements
- People decided to into business for by themselves, and they have the option that what they want to produce and sell and they are allowed to set their own prices.
- Companies pay taxes but they reap benefits from those taxes they pay for example, through social programs, roads and other infrastructure elements, and other government services.
- Balance is able to be altered in the mixed economy to suit changing conditions (Ikeda 1997)
Disadvantages: the disadvantages of mixed economy are as follows:-
- The companies to find and develop their own market and niche markets for their products that they want to sell.
- The companies are not in total control and they are not in control of the taxes they have to pay, for operating in that country.
- The government can intervene at any time and without any reason.
- Mixed economy doesn’t use the optimal level of natural resources. (Ikeda 1997)
As we know that a mixed economy is neither pure capitalism nor pure socialism but it is a mixture of both. In the modern world, what we find is mostly are mixed economies. Mixed economy means that it is operated both by private enterprise and public enterprise, i.e. private companies are not permitted to function freely and uncontrolled through price mechanism.
On the other hand the government intervenes to control and regulate private companies in several ways. It has been realized that a free functioning of private companies result in several types of evil. For instance, free functioning of private companies’ produces trade cycles that is sometimes depression and unemployment and at other times booms and inflationary situation.
The Relationship between the Recession and Depression Phases of the Economic Cycle and Unemployment
Global recession plays a very important role in the buying behavior of the general public. Statistics show that great deals of industries are also facing a meltdown. Because of high rate of inflation, the people are finding it hard to go in new products because things have become more expensive. The external factor apart, major domestic elements, including an ailing economy, unstable price of the crude oil, unending inflationary spiral and high cost of business, also impinge upon the situation.
For example, due to this global recession the manufacturing output in the United Kingdom (UK) has been reduced by 7% by the end of 2008. The root cause of this global recession is the collapse of housing market in the United States (US), which led to a financial crisis of $8 trillion.
For Example, The US is in at the moment is not critical situation where it’s currency is depreciation and the macroeconomic indicators indicate that the country is very weak and there is a great deal of uncertainty in its economy, and because of this the recession is increasing and the economy can go into a depression very quickly and the value of dollar is still decreasing because oil prices are increasing. The depreciation of US dollar is linked with the movement of oil prices because the world of oil trade is always done in dollars. The relationship between the dollar and oil prices is under a serious threat because the value of the dollar is falling and as the economy of the US goes into the recession.
Relationship between Recession and Unemployment
Due to the recession of 2007-2009 you can see in the diagram that the unemployment rate is growing at a very rapid pace and it is not relenting at all. The relationship between Recession and Depression Phases of the Economic Cycle and Unemployment is parallel, how so, when one increases the other increases as well. Due to the recession the people are in constant panic because they have been losing jobs, therefore they demanding help from their government to support and protect them.
This is where the governments enter the scene; they protect goods and capital in order to safe guard jobs. And this would lead to economic nationalism, what is going to happen is that the organizations around the globe that would be most affected by economic nationalism. (Parks 2009)
I believe that with the recent recession that it has increased the unemployment rate globally and will continue to do so. It has been predicted by the economists that the unemployment will have effects like change the inflation rate and increase in the price of the commodities and all this made the market and the economy very unstable. What happens is that jobs are cut and this leads to decrease in the manufacturing, with this effect many companies had to go through problems like that and this led Dunkin’ Donuts to close some of its outlets, so that it is able to maintain its global value. There has been tremendous effect on unemployment, commerce and business as well due to recession.
Advantages and Disadvantages of Prices Intervention in the EU Agricultural Sector
There is a common policy regarding the agricultural sector due to European Union (EU). EU plays a major and a crucial role in the agricultural policy of EU in linking with diverse European countries; therefore it has helped countries to solidify their national commitment with EU. The objectives of the agricultural policy of EU are that as follows:-
- The need to increase the productivity level in all the European countries
- The need to stabilize the agricultural markets in the content
- To ensure that the food supplies are regular
Price intervention can be defined as a minimum price which is set by the government for agricultural based produces and if by some reason the prices fall then the government has to buy the produce at that level of prices and not those that were set by them. (Messerlin 2001)
Advantages: the advantages of price intervention in the EU agricultural sector are as follows:-
- It helps the markets and the economy become stabilize
- It gives the farmers are given a standard of living
- The farmer can make profits on his/ her produce, because the subsidiary on the produce is being paid by the government
- The prices of the products remain stable
- The people can afford to but the products for their consumption
- There is equilibrium in the EU agricultural sector
- It stops the market players to create a monopoly (Messerlin 2001)
Disadvantages: the disadvantages of price intervention in the EU agricultural sector are as follows:-
- The government doesn’t respect the market, this could lead to a decrease in the produce and as well as its quality
- The farmers can incur losses if EU decides to cap the prices
- The farmers can go out of business (Mendes 1987)
Factors That Might Cause International Mergers and Acquisitions to Fail
Globalization plays a manager role in the merger and the acquisition of companies. Globalization amplifies the cultural diversity of an organization and the company needs to be aware of the culture diversity within the organization so that they can guide the managers when they take decisions. Managers need to further their contributions to the organization by being informed about cultural differences among the company’s international operations. The factors that lead to acquisitions and mergers to fail are as follows:-
- Language Barrier: when the 2 companies are negotiating over the acquisition of the company, another problem like language barrier can arise. Due to a language barrier between both the negotiating parties communication will become faulty and the poor communication would result in misperceptions and misunderstanding of other executives and teams that are here to make a deal with the company. And sometimes it happens that in cases of international acquisitions and mergers, information can be held intentionally, which will jeopardize trust among the companies and this would lead to a long lasting conflict between them and they would not be able to achieve their desired goals.
- Cultural Differences: cultural differences can lead the merger of tow companies to fail, why, because there is usually no direct relationship between a person’s personality and the style of negotiation but it must be remembered by both parties that cultural background is somewhat different between both of them and it plays an important role. And if both parties do not understand that this could lead to a great deal of problems for both of them. (Fullmer 1983)
- Integrative Strategy: tends to provide outcomes that will satisfy both of the companies and it will build long term relationships between the two and it will help the employees to work together with each other in the future. Integrative bargaining strategy helps the negotiators to bond with each other and with this bond it makes both parties satisfied when they leave the table that they have achieved some sort of victory over the other, it is a win, win situation for both the companies. And the availability of the resources the amount of variable resources is divided among both the parties. (Bruner & Perella 2004)
- Accommodative Strategy: this would help the company to build credits for later issues and it will minimize the loss when the company is losing and it will also create harmony and stability in the company’s environment.
- Compromise Strategy: if they believe that the goals of the company are important. It will help the company to achieve temporary settlements to vey complex issues and problems and finally the company will be able to use it as a backup if collaboration along with competition fails. (Bruner & Perella 2004)
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Dunkin’ Donuts – Official Website (2009), Retrieved from, < https://www.dunkindonuts.com/aboutus/> [Accessed on 31st July’09]
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