Dunn Brothers Franchise Inc.’s Strategic Plan

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Introduction

The purpose of the paper is to prepare a strategic plan for Dunn Brothers Franchise Inc to introduce a new food menu, which is popular with the customer. Like Starbucks or Caribu Coffee, the company has financial resources and capabilities to expand its business in the US market as well as international market by changing its current products. To provide a proper plan, this paper will discuss the mission and vision, environmental condition or PESTAL factors, strategic analysis, and so on. This report also recommends the company pay more attention to market research as new food should be consistent with their market position.

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Mission

The mission of Dunn Brothers Inc is to establish the company as a premier vendor of the finest coffee in the market by maintaining its inflexible principles that strongly governed the decision-making process and would bring the success of the company. Dunn Brothers Inc has an obvious set of course of action, which has followed and applied them as a strategic tool for the future growth of the business and more suitably be associated to the vision of the company has moved with the mission statement.

The principles of Dunn Brothers Inc has pointed out as:

  • Manage an application of the highest standards of quality to procuring, roasting, and blending coffee beans and fresh delivery to the customer.
  • Ensure an enormous working environment with respect and dignity to each other within the organization.
  • Build up a strong network of enthusiastically satisfied customers all of the time and hold in its arms diversity as an essential element of its business.
  • Contribute positively to the communities and environment.
  • Recognize positively to the communities and environment keeping attention to the profitability that essential for its future accomplishment.

Vision

The appropriate vision of Dunn Brothers Inc gives an extensive complete depiction that it would like to be. After a long investigation on Dunn Brothers, it has been argued that the company’s vision has been established on the components such as organizational core values and objectives to achieving the top gratitude of the franchising coffee shop segment. Dunn Brothers Inc only provides the premium coffee beans roasting, blends in the presence of customers that aimed to prove the respect of the company to the users, and how best the company provides to its customers. The company on only wishes that its customers remember the brand but also recognize it as an icon of purity and standard ultimately turn itself as the most perspective brand in the market above all others though there is not yet any timeframe or numeric goal fixed up.

External Environment or PESTEL analysis

  • Political Factors: – Political issues are playing minor roles in producing and roasting the bean and introducing new organic foods. However, besides fast food items, this company also manufactures hot drinks and some beverages are popular to customers and in this sector political situation has a significant role like rules and regulations to control alcohol levels.
  • Economic factors: – According to Dunnbros (2009), it is necessary to have $90,000 liquid assets and $0.5 million net worth to become a franchisee of Dunn Brothers Coffee, though the company considers specialty on coffee management experience to reduce over financial burden from the franchisee. DBC is a financially strong company as it is a roaster/retailer, which is now competing with Starbucks to a higher extent and with Dunkin’ Doughnuts and bakery chains to a lesser extent.
  • Socio-cultural factors: – Employees of the company are playing a vital role in its success and Dunn Brothers provide job opportunities for all so the employees have come from different countries and cultures (some are from African countries such as Kenya). They know that every bean is different so the tastes and aromas are different but their skills, productivity, and procedures give a unique taste of its coffee, which is popular to people of all classes.
  • Technological factors: – Technological invention will play a vital role to expand its business by preserving and producing organic foods. For successful outcomes, it should use advanced technologies for marketing, distributing, advertising (promotion of the new items), and delivering its products, for example, it can develop an e-commerce system by upgrading its online payment system.
  • Legal Factors: – Besides, to follow the rules and regulations of the government, it also considers its constitution to select a new franchisee and another operation process. However, Dunn bros also follow the local rules when it operates its business in a new area, and it
  • Environmental factors: – Environment is a great concern for the business especially in the places of coffee cultivation. Cultivating coffee requires synchronization of soil, altitude, temperature, and climate conditions, and Dunn Bros always observes that their farmers are not polluting the environment in this synchronization process. They have respect for the environment and the community, and they produce prime quality foodstuffs without artificial color and flavor ensuring that public health is not adversely affected.

SWOT Analysis of Nokia Corporation

SWOT analysis of Dunn Bros
Figure: SWOT analysis of Dunn Bros

Strengths

  • They freshly roast the coffee beans right in front of patrons ensuring the painstaking freshness standard, unique palatability, perfection, and developed fragrance.
  • Dunn Brothers Inc extract the beans from the finest farmers in the globe and consider the sustainability of the agricultural associates; thus, they ensure a good relationship with the suppliers and eventually, a regular supply of raw materials.
  • They provide hygienic and healthy coffee;
  • The atmosphere of their stores;
  • Dunn Bros have incredibly well-trained chefs and staff.

Weakness

  • Undesirably, once brunette beans are heated, the oxygen begins to break down the oils, and the beans instigate to mislay the aroma; however, fresher beans could uphold the strong fragrances.
  • The business needs technological enhancements in terms of e-commerce. For instance, its website lacks online payment and home delivery options, which could have amplified its sales to a further extent.

Opportunity

  • According to estimations, American sales on coffeehouses will rise 125 percent within the next year.
  • The L.A. Times currently declared this company to be the ninth biggest once in the country;
  • It plans to expand all the states of USA;
  • The company has focused, organized, and stable rates of expansion, bringing out vast trade scenarios for their franchisees, as well as economies of scale for themselves.

Threats

  • Strapping strategic policies of the rivals’ franchise food companies like Caribou Coffee, Einstein Noah Restaurant Group, or Starbucks would seriously harm its operations;
  • Competition with Caribou and Starbucks;
  • Where Starbucks has more than 16,000 shops in 35 countries, Caribou Coffee has 420 stores in the US and 100 franchised outlets in the Middle East and South Korea; Dunn Brothers own just 67 stores in Minnesota and 92 stores in total.

Strategic Analysis of Dunn Bros Inc

Corporate-level strategy

More than 95% of the total profits of Dunn Bros Inc have generated from the roasted coffee and beverage segments that means the revenue of Dunn Bros is depends on a single sector, thus, it has maintained very low levels of diversification strategy. On the other hand, it has financial capabilities with brand awareness to diversify its products and increase their status from very low-level to moderate or high-levels of diversification strategy.

Cooperative strategy

DBC has several strategic alternatives such as it could joint ventures or mergers with any of its competitors or similar types of companies to obtain potential economies of scale by a mutual interest of resources and capabilities from designing to the distribution channel.

Marketing strategy

Target market

  • DBP is targeting all health-conscious consumers especially the school, college, and university going youth who also tend to shop in the mall frequently as well as working women, government or private employees;
  • As old people like coffee, it should also introduce new products (including coffee) for old generation considering their taste and health;
  • It should reduce the price of coffee to capture the customers from the middle class and poor people.

Market positioning

In the US market, it is holding the ninth position that means it has a strong market share.

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Marketing Mix

  • Product: The company has introduced a variety of beverages; products among hot drinks include Espresso drinks (Caffe Latte, Cappuccino Espresso, etc.), Brewed coffee (French Roast, Full-City Roast, or decaffeinated), favorites (e.g., Chocolate Steamed Nirvana), and tea (e.g., Chai Tea Latte); besides of that cold drinks are categorized into IceCrema (Blended IceCrema, Caramel IceCrema, etc.), Fruit smoothies (e.g., Strawberry Pink Freeze), and Iced drinks (Iced Mocha Latte is the most delicious);
  • Place: – Dunnbros (2009) argued that throughout America, Dunn Bros have a total of 92 stores within nine states; there are 2 stores in Kansas, 67 in Minnesota, 3 in Missouri, 3 in North Dakota, 1 in Nebraska, in 2 South Dakota, in 1 Tennessee, 7 in Texas, and 4 in Wisconsin; and more recently, they signed a distribution contract with Eden Prairie-based Berry Coffee that delivers coffee for neighboring cafés and industries;
  • Price: – It offers reasonable prices for most of its items. The prices are set by the nature of the beverages, their aroma, the type of beans used, and their nutritional value. They proffer several discounts on the roasted beans (e.g., with 2 lbs of beans, there is a $3 off) (Dunnbros 2009);
  • Promotion: Dunnbros (2009) argued that there are several promotional packages like ‘Roast master Rewards’ (through this offer, individuals use the rewards cards, and the company makes a contribution of 10% of the net sales to the registered association that dispersed the card). If someone spends $40 on drinks or beans they obtain free beverage/coffee/1/2 lb of heated beans; besides these, billboards promoting Dunn Bros consist avowals like “A Cup of Dunn Bros Coffee a Day Keeps the Doctor Away”.
Advertising Cost
Figure: Advertising Cost

Recommendation

  • Due to the global financial downturn, consumers would like to spend money for necessary products and franchisees could not fulfill the financial criteria, so it should reduce the price of the products and license fees to attract franchisees;
  • It should increase its budget (at least 15%) for research and development;
  • It should increase the budget for promotion as it may involve celebrities to advertise its products;
  • It has the opportunity to diversify its product line, for example, organic food can be agricultural, fisheries, dairy products but it will not use any artificial things;
  • Dunn Bros Inc must devise new strategies to bit the competition;
  • As brand awareness is always a key to gain success in an industry, Dunn should upgrade its beverage products to hold the brand awareness;
  • It should concentrate on technological development in packaging, online ordering, digital signage, and modification in payment systems;
  • Proper management of franchisees is necessary to gain vertical integration, more sales growth, and an efficient distribution system, for instance, Dunn Bros can increase control over franchisees;
  • It should assess the market risk such as higher transportation, import costs may reduce the profitability of the venture, and several mega competitors are running on the diversified way to achieve public attention (Kotler & Keller 2006).

Conclusion

This report has discussed the environment of the market, strengths, opportunities, threats, and weaknesses of the company to assess the market position and to give suggestions as Dunn Bros has strong financial capabilities. In conclusion, it can expand its business all over the world by providing franchisees in the international market and build up the biggest fast-food chain in the industry with the global market share.

Reference

Dunnbros (2009). Frequently Asked Questions. Web.

Dunnbros (2009). Give More. Save More. Web.

Dunnbros (2009). Coffee Flavor Guide. Web.

Dunnbros (2009). Hot Drinks. Web.

Dunnbros (2009). News, Press Releases and Awards. Web.

Franchise Help (2009) Dunn Bros Coffee. Web.

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Dunnbros (2009). Locate a Shop Near You. Web.

Kotler, P. & Keller, K. L. (2006) Marketing management. (12th ed.). New Jersey: Pearson Prentice Hall.

Omaha, N. (2009). LaMar’s Donuts & Dunn Bros Coffee. Web.

Team A, S. (2004). Dunn Bros Coffee: Elk River Franchise Marketing Plan. Web.

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BusinessEssay. 2022. "Dunn Brothers Franchise Inc.'s Strategic Plan." January 9, 2022. https://business-essay.com/dunn-brothers-franchise-inc-s-strategic-plan/.

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BusinessEssay. "Dunn Brothers Franchise Inc.'s Strategic Plan." January 9, 2022. https://business-essay.com/dunn-brothers-franchise-inc-s-strategic-plan/.