Dunkin Donuts Talk

Oh to be a fly on the wall during this board meeting. “We have a newly acquired company that is underperforming” one executive would say. “Yea, they used to be great, but what happened?” said another executive. “We need to strip everything away and focus on basics again,” says a third executive. I can see the transition in thinking, the notes on the whiteboard and the proud summary that catapults a company back into greatness.

Here is a snapshot of what spawn Dunkin Donuts aggressive long-term growth plan.

• What can we the best in the world at? The franchise model for sustained company growth.

• What drives our economic engine? Breakfast products, specifically Donuts and Coffee.

• What are we deeply passionate about? The Dunkin Donuts brand, the franchise model, our loyal customers and our Donuts and Coffee.

Whether they know it or not, Dunkin Donuts executives practiced Jim Collins hedgehog concept from Good to Great with their return to what they do better than anyone else.

As a result, Dunkin Donuts has finally decided it wants it wants to fight back against the likes of it’s competitors McDonald’s and Starbucks. For some time the corporation has allowed the brand become lethargic and comfortable with a marketplace that is passing them by.

All of that is about to change. Dunkin Donuts executives announced this week an aggressive plan to recapture the market space they once owned. According to the newly based Canton Corporation it plans to open 10,000 new stores by 2020, raising their store total to 15,000 worldwide.

With this new, aggressive plan comes a new Dunkin Donuts. It will still have the traditional pink and orange colors that are familiar to so many customers, but they will be introducing new color palates and new store layouts. The traditional large store with a single drive thru lane will be transformed into an efficient customer focused location. Stores will be equipped with two drive thru lanes in order to handle the busy morning rush to work, self service stations which allow the customer to “doctor” their coffee to their taste and there will be a major upgrade in product lines. Dunkin Donuts stores will begin carrying gourmet brownies, cookies, smoothies and other assorted items in an effort to raise their afternoon sales which pale in comparison to their $3.8 billion made annually before noon.

According to Dunkin Donuts there will be a greater focus on the Midwest and the South, greatly branching out from its Northeast stronghold. According to Dunkin Donuts executives the chain will focus on deploying franchises in Cincinnati, Nashville, Indianapolis and the Jacksonville, Florida. Currently there are stores sprinkled in these locations; however, it doesn’t compare to the 1,100 stores located in the greater-Boston area. According to Chris Reidy of the Boston Globe Dunkin Donuts has “one location for every 5,600 residents in that region.”

Dunkin Donuts executives are confident they accomplish this plan within the next ~15 years and thus claim back some of glory that Dunkin Donuts had in decades gone by.

The new Dunkin Donuts executives should be applauded for their aggressive plan to recapture territories throughout the United States. Their ability to think outside their box the way McDonald’s and Starbucks has by partnering with gas station chains, department stores and the like all suggest Dunkin Donuts is finally moving into 20th Century business practices. And the fact they are seeking help from good people within by asking forward-thinking franchise owners to pick up 10 to 25 new locations during this season of growth tells me they have a good chance of seeing this long term plan fulfilled.

Expansion of their brand, menu, franchise owners and territory all within the context of their core competency suggest they have the tools and resources to pull this plan off.

Let’s hope this hedgehog isn't a dying dinosaur any longer.