Research Task 0 & 1

Name: Dimitar Dimitrov

Student ID: I6208982

University: Maastricht
University
Date: 02.11.2020

Tutor, Group Alexandra

Number: Bassermann, 15
RT0

Our team consists of five group members: Hanna, Maxim, Dimitar, Luca and Jiline. We chose the
company Dunkin´ Donuts, which is an American company that offers coffee and baked goods. It took
us a lot of time to finally select our company, due to constraints such as the blacklist and too little
information given. We chose Dunkin´ Donuts for several reasons. First, the internet provides enough
information and data about this company, such as an annual report. Furthermore, Dunkin´ Donuts is
currently only operating in a few countries in the world which provides us several opportunities to
expand. The third reason concerning our decision was that Dunkin´ Donuts is a well-known brand,
which makes it easier for us to settle down in a new country.

Dunkin´ Donuts is currently only present in 30 countries in the world, mainly in the United States, and
in several countries in North America, Asia and Europe. We decided to focus on Europe as our new
target market because we already have some general knowledge about European countries concerning
their culture and especially their food habits, due to our European origin. Throughout the research
process, we found, that Dunkin´ Donuts is not yet operating in France. France seems to us as the perfect
target market for our company because French people value baked goods, such as croissants which is
one of the products offered by Dunkin´ Donuts.

Our team aspiration is to really get to know and to understand the company we chose. We want to
develop a well-working expansion strategy for Dunkin´ Donuts, by constantly putting effort into our
individual work and teamwork. This course allows us to combine all the knowledge we gained
throughout this study into one project. Besides that, we hope to gain a new overall perspective on what
it actually means to operate in today’s world as a global company.

Due to Covid-19 we heavily depend on virtual communication. We created a WhatsApp group which
provides us a good base to ask simple questions and to organize our next steps. To communicate about
specific topics in-depth, we use Zoom meetings which makes it easier for us as a group to facilitate
discussions to improve our final result.

Finally, to be prepared for potential challenges we decided to communicate problems directly when they
occur to be able to solve them quickly. If a team member gets sick and is not able to participate in
teamwork for a few days, the rest of the group will have to work harder to compensate the shortage. The
person that is sick will then in return work slightly more after their recovery so that everyone has
somehow an equivalent amount of work. To avoid free-riding, it is important for us as a group to remind
each other that we are a team and that we all have to put the same effort into the project in order to be
productive and efficient. If someone does free-ride, all team members should feel free to speak up and
to solve the issue through respectful communication.
 1. Introduction

In the 1950 William Rosenberg saw in Massachusetts that people enjoyed dipping their donuts in coffee.
This delicious combination became a delightful experience, and people kept wanting more. Influenced
by this phenomenon, Rosenberg made it his goal to deliver the highest quality coffee he could find. This
brought his small company to a whole new stage and this is how Dunkin’ Donuts was founded. Currently
the company is operating in more than 33 countries around the world, it has 11 000 restaurants and it
daily serves more than 5 million customers (Dunkin' Donuts, 2020).

First, this paper is going to present the tangible and intangible assets that the company possesses.
Second, it is going to apply the VRIO framework on some of the company resources and capabilities.
Third, the paper is going to benchmark some of its key resources and capabilities against some of its
competitors. After that it is going to conclude with which capabilities and resources the company is
gaining competitive advantage. Finally, the paper will see if Dunkin’ is acting in a corporate socially
responsible way.

2. Tangible and intangible assets

Tangible assets are easily observable and quantifiable, while intangible assets are hard to observe and
most of the times difficult to quantify. They can be both be easily found on the company’s balance sheet
(Peng & Meyer, 2019). According to the most recent information, the total assets of Dunkin’ Donuts is
3.829 billion. Compared to last years results the company has enjoyed an 1.68% increase. Even though
intangible assets are hard to measure, they were estimated together with the goodwill of the company at
2.182 billion, but compared with previous years Dunkin’ are experiencing overall a small, but noticeable
decline (Macrotrends, 2020). The one of the key resources that the company possesses is its strong and
valued brand name, known all around the world, which will give them an early head star and lead the to
a major success in the highly profitable market of France. Before entering France, the company can
consider the idea of acquiring the ability of producing croissants, so that it can be more appealing to the
local people. Not only the idea of the croissants should be kept in mind, but Dunkin’ also need to closely
analyse the market and the competition.

3. VRIO framework
The VRIO framework is a resource-based framework that helps the company to see if its resources or
capabilities are gaining a competitive advantage over the competitors. A given resource or capability
needs to be valuable, rare, inimitable, and organized so that it can lead to a sustainable competitive
advantage (Peng & Meyer, 2019). One of Dunkin’ Donuts key capabilities is that they sell coffee to the
“Average American”. This coffee is considered to be valuable, rare, and organised to exploit, but
unfortunately it is not inimitable. Thus, this capability only realises temporary competitive advantage
for Dunkin’ . Another key capability of the company is its their convenient drive-thru services. They are
valuable, rare, inimitable and organised to be exploit, which suggest that the company is enjoying a
sustained competitive advantage (Starbucks and Dunkin Donuts, 2019). Franchises can be considered
as a key resource for Dunkin’. They are valuable, rare, organised to exploit, but it are not inimitable,
which leads the company to have realised temporary competitive advantage (The Quick Service Coffee
Industry: SAR Final Report, 2019). Another key resource that Dunkin’ Donuts possesses is its big social
platforms on which it could easily advertise its products. This resource is valuable, rare, and organised
to exploit, but unfortunately for the company it is imitable, which leads to a realised temporary
competitive advantage for Dunkin’.

4. Benchmarking

Benchmarking is a really important analytical tool that can help the company see its weaknesses and
potential opportunities for the compared resources or capabilities. In general, it compares the firms key
resources and/or capabilities to the ones of the rival company, so that the firm can clearly see where is
left behind and where is dominating (Peng & Meyer, 2019) .If to be compared the drive-true and the
coffees of Dunkin’ Donuts to these of Starbucks and Costa Coffee, which are their main rivals, it is
going to be visible that the company has a slight advantage over its competitors. The convenient drive-
trues are outperforming those of its competitors because they have simply more and well-developed
drive-trues than its competitors. A slight advantage is gained also from their coffees, because they sell
on more affordable prices than Starbucks and Costa Coffee. Looking at these companies’ social
platforms, which are a key resource, it is visible that Starbucks have a big advantage since they have the
most followers on all platforms, Dunkin’ come second and Costa are third with not that well-developed
social platforms. Finally, when a key resource as franchises is compared Dunkin’ enjoys a competitive
advantage since it has the most franchises around the world.

5. Key capabilities and resources

According to Peng & Meyer, 2019, even if the firm possesses a lot of tangible and intangible assets they
let alone won’t lead to competitive advantage without the help of core capabilities, which are the
company’s special abilities to use resources so that the company goal can be reached. Capabilities are
often hard to estimate and difficult to quantify, but they must be “there” so that the firm can generate
competitive advantage not only by relying on its resources. Dunkin’ in general have a lot of capabilities
and resources, but only few can lead the company to competitive advantage. As mentioned above in
the paper Dunkin’ Donuts enjoy mostly a temporarily competitive advantage thanks to its franchises,
social media platforms, and its coffees. However, the company can enjoy its sustained competitive
advantage because of its convenient drive-thru.

6. Corporate Social Responsibility

Corporate Social Responsibility (CSR), which is defined as the consideration and reaction of businesses
to problems outside the firm's limited fiscal, technological and legal requirements to obtain social
benefits along with the company's typical economic gains. Most of todays companies act in CSR way
voluntarily, because they gain lots of different benefits like brand reputation, higher profits in some
cases and loyal customers (Peng & Meyer, 2019). Dunkin 'Donuts found that even limited quantities of
palm oil can irresponsibly contribute to climate change as a result of deforestation, the loss of
endangered species' natural habitats, and other environmental and social concerns, including human
rights violations. Since 2014 the company is following strict guidelines about the usage of palm oil and
tries to present this major problem and its importance to its shareholders and main suppliers (Dunkin'
Donuts, 2017). Despite the fact that the company does not have, raise, process, and transports livestock
they realise that animal welfare is an important part of a successful supply chain and that is way Dunkin’
is trying to communicate this process to all of its shareholders and suppliers, since 2012 (Dunkin'
Donuts, 2020).

7. Conclusion

Dunkin’ Donuts can rely on their key capabilities and resources to be successful in their expansion to
new markets that they do not operate. Their strong brand name, convenient drive-thru, and big social
platform can be of use in the expansion. The company is also socially responsible to the environment
and its shareholders since they follow strict guidelines and rules, which is going also to be helpful.
Refferences

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The Quick Service Coffee Industry: SAR Final Report. (5 May 2019 r.). VRIO analysis. Извлечено от
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