Introduction is one growth strategy, entering new markets and

Introduction

By conducting the framework, the RT has established a wide overview of
competition within the environment. This information determents to what extend
“Dunkin Brands” is profitable compared to other firms within the industry. The
framework consists out of 5 elements covering each another aspect of
competition (Competition, 2017).

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Competitive rivalry

Indirect Competition

Indirect competition, also known as substitutes is
related to organizations seeking to fulfill the same need as ‘DD’ but offering
a different product or service. These indirect competitors might shift into
direct competition as well it can help structure new ideas and create new
opportunities for the organization (BusinessDictionary.com, 2017).

Subway

The subway is one of the largest fast-food chains in the world as they have
10% of the total market share, owning 45.000 + firms operating in more than 120+
countries world-wide (GroundTruth Website, 2017). They offer wide variety of
freshly baked sandwiches that can be personalized up to your preferences.
Nonetheless, firms do offer Cookies, chips, coffee and chocolate can be ordered
as additions. Nonetheless Subway is competing with large chains by offering
breakfast-items in order to increase sales volume and puts pressure on
organizations operating within the fast food industry (Theseus.fi, 2017). Nonetheless,
subway creates a sustainable competitive advantage by focusing on healthy diet,
and nutrition as well enhancing quality and taste of their products.

Burger King

Burger-king is currently the fourth largest quick-service-restaurant in the
world owning 9% of the total market share (GroundTruth Website, 2017). They
have 2 strategies that gives burger king a great competitive advantage. Market
development is one growth strategy, entering new markets and targeting new
market segments by offering products for a low price. However, this strategy is
their secondary priority as they already have penetrated the market around the
world with their many locations. Therefore, their primary goal is to grow
business throughout introducing new products in order to compete with other
firms (Gregory, 2017).

Mc Donald’s

Mc Donald’s (MD) is the leading QSR worldwide focussing on being the finest
fast food chain in the world retaining 32% of the total market (GroundTruth
Website, 2017). Their aim is to produce food as fast as possible with a low
competitive price and high-quality service. MD serves products fitting the
culture of the region they are operating in. Nonetheless, burger sales rose by
3% as coffee sales by rose by 10% since last year since the introducing of
their all-day breakfast menu and therefore became Dunkin’s largest threat (Marketrealist.com,
2017). Additionally, the biggest
achievement of MD is the image they have created among customers; ‘name’, ‘brand’ as well hygiene cautions are the 3 factors to attract
new customers (UKEssays, 2017).

Direct Competition

Direct competition is related to organizations that have a dissimilar advantage
within the environment. They are a direct threat for the firm as they are
offering the same product or service (SCA News, 2017).

Mc Donald’s – Mc Café

Mc Donald’s reintroduced the Mc
café concept since 2017 and has expanded in the US and Europe and offers
products such as; Americanos, espresso shots and pastries baked-in-house. It is
the goal of Mc Donald’s to “become the #1 place where everyone gets their
coffee”. The Mc Cafe designed their products with bright colors on brown paper
bags for a “simple and fresh look” to help it compete against new hipster
/ trendy coffee companies (Whitten, 2017). Nonetheless, the fast food chain has
led their focus on resourcing their coffee beans from sustainable farmers and
their goal is to have 100% sustainably sourced beans by 2020. Moreover, investments
in new equipment for their coffee machines gives firms advantage by delivering
a wider variety of coffee’s. Nonetheless, the organization will use pricing as
their main key advantage in order to compete with Dunkin Donuts and Starbucks
as they will offer regular coffee for $1 dollar and specialty-coffees for $2
dollar (Money, 2017). Mc Donald’s is focusing on expanding the Mc Café concept
in the US to compete with large chains, however, Mc Donald’s has already
sustained their coffee popularity among the UK and rest of Europe (Alexander,
2017).

Starbucks

Starbucks is currently having the largest market share regarding coffee sales
compared to Dunking Donuts and Mc Donald’s and is much likely to maintain its
competitive advantage due to the wide variety of premium products they offer.
This makes competitive advantage with Dunkin Donuts more moderate as they set themselves
apart more ‘exclusively’ (Scholar.harvard.edu, 2017). Moreover, Starbucks
generates 75 percent of its revenue from coffee sales and generates revenue
from selling whole bean coffee and merchandises through supermarkets and online
sales. Starbucks offers selected food service outlets the chance to sell
Starbucks coffee and other related products in order to give bring the
“Starbucks” experience closer to its consumers and new area’s (Smallbusiness.chron.com,
2017). Moreover, food sales have grown by 40% since last year. This is due to
the fact that Starbucks attracts customers through their mobile app, posing
discounts for its breakfast offers that includes; bistro boxes, breakfast
sandwiches, and oatmeal. This incentive has led to repeating business.

Private owned coffee shops

The coffee industry has become a high repeating and high referral business and
smaller private owned coffee shops find their way to compete this market.
“Craft” trends in the food & beverage industry have become popular within
the whole supply chain and become important for farmers, roasters, buyers, shop
owners and baristas as they all contribute to this trend as well competing with
larger organizations. Independent shops offer high qualitative coffee for a
reasonable price and a variety of food breakfast and lunch items that makes business
repeatedly. Most independent firms stick to the basics of coffee consumption by
offering ‘quality’ over ‘quantity and variety’ as well using products from sustainable
resources. Therefore, private owned coffee shops being direct competitors for
DD (Forbes.com, 2017) Nonetheless, the market increasingly bargains options
that adds value for suppliers such as product differentiation and certification
for more exclusive and special high-quality products or solitary origin coffee
beans. This expands opportunities for suppliers and adds potential value for
firms in order to compete within the market (Cbi.eu, 2017).

JAB Beech & Coffee Holdings-company

Jab holding is a large privately held investment group that holds several brands
focusing on offering breakfast and coffee for their target market. These brands
named; Keurig Green Mountain, Krispy
Kreme Doughnuts, Panera Bread, Caribou Coffee and bagel and Peets’s coffee,
Balzac, espresso house & baresso competing together against large chains.
This interdependent position of different brands gives ‘Jab holding’ a great
competitive advantage against large brands as they position themselves on the
market by setting out a very strong competitive based strategy such as product
differentiation and expansion of franchises in emerging economies as well
selling coffee throughout retailers (Economics-files.pomona.edu, 2017). The aim
of the group is to hold as many breakfast / coffee oriented businesses offering
a wide variety of coffees and sweets in order to make their position within the
market as strong as possible (Firkser, 2017).

Conclusion:

Analyzing direct competition, above described quick-service-restaurants meet consumer
expectations as they are seeking for on-the-go, cost-effective, healthy food
options for breakfast. This need creates a new market for organization as they
now competing with each other on selling breakfast that includes sweets and
coffee in order to boost revenue (GroundTruth Website, 2017).

 

 

 

 

 

 

 

 

 

COMPANIES
 

Mc Donald’s / Mc Café Coffee

Starbucks

JAB Holdings

Private owned coffee shops

BRANDS
 

3

6

9

PROPERTIES

APX. 36,900

 APX. 27,340

APX. 10,000

APX. –

GEOGRAPHIC REACH

Middle
east, Africa, Latin American, Asia Pacific, Europe, North/South America 

Middle
east, Latin American, Asia Pacific, Europe, North/South America 

Middle
east, Latin American, Asia Pacific, North/South America 

Middle
east, sout-Africa, Latin American, Asia Pacific, Europe, North America

GEOGRAPHIC DENSITY

Urban / rural

Urban /
rural

Urban / rural

Urban /
rural

TARGET GROUP
 

Students,
employees, professionals

Students,
Young couple, Employees, professionals

Students,
Young couple, Employees, professionals

Students,
Young couple, Employees, professionals

DIFFERENTATION STRATEGY
 

“Power of franchisees,
suppliers and employees working together toward a common goal being world’s
leading quick-service restaurant brand”

Offering
‘third-place’ experience

Coffee of the highest quality

International market expansion with the focus on emerging economies

Integrating technology

Product
differentiation

Expansion through franchises

Sustainable sourced coffee

Consumer coffee products

Quality
above all

Using authentic brewing methods

“home away from home” environment

Less touristic locations / main street locations

OWNERSHIP
 

Franchising

Franchising

Franchising

Privately
owned

(Corporate.mcdonalds.com, 2017)
(Fortune, 2017)
(Yanofsky, 2017)
(Dudovskiy, 2017)

 

THREAT OF SUBSTITUTE PRODUCTS OR SERVICES

Caffeinated
alternatives
The primary substitute product of coffee drinks that is posing a threat towards
firms operating within the QSR industry are caffeinated soft drinks offered by
Albert Heijn –To-Go, Kiosks and other shops that offers snacks and drinks (UKEssays,
2017). However, this threat has become slightly insignificant since consumer
preference tend to focus on ‘healthy alternative’ caffeinated drinks like coffee
due to the health concerns associated with carbonated soft drinks. However,
soft drink organizations offering ‘sugar-free’ / ‘dietary’ drinks in order to
boost revenue and compete within the drink industry (Ibid, 2017).

In-home consumption
According to NCDT, 54 percent of all people 35+ makes coffee at home (The First
Pull, 2017). This segment has taken a rapid growth and have become a very
popular and diverse market. The consumer market has a wide variety of coffee machines
and coffee types such as; qualities (standard / speciality coffees), origins,
blends and product types (whole beans, ground beans, capsules, pods, coffee
extract and instant coffee. These different types of products create new authentic
marketing strategies for organizations and boosts in-home coffee consumption (Cbi.eu,
2017).

Speciality coffee
According to SCA, the
majority of people 59%, chooses speciality coffee over non-speciality (Forbes.com,
2017). Many international coffee-brands see smaller national firms entering the
coffee industry, offering consumers speciality coffee with the highest ‘SCAA’
degree and therefore competing directly with the large international chains and
is seen as a substitute product (Longbottomcoffee.com, 2017). The coffee market
can be distinguished among two sub-categories; bulk and specialty coffee. The QSR
market is highly competitive and giant coffee chains own 70% of the market by focusing
on ‘bulk’ supply. The other 30% is dominated by smaller organizations focusing on
‘specialty’ coffee such as ‘green coffee traders’, ‘local roasters’ and ‘privately
owned coffee houses’ (Cbi.eu, 2017). The increasing interest in specialty coffee
has led to a developing industry operated by new privately-owned coffee bars, micro
roasters, local brands and baristas. These substitutes speciality coffees have
become a threat to larger chains since more consumers is willing to pay higher
prices for high-quality coffee that is sources from sustainable resources and therefore
firms adapt to this new consumer behavior (Ibid, 2017).

Fruit / vegetable Smoothies and nutrition bars
Fruit/vegetable juices are perceived as more healthy than other sugar-laden
products and represent a comparatively value-priced alternative to other types
of snacks, drinks and even meal replacements (Nestlé Professional, 2017). Moreover,
smoothies are easily adapted to consumer preferences with add-on ingredients. This
can be a strategic choice for firms to differentiate and generate revenue (Nestlé
Professional, 2017). Additionally, bars and  

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