B.

OPERATING ENVIRONMENT
B.1 OPPORTUNITIES
B.1.1. Rivalry Among Competing Firms
 Amidst competition, Dunkin' can analyze the market deeply to find gaps or unmet needs.
This helps guide product development to create unique offerings that set Dunkin' apart
from competitors.
 Dunkin' can use competitors' products as benchmarks for comparison, allowing them to
identify areas where they can improve or innovate to offer superior products
B.1.2. Potential Entrants
 New competitors can push Dunkin' to create new products, making their menu more
diverse and appealing.
 Dunkin' can work with new entrants to develop innovative products and reach more
customers through partnerships.
B.1.3. Substitute Products
 Substitute products like soy coffee and other grain-based coffee, or whole grain pastries
can be added to the menu as an alternative coffee option.
B.1.4. Bargaining Power of Suppliers
 Arabica coffee beans are priced lower than Robusta beans, and Dunkin Donuts
exclusively uses 100% Arabica beans. Dunkin' mitigates coffee price fluctuations by
hedging with farmers.
 An agreement has been established with Colombia, the second largest Arabica grower
in the world.
B.1.5. Bargaining Power of Buyers
 Buyers with strong bargaining power can provide valuable feedback and insights into
their preferences, allowing Dunkin' to tailor its product development efforts to meet
customer demands more effectively
B.1.6. Industry Growth
 With more demand, Dunkin' can enter new markets and create products that match local
tastes. This might mean adding regional flavors or items that appeal to different types of
customers.
 As the industry grows, Dunkin' can buy ingredients and make products in larger
quantities, which saves money. This extra resources can then be used to improve
existing products, create new ones, or offer a wider variety of items on the menu
B.2. THREATS
B.2.1. Rivalry Among Competing Firms
 The presence of thousands of "mom-and-pop" doughnut shops, along with dominant
competitors like Krispy Kreme, Starbucks, and Tim Hortons, creates intense competition
and limits Dunkin's new product offerings.
 Competitors such as Krispy Kreme and Starbucks have aggressive expansion
strategies, which can lead to increased competition for market share and customer
loyalty, challenging Dunkin's product development efforts.
 Competitors like Starbucks are diversifying their offerings with beer, wine, and evening
menus, targeting different customer segments and potentially overshadowing Dunkin's
traditional quick-service breakfast focus. This requires Dunkin' to innovate and
differentiate its product offerings to remain competitive.
 Collaborations between competitors and other companies, such as Green Mountain
Coffee Roasters Inc. and Krispy Kreme, to widen product offerings and enhance
convenience for customers, create pressure on Dunkin' to innovate and offer unique,
appealing products to maintain relevance and attract customers.
B.2.2. Potential Entrants
 New entrants bring fresh ideas and innovations, increasing competition in the market.
This can put pressure to Dunkin product development efforts.
 New entrants may cater to evolving customer preferences or niche markets that Dunkin'
has not targeted. This can highlight gaps in Dunkin's product offerings.
B.2.3. Substitute Products
 Dunkin' may face challenges in innovating its products if substitute products already
meet customer needs effectively. This can limit Dunkin's ability to introduce unique and
compelling products that stand out in the market.
B.2.4. Bargaining Power of Suppliers
 Strong supplier bargaining power can limit Dunkin's flexibility in sourcing alternatives or
negotiating favorable terms. This reduces the company's agility in responding to market
trends or changing consumer preferences through product development.
B.2.5. Bargaining Power of Buyers
 If buyers have strong bargaining power, they can exert pressure on Dunkin to lower
prices or offer discounts. This can reduce profit margins and limit resources available for
product development.
  If buyers can easily switch to competitors or alternative products, Dunkin may need to
invest more in product differentiation and marketing to retain customers. This can
increase costs and competition for product development efforts
B.2.6. Industry Growth
 Rapid industry growth can lead to market saturation, where the market becomes
oversaturated with similar products and services. This can limit Dunkin's opportunities to
introduce new products that stand out, as customers may already have numerous
options to choose from.
 In fast-growing industries, products become outdated faster due to new tech and
changing tastes. This makes Dunkin' spend more on innovation to stay relevant, but it
also risks competitors copying their ideas, so Dunkin' needs to stay creative to keep
customers loyal.