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Dunkin Donuts C Growth Strategy Case Solution

Solution Id Length Case Author Case Publisher
2379 1005 Words (5 Pages) Hirotaka Takeuchi Harvard Business School : 584041
This solution includes: A Word File A Word File

William Rosenberg started the first Dunkin Donuts shop on a pavement in the year 1950. With his great sense of business acumen and the quality of products, he was able to expand it and numerous shops were launched in 1968 when Dunkin Donuts went public. And Dunkin Donuts has seen exponential growth since 1973, with café-styled shops and exuberant themes. But, with great growth, the company faced some grave troubles because of growing “too quickly”.

Following questions are answered in this case study solution

  1. Background

  2. Decision problem facing and its importance

  3. Criteria for Evaluation

  4. Options and their evaluations 

  5. Evaluation Matrix

  6. Analysis and Recommendations

Case Analysis for Dunkin Donuts C Growth Strategy Case Solution

2. Decision problem facing and its importance

So, the company had decided to make some major changes in its strategies. For instance, some of the operations were centralized for the improved decision-making process, a new department was established to look after the newly launched shops and their development progress, the financials were all consolidated in a single balance sheet which was catered by the central divisions, more communication and ideas were shared between the top management and franchise owners to counter the problems, and the management had turned its objective from opening more new shops to focusing on improving the revenue in its current shops with better promotional marketing and with the introduction of new eateries. 

3. Criteria for Evaluation

Rosenberg had proposed different opportunities for the successful expansion. But it is important that each alternative should be evaluated based on costs involved, how much time would be required to achieve the targets needed and will that be a longer term solution.

4. Options and their evaluations 

Firstly, should the new shops opened would be operated and possessed by the company itself or would rather operate as franchises. Dunkin wanted to open the new shops at an accelerating rate to counter the competitive stresses imposed by Mister Donut. If the stores were company-owned, these could be looked after quite easily, the strategies could be implemented much effectively, novel products or pilot runs could be done effortlessly, and fewer legal issues were faced as compared to operating a franchise. However, there were some implications too, like higher bank financing required for the projects and other expansions. There were also problems of employees leaving the company too early and demotivation amongst existing workers as internal promotions were quite limited. Also, the financial objectives were not yet met by these shops as they were in the initial stages of their development.

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