Question

Is the new strategy likely to be effective in increasing customers? retaining customers? or both - why? will the new strategy likely position Dunkin better or worse against Starbucks - why was the change a good move on the part of Dunkin? Why?

Answer 1

a. Dunkin recent strategy is reducing the varieties of Donuts in the menu and increasing the flavors of Coffee in its menu. It is putting more emphasis on coffee and also planning to remove "Donuts" from its brand name. The new strategy will help in increasing customers mainly the coffee lovers will surely increase as earlier the brand was offering fewer choices in coffee. It will also help in retaining the old customers as reducing the varieties of donuts will only increase quality and not hamper taste. Thus, it will help in retaining its old customers.

b. This is hard to say initially but surely in the long run it will position Dunkin better as the new strategy will increase variety of coffee and make the donuts variety more refined. Thus, it will position Dunkin better than Starbucks in the long run.

c. Yes, diversification is always a good move. Concentrating on coffee will help in increasing the number of customers coming to the outlets and thus it is good move on behalf of Dunkin.