Dunkin Donuts PESTLE Analysis

Published in Companies category by MBA Skool Team

Dunkin Donuts PESTLE (or PESTEL) Analysis assesses the brand on its business tactics across various parameters. PESTLE Analysis of Dunkin Donuts examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. Let us start the Dunkin Donuts PESTLE Analysis:

Political Factors:

The political factors in the Dunkin Donuts PESTLE Analysis can be explained as follows:

Dunkin Donuts is a big brand having several retail outlets spread across the world. It is said that if you make government happy, then government will make you happy. So, Dunkin Donuts spend million of dollars for lobbying with government to create the positive image of the company. Dunkin Donuts is alleged to have donated a huge amount to democrats during recent elections.

It is a very risky move as the customers who support republicans and share their ideologies and values may not like the companies towards the democratic party and may altogether boycott the Dunkin Donuts product. Environmentalists are also pressuring the government to impose restriction on the consumption of meat as they said that meat consumption is causing a great damage to the environment. Specially in India, the demand for making the vegetarian food is growing.

Image: pixabay

Economic Factors:

Below are the economic factors in the PESTLE Analysis of Dunkin Donuts:

Dunkin Donuts’ business is driven by several economic parameters. The GDP, per capita income, inflation and purchasing power parity of a country are very important factors which can affect the business of any company.

The sales forecast in the American market is not very optimistic as people are getting more conscious about their health now. The rising income of the people in Asian countries has created a lot of opportunity for the Dunkin Donuts at a time when the domestic sales is stagnating. Specially China and India are providing a great opportunity for the company to expand its business as these both countries are the world’s fastest economy and with the rise of income in these countries, the eating preference is changing among people which will positively affect the country.

Social Factors:

Following are the social factors impacting Dunkin Donuts PESTLE Analysis:

Dunkin Donuts thrives of reaching out to societies & people looking to celebrate a occasion. Companies are rapidly changing the eating preferences of the customers by making them consume more snacks and ready to eat foods. In developing countries like China and India, where 20 years back only traditional foods were considered good, are changing their preferences rapidly and now they more and more consuming snacks and fast foods. India provides a great opportunity for the company as 60 % of the population of India which is roughly around whopping 70 crore is under age of 35 years. Dunkin Donuts company can easily wow these age group by introducing different products specifically catering to their preferences. One problem that is arising that many people nowadays are becoming more and more conscious about their health and they view these fast foods and snack detrimental to their health.

Technological Factors:

The technological factors in the PESTLE Analysis of Dunkin Donuts are mentioned below:

Dunkin Donuts is a frontrunner in technological advancement. In a move which will benefit the company in a significant way, it has entered into the multi-year contract with Cardfree inc under which the company will get perpetual license to CardsFree’s software that has been used to build and operate the quick-service restaurant chain mobile ordering and payment platform.

The company is also testing Dunkin Donuts Innovation Lab where it is testing out products like self-serve cold brew taps, order pickup lockers, brand new espresso machines and focus on mobile ordering and pickup.

Following are the legal factors in the Dunkin Donuts PESTLE Analysis:

Dunkin Donuts works on a franchisee model all over the world. The model of franchising is very complex which involves dealing with and adhering to local laws which are different for different countries. Franchisee model is known to generate a lot of conflict between the two parties over the functioning, pricing and profit sharing. Moreover, Dunkin Donuts need to focus on whether the countries in which it wants to operate gives protection to intellectual property rights or not. If the country doesn’t protect the intellectual property rights, then the company can lose a lot of money to the company who just copy its model and any trademark and patents.

Environmental Factors:

In the Dunkin Donuts PESTLE Analysis, the environmental elements affecting its business are as below:

When nearly every major companies are making great progress towards sustainability, how Dunkin Donuts can fall behind. Dunkin donut is vigorously making great strides to make the environment more sustainable. It has planned to phase out polystyrene foam cups from 2018 to completely eliminate it from its supply chain by 2020. The Company is now using the double walled paper cups which is more environment friendly and cost saving.

The company has transitioned completely to bagel bags made with 100% recycled paper which can save up to 20 million pounds of paper every year. It is also helping its franchisees to build sustainable and, energy-efficient restaurants in the US. There are more than 340 Dunkin Donuts green achievement restaurants in US and company is planning to open 500 more stores by 2020.

To conclude, the above Dunkin Donuts PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.

This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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