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Starbucks Versus Dunkin’: Business Models Compared


Starbucks Corp. (SBUX) and Dunkin’ Brands Group Inc. (DNKN) are the two largest eatery chains in the United States that specialize in coffee. While both companies maintain similar menus and overall strategies, there are key differences in their business models related to scale, store ownership and branding.

Despite being founded 20 years after Dunkin’ Donuts, Starbucks grew aggressively and is a substantially larger company. In FY 2017, Starbucks generated over $22 billion in revenue while Dunkin’ Brands reported sales of more than $860 million. Starbucks has a larger footprint, with some 28,209 locations worldwide, compared to Dunkin’ Brands’ more than 20,500 points of distribution across the globe.

At the national level, Starbucks leads with about 14,000 locations compared to the nearly 9,200 Dunkin’ Donuts locations in the U.S. Starbucks plans to open another 3,400 stores in the U.S. by 2021 and double down on markets such as China, while Dunkin’ plans to open 1,000 net new stores by the end of 2020. Starbucks has expanded beyond the U.S. more extensively, with 27,339 locations in 75 different countries, as of the end of 2017. Dunkin’ Brands has a substantial international presence, though many of its international locations are Baskin-Robbins ice cream stores rather than Dunkin’ Donuts stores. While only 3,397 Dunkin’ Donuts stores exist outside the U.S., the company boasts 5,422 international Baskin-Robbins locations, compared to its 2,560 U.S. stores.

Dunkin’ Donuts international revenue in Q1 2018 of $5.4 million contributed less than 4% of total sales, which came in at $139.9 million. Roughly 30% of Starbucks’ consolidated net revenues of $6 billion in the most recent period ended April 1 were attributed to markets outside of the Americas. Dunkin’ has announced aggressive international and domestic expansion plans with the hope of challenging its main competitor’s footprint, but the difference in scale stems from variations in expansion strategy.


Franchising


Focus and Branding


Quality


Financials


Changes in Leadership



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