Selective Partnerships Dunkin' Donuts is banking on strategic partnerships to help fuel growth. But "selectivity" rules the partnership decisions. Although it often partners with grocery retailers to create a store-within-a-store concept, the company is very choosy about where it sets up shop. "We want to be situated in supermarkets that provide a superior overall customer experience," says a Dunkin' business developer. "Of course, we also want to ensure that the supermarket is large enough to allow us to provide the full expression of our brand . . . which includes hot and iced coffee, our line of high- quality espresso beverages, donuts, bagels, muffins, and even our breakfast sandwiches." Furthermore, the outlet's location within the supermarket is critical for a successful relationship. "We want to be accessible and visible to customers, because we feel that gives us the best chance to increase incremental traffic and help the supermarket to enhance their overall performance." Finding the Sweet Spot If Dunkin' Donuts can find the "sweet spot" by being within most consumers' reach without creating the feel of a mass retail-like presence, the company's growth strategy may be successful. But this strategy has risks. Offering too many original products in too many locations could dilute essential brand appeal and alienate longtime customers who respect its history of simplicity. Potential new customers and a younger demographic might view Dunkin' Donuts as an uncool yesterday's brand." Then, too, some older franchises seem long overdue for a makeover, especially when compared to the trendy Italian feel of a nearby Starbucks cafe. In a move aimed directly at a core Starbucks market, Dunkin' Brands recently reported that it is partnering with Coca-cola to launch a complete line of chilled coffee beverages in its U.S. markets in 2017. Starbucks currently has an 80% share of this lucrative category, and the move into the $1.5-billion, ready-to-drink coffee market is Dunkin' Donuts's attempt to crack this space. The donut company's iced coffees will be distributed in grocery stores by Coca-cola. Case Analysis Questions 1. DISCUSSION What does Porter's Five Forces analysis suggest about the attractiveness of competing in the same industry as Starbucks? What are the strategic implications for Dunkin' Donuts? 2. PROBLEM SOLVING Complete an up-to-date SWOT analysis for Dunkin' Donuts. If you were the CEO of the firm, what would you consider to be the strategic management implications of this SWOT analysis, and why