The case (others might call it an article) "Dunkin' Donuts Heads Back to Russia" is good.
Charles Wankel, IMD-L list director
EXCERPT:
After a retreat from Russia in 1999, Dunkin' Donuts is returning Wednesday with the first of 20 planned store openings in Moscow this year.
The move by the Dunkin' Brands Inc. unit will intensify a battle among coffee-shop chains in Russia, a tea-steeped culture that is fast getting hooked on coffee.
....
Dunkin' Donuts intends to open 20 stores in Moscow this year.
Dunkin' is hoping to match the success of rival Starbucks Corp. of Seattle. Less than three years after opening its first store in Russia, Starbucks boasts 31 locations whose sales make it the third-largest coffee-shop chain in the country, behind an operation called Coffee House and the market leader, Shokoladnitsa, Euromonitor International says. In fourth place is McDonald's Corp.'s McCafé unit, according to Euromonitor.
The planned store openings come 11 years after Dunkin' Donuts pulled out of Russia, following three years of losses exacerbated by a rogue franchisee who sold liquor and meat pies alongside coffee and crullers.
....
"There's a growing middle class in Russia, a strong movement toward American brands and a relative lack of competition," Mr. Travis said during an interview.
But do Russians like doughnuts? That question would be less relevant in the U.S., where coffee accounts for about 60% of Dunkin' sales. But in Russia, Mr. Travis expects beverage sales initially to account for less than 30% of the total, largely because in international markets, Dunkin' serves fewer customers in the morning than in the afternoon.
Doughnuts are a dish largely unknown to Russians. "The doughnut? Russians either don't know what it is or think it is too sweet," says Ivan Pentchoukov, a native Russian who opened a New York grocery and bakery called Moscow on the Hudson after immigrating a decade ago.
Mr. Travis says Dunkin' has studied local tastes and concocted several items expressly to appeal to Russians. "Without giving away too much, we've found that they favor something called scalded cream and a very nice raspberry jam as a pastry filling," he says.
Dunkin' Brands already ranks as a dessert purveyor in Russia. Its Baskin-Robbins ice-cream chain boasts 143 shops there, making it the No. 2 Western restaurant brand by number of stores behind hamburger chain McDonald's Corp., Dunkin' says. Its Baskin-Robbins partner in Russia is unrelated to its new Dunkin' Donuts partner in Russia, Mr. Travis says.
From the April 27, 2010, issue of the Wall Street Journal.
http://online.wsj.com/article/SB10001424052748704464704575208320044839374.html
Journal-in-Education study questions on it:
TOPICS: Franchises, International Marketing
SUMMARY: Dunkin' Donuts is returning to Russia with the first of 20 planned store openings in Moscow this year. Dunkin' has studied local tastes and concocted several items expressly to appeal to Russians.
CLASSROOM APPLICATION: This article provides an opportunity for students to learn about franchising and international marketing in the same context. One idea for an activity is to ask students to assume the role of a product manager for Dunkin' Donuts whose job is to study the Russian consumer to determine what types of products should be developed and sold in Russian Dunkin' Donuts. What resources should this person do before they travel to Russia, and what should they do while they are in Russia to gather additional information? Challenge students to be specific with their recommendations. The other issue to cover is franchising. Once you're certain that students really understand how the franchising business model works, challenge them to explain the relative advantages and disadvantages of franchises as the business model for expanding into an international market.
QUESTIONS:
1. (Introductory) What are some reasons why Dunkin' Donuts has chosen to return to Russia? Why did Dunkin' Donuts fail in its earlier attempt to establish a business in Russia?
2. (Introductory) What are some of the differences between the Russian market and the U.S. market that are relevant for a firm like Dunkin' Donuts? How would you expect the firm to adapt to these differences?
3. (Advanced) The article suggests that Russian's taste for donuts and coffee drinking habits are different from the U.S. What research would you recommend for the company to identify what Russian consumers really want?
4. (Advanced) Besides Dunkin' Donuts, what other franchises do you think should pursue the Russian market at this time? Why?
By: Brian Tietje, California Polytechnic State University
WSJ professor program (free emails during the academic of articles for class discussion with questions etc. for several subject areas):
http://info.wsj.com/professor/new/