April 10, 2006

Dunkin' Donuts vs. Starbucks: a battle of the coffee tribes

In the weekend edition of the Wall Street Journal, Janet Adamy took a closer look at the upcoming change in strategy at "no frills" coffee chain Dunkin' Donuts, which has spent quite a bit of time studying the Starbucks business model before deciding what to keep and what to change. On Monday, Dunkin' Donuts is kicking off a new advertising campaign to "rebrand the chain as a quick but appealing alternative to specialty coffee shops and fast-food chains." The ultimate goal, of course, is to "make its largely East Coast coffee chain into a national powerhouse that's as synonymous with coffee as Starbucks, the nation's largest coffee chain." According to the chief innovation and creativity officer at Dunkin' Donuts, the company might even consider dropping the word "donut" from its signs as it pursues a slightly different demographic.

What's interesting is that Dunkin' Donuts took an ethnographic approach to its strategic makeover, deploying a customer research team to study the habits and attributes of those frequenting both Dunkin' Donuts and Starbucks. The company even paid participants $100 to make the switch from Starbucks to Dunkin' Donuts and from Dunkin' Donuts to Starbucks, to see what patterns emerged. The result, says the Wall Street Journal, was a clearly-drawn picture of two vastly different "tribes," each with their own strongly-held views of what a coffee shop should be.

So what does Dunkin' Donuts plan to change? Well, let's just say that a prototype Dunkin' Donuts store in Euclid, Ohio (near Cleveland) features a few Starbucks-like features: a rounded granite-style coffee bar, where workers make espresso drinks face-to-face with customers, as well as sleek chairs and plenty of muted earth tones instead of garish pinks and oranges. There's also plenty of fresh yogurts and dainty little fruit cups and a "carefully orchestrated pop-music soundtrack piped throughout the store." However, there are several Starbucks features that Dunkin' Donuts does not plan to emulate. For example, the company found that its customers prefer big, hearty "stuffed melts" instead of panini. In addition, there are no plans to add couches or wireless Internet access to its stores. As well, a "large" coffee will remain a "large" and not become a "venti" or "grande" or anything else.

Tags: DunkinDonuts Starbucks coffee

[image: Cup of Coffee at Dunkin' Donuts]

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February 21, 2006

Innovation smackdown: MIT vs. Harvard

For any MBA graduate or long-time business practitioner, the Harvard Business Review is often considered the touchstone of business excellence. By comparison, the MIT Sloan Management Review languishes in relative obscurity, eclipsed by its better-known sister publication, the MIT Technology Review. While doing a routine "business innovation" search on Yahoo!, I noticed that both the Harvard Business Review and the MIT Sloan Management Review were purchasing sponsored search links, so I thought it might be interesting to see how the two publications stack up in terms of business innovation articles, especially since MIT and Harvard are blood rivals capable of some mean-spirited pranks located just across the river from each other in Cambridge. If this were a Friday night WWE Smackdown and these two schools were professional wrestlers, can you imagine the mayhem that would result by putting the Harvard Business Review and the MIT Sloan Management Review in the same ring together?

Somewhat surprisingly, the quality and depth of the business innovation thinking in the MIT publication surpassed that of the Harvard publication...

Business innovation articles in the current issue of the MIT Sloan Management Review: (1) Improving capabilities through industry peer neworks (2) Capturing the real value of innovation tools (3) Creating new markets through service innovation and (4) Reducing the risks of new product development.

Business innovation articles in the current issue of the Harvard Business Review: (1) The Why, What and How of Management Innovation by Gary Hamel and (2) Breakthrough Ideas for 2006.

The winner of this innovation smackdown by an easy margin: The MIT Sloan Management Review.

Tags: MIT Harvard innovation smackdown

[image: World Wrestling Entertainment: SmackDown]

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