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Acknowledgements
Any accomplishment requires the effort of many people and there are no
exceptions. The report being submitted is a result of collective effort.
Throughout the semester, our respected Instructor has given us advice and
helped us in many things regarding this particular task.
We convey our sincere gratitude to our competent instructor Mr. Fahad Zuberi.
Without his help and guidance, the making of this report would have been
impossible.
We are also thankful to Mr. Tahir Mehmood at Dunkin Donuts, without whose
cooperation, the completion of this report would have been very difficult.
Furthermore, we thank all those who cooperated with us for the research and
writing of this report.
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Executive Summary
Letter of Transmittal
Mr. Fahad Zuberi
SZABIST
SUBJECT: Submission of Management Principles Report
Respected Sir,
We are hereby submitting our analysis report on Dunkin Donuts. We sincerely
hope that you appreciate the report and the first hand material included in this
report.
This report is the semester final project of the course Management Principles
and covers the management processes of Dunkin Donuts. The primary source
of our information for this report was a questionnaire survey.
We hope appreciate this report and find it of satisfactory quality.
Yours Sincerely,
Abdul BasitNajamussaqib MehmoodMozzam Nasir AliNabeel HaroonAssad Ahmed
BBA 1E
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Executive Summary
Executive Summary
Dunkin Donuts offers a wide range of products and therefore it has a wide
management hierarchy. Its the world largest chain of coffee and baked
goods. In Pakistan its been working since 2000 and its major products are
Donuts, Coffee, Tea, Sandwiches and Drinks. It imports all its raw material
from USA.
The main goal of Dunkin Donuts is to increase customer satisfaction, to
expand sales and to get a higher share in market. Its plan is to increase the
quality of products. It always sticks to its plan and reduces the negative
effects of deviation from plan by working on it.
The analysis is also carried out using The BCG matrix at the organization. In
the organization decisions made at upper level as it is a centralized
organization. It focuses on Performance management and it monitors its
employees to get full potentials out of them. In the organization the managers
develop trusts between the employees and always work to motivate the staff.
Managers use methods of self evaluation forms to get feedback.
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Table of Contents
Table of Contents
ACKNOWLEDGEMENTS................................................................1
LETTEROF TRANSMITTAL............................................................2
EXECUTIVE SUMMARY...............................................................3
TABLEOF CONTENTS................................................................4
INTRODUCTION.......................................................................6
HISTORY.............................................................................7
HIERARCHY........................................................................10
THE PLANNING PROCESS..........................................................11
Planning......................................................................................................11
Goals and Objectives of Dunkin Donuts......................................................11
Plans...........................................................................................................12
Planning Strategy........................................................................................13
SWOT Analysis............................................................................................14
THE BCG MATRIX...............................................................16
Components of the BCG Matrix....................................................................16
Dunkin Donut BCG Matrix Analysis.............................................................19
THE ORGANIZING PROCESS.......................................................22
Organization:...............................................................................................22
THE CONTROLLING PROCESS......................................................25
Controlling:..................................................................................................25
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Table of Contents
Dunkin Donuts performance Evaluation and controlling:............................25
Quality Control:...........................................................................................25
Controlling Environmental Influences:.........................................................26
THE LEADING PROCESS...........................................................28
Leadership at Dunkin Donuts:....................................................................28
HUMAN RESOURCE MANAGEMENT:................................................30
Human Resource management at Dunkin Donuts:......................................30
Performance management..........................................................................32
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Table of Contents
IntroductionDunkin Donuts was founded in 1950 by Bill Rosenberg. It started operations in
Quincy, Massachusetts. The first franchise license was issued in 1955.
Dunkin Donuts is the worlds largest chain of coffee and baked goods. Having
52 varieties of donuts and more than a dozen coffee beverages, Dunkin
Donuts serves more than 4 million customers around the globe daily.
In 2000, Dunkin Donuts started its operation in Pakistan. It is franchised by
Phoenix Foods Ltd. in Lahore and Islamabad. Karachi operations are controlled
by IBL (International Brands Limited).Dunkin Donuts has opened around
twelve outlets in Lahore and Islamabad and around ten outlets in Karachi.
The major products provided in Pakistan by the company are Donuts, Coffee,
Tea, Sandwiches and Drinks. These products are manufactured using raw
Materials that are all imported from USA.
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History
History
In 1946, Bill Rosenberg collected $5,000 to start a small business to deliver
coffee and donuts to hungry workers at their workplaces. By 1948, Rosenberg
had opened a retail coffee and donut store
named Open Kettle. In 1950, Rosenberg
capitalized on the trend of Dunkin g and
Dunkin Donuts was born.
Next, Rosenberg thought of expanding his
business nationwide. In 1955, the first
Dunkin Donuts franchise was sold and
only ten years later, Dunkin Donuts had crossed international borders intoCanada.
By 1970, Dunkin Donuts opened its first overseas store, halfway across the
world in Japan. Today, there are over 8000 Dunkin Donuts stores in more
than 30 countries worldwide selling over 4 million donuts daily.
In 2000, Dunkin Donuts started its operation in Pakistan. It is franchised by
Phoenix Foods Ltd. in Lahore and Islamabad. Karachi operations are controlled
by IBL (International Brands Limited).Dunkin Donuts has opened around
twelve outlets in Lahore and Islamabad and around ten outlets in Karachi.
Figure 1: First Shop of DunkinDonuts
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History
1946 Bill Rosenberg invested $5,000 to start Industrial Luncheon
Services
1948 Bill Rosenberg opened a donut shop named Open Kettle
in Quincy, Massachusetts
1950 Open Kettles name was changed to Dunkin Donuts
1955 The First Franchise agreement was signed and executed
1963 Dunkin Donuts opens 100th Restaurant
1966 Dunkin Donuts University is founded
1970 First overseas Dunkin Donuts restaurant opens in Japan
1979 Dunkin Donuts opens 1000th Restaurant in USA
1980 Largest Dunkin Donuts Restaurant opens in Thailand, with
130 persons seating arrangement
1990 Allied Domecq purchases Dunkin Donuts
2000th U.S. Dunkin Donuts Restaurant Opens
1992 3000th U.S. Dunkin Donuts Restaurant Opens
1995
1000
th
International Dunkin Donuts Restaurant opens inThailand
1999 Dunkin Donuts celebrates eight billionth coffee cup sold
since 1950
2000 Dunkin Donuts starts operations in Pakistan
Dunkin Donuts opens 5000th International Restaurant
Dunkin Donuts celebrates 50th Anniversary
2004 Dunkin Donuts moves its headquarters to Canton,
MassachusettsTable 1: History of Dunkin Donuts
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Hierarchy
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Hierarchy
Hierarchy
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The Planning Process
The Planning Process
PLANNING
The process, through which a company defines its main objectives & goals,
made its overall strategy for achieving the goals and develop comprehensive
set of plans to desegregate and organize the organizational work.
Strategic Plans: The plans which clearly defines the organizational mission,
analyze the opportunities & threats presented in internal and external
environment.
Goals: It is defined as The desired outcomes that gives directions to the
organizational plans and management decisions.
GOALSAND OBJECTIVESOF DUNKIN DONUTS
Goals
Main goals of the Dunkin Donuts are as follows
To open 100 branches in Karachi, Pakistan
Increase cater to satisfy the ever increasing customers needs
Need to expand the sales as:
More competitors than ever
Get a higher market share
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The Planning Process
Objectives
Marketing
In marketing, the target of Dunkin Donuts is to achieve a high peak by a
substantial amount in sales. This peak can be achieved through high
frequency of advertising and publicity in colleges and universities. If the
consumer base can be increased by 6% and thusly increase our gross income
by $10 more per year from each new consumer/customer then it results in
large growth in revenue.
Advertising
The main purpose of advertising is to create awareness among the youth and
middle-aged working employees (between 18 40 years) by 15 18 % within
a year.
According to the survey, 24 35years old are who drinks coffee the
most
Targeted customers are whose
monthly income is between
Rs.60,000 to Rs.100,000 monthly.
Middle class increase revenue by 45 to 50%
PLANS
Figure 2: Advertising onVehicles
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The Planning Process
The plans to achieve the stated goals and objectives within confined time-
period are:
To Improve Quality
To increase or expand the sales, quality provide to the customers should be
good that for the next time the customers would come back.
Effective Marketing
Dunkin Donuts do marketing of its products in such a manner the person who
is seeing, watching or revising the advertisement would definitely attract
towards it.
Looking For Good Places
Company is always in search of some good places where the outlet of Dunkin
Donuts can grow its business in very efficient and effective manner.
PLANNING STRATEGY
Strategic Plan
The strategic plan is to increase the sales by very high rate and to satisfy the
customers need in a good manner and increase the quality of products (i.e.
Donuts, Coffee etc.).
The company always sticks to its strategic plan in order to achieve its goals
and objectives.
There are many problems that deviates the plan from its original condition but
there is a strategy planned that reduces the negative effects of any deflection
or diversion that is not good for the company.
Plans for Each Pace:
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The Planning Process
Company planned each and every move and step that how employees of the
company are going to achieve the target that is set by the Manager
SWOTANALYSIS
Strengths
The strengths of the company are:
1. Dunkin Donuts has a reputation for brewing high quality coffee for more
than five decades
2. Dunkin Donuts serves nearly 30 cups of freshly brewed coffee each
second or 1 billion cups of brewed coffee every year and approximately
2.7million cups a day.
3. Dunkin Donuts mails coupons to their customers.
Weaknesses
No weaknesses of the company were disclosed
Opportunities:
The opportunities of company are:
1. Franchises available.
2. The opening of new stores.
Threats
The threats, that decrease the companys growth level, are:
1. People want to eat healthier (low calorie/low carbohydrate).
2. Starbucks entry into breakfast sandwiches.
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The Planning Process
3. McDonalds gourmet coffee
4. In Pakistan, the political and law & order situation
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The BCG Matrix
The BCG Matrix
The Boston Consulting Group Matrix, commonly known as the BCG Matrix is a
chart that was created by Bruce Henderson for the Boston Consulting Group in
1968. It assists organizations for the analysis of Business units or Product
Lines.
The BCG Matrix helps companies allocate resources and it plays a vital role in
Brand Marketing and Product and Strategic Management.
COMPONENTSOFTHE BCG MATRIX
The horizontal axis displays the intensity of the market share (low or high) and
the vertical axis indicates the anticipated market growth rate (low or high). A
business unit is analyzed using the SWOT (Strength, Weakness, Opportunities
and Threat) Analysis and placed in one of the four categories.
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The BCG Matrix
Stars
Stars are units with high market share and high growth rate. They generate
large amounts of cash because they have a very high market share. And
because they generate a high market growth rate, they also consume large
amounts of cash. Therefore there is net inflow and outflow of cash cancels out.
But if the star can maintain its high market share, it will, turn into a cash cow
when the market growth rate declines. All organizations should have stars in
their portfolio, so the organization can survive when the market growth rate
declines.
Cash Cows
Figure 3: The BCG Matrix
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The BCG Matrix
Cash Cows are business units with a high market share but they do not help
the industry to grow because of the relatively low growth rate. Cash Cows
generate large amounts of cash with minimal investment. The basic idea
comes from cows, which are milked to maximum with minimum investment
possible.
Cash Cows are regarded as calm and boring in a mature market. But every
organization wants to own as many as possible.
Question Marks
Question Marks are business units that have a high growth rate and low
market share. Because of the low market share, they do not give out muchcash. But at the same time, require a lot of investment to maintain the high
growth rate. This leads to net cash consumption.
A Question mark is often referred to as a Problem Child because it has the
potential to gain market share and turn into a star and then a cash cow when
the market growth goes low. If, however, the question mark does not succeed,
then, after years of cash consumption, it will deteriorate into a dog when
market growth rate falls. Question marks must be analyzed properly to
determine whether they are worth the investment required to increase market
share.
Dogs
Dogs are business units that have low market share and low growth rate. Dogs
are sometimes called pets. This is because they give almost no output and
take in few inputs.
These units generally break even. This means that they hardly generate
enough cash to maintain the businesss market share. Owning Dogs can
provide a social benefit such as jobs or synergies that assist other businesses.
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The BCG Matrix
But, generally such units are worthless because they do not generate any cash
for the organization. Dogs should be sold off because they depress the
organizations return on assets ratio.
DUNKIN DONUT BCG MATRIX ANALYSIS
Like all other organizations Dunkin Donuts also has a variety of business
units. Many of the products can be categorized as Stars, Cash Cows, Question
Marks or Dogs.
Stars
Dunkin Donuts star products include:
Donuts
o Boston Kreme Donuts
o Chocolate Sprinkle Donuts
The Boston Kreme Donut is a donut with Chocolate frosting and a creamy
vanilla or custard filling. It is not only a star product in Pakistan, but it was
designated as the official donut of Massachusetts in 2003.
The Chocolate Sprinkle Donut consists of a chocolate frosting covered with
multicolored coated chocolates sprinkled
These are considered as star because they help Dunkin Donuts to maintain
high market share and also lead to market growth.
Cash Cows
Dunkin Donuts considers Munchkins as Cash Cows.
Munchkins are a part of the Donut Hole category at Dunkin Donuts.
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The BCG Matrix
Donuts are not made by cutting out the central portion of a cake but by
dropping a ring of dough from a special nozzle into hot oil. However, soon after
ring donuts became popular, an opportunity to market holes emerged.
These holes seemed as if they were portions that were cut out to make the
ring.
Question Marks
The Mini Pizzas are considered as Question Marks for Dunkin Donuts. The
management is unsure about making further investments in the Mini Pizza
category or to discontinue its production.
Dogs
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The BCG Matrix
The Bagel with Cream is considered as the Dog for Dunkin Donuts. The
management is reluctant in making further investments in this product, as it
does not give the expected profit
Figure 4: BCG Matrix Analysis of Dunkin Donuts
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The Organizing Process
The Organizing Process
ORGANIZATION:
The arranging and structuring work to accomplish organizational goals is
known as organizing. It is important process during which managers design an
organizations structure. Organizational structure is the formal arrangement of
jobs within an organization. When managers change or create the structure,
they are engaged in organizational design, a process that involves decision
making, work specialization, departmentalization, chain of command, span of
control formalization, centralization and decentralization.
At Dunkin Donuts the decisions making takes place at upper level, top
managers make key decisions with little input from operating core. The lower
level employees like counter persons are not involved in decision making
process because they are not as much experienced as top managers are in the
organization. Dunkin Donuts is a centralized type organization.
Dunkin Donuts is giving more authority and power to shop managers to make
decisions. They are empowering shop managers to employees. In large
companies especially, lower level management are closer to the action and
typically have more detailed knowledge about problems and how best to solve
them, than do top managers. But empowerment is given to shop managers,
not to the counter persons.
Organizations dont have identical structures. Different organizations do
different tasks, so they have different generic models of organization design.
There are two types of organizational models, Mechanistic and Organic design.
A mechanistic organization is a rigid and tightly controlled structure
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The Organizing Process
characterized by high specialization, rigid departmentalization, narrow span of
control, high formalization, a limited information network, and little
participation in decision making by lower level employees.
Mechanistic organizational structures strive for efficiency and rely heavily on
rules, regulations, standardized tasks, similar controls. This design tries to
minimize the impact of different personalities, judgments, and ambiguity
because these human traits are seen as inefficient and inconsistent. Although
no organization is totally mechanistic, almost all large ones have some of
these mechanistic characteristics.
Dunkin Donuts has organic structure, which is a structure thats highly
adaptive and flexible. Organic organization may have specialized jobs, but
those jobs are not standardized and can change as need require. Work is
frequently organized around employee teams. Employees are highly trained to
handle diverse activities and problems, and they require minimal formal rules
and little direct supervision.
Managers are finding that traditional designs are often arent appropriate for
todays increasingly dynamic and complex environment. Instead,
organizations need to be lean, flexible, and innovative, that is, they need to be
more organic. So managers are finding creative ways to structure and
organize work.
There are contemporary organizational designs, but Dunkin Donuts follow
Team structure. A team structure is one in which the entire organization is
made up of work teams that do the organizations work. In this structure shop
managers do the work in the way they think is best, but they are also
responsible for all work performance results in their respective areas.
In large organizations, the team structure complements what is typically a
functional or divisional structure. This allows the organization to have the
efficiency of a bureaucracy while providing the flexibility that team provide.
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The Organizing Process
Dunkin Donuts is learning organization; the learning organization is a concept
that is becoming an increasingly widespread philosophy in modern companies,
from the largest multinationals to the smallest ventures. The concept of
Learning Organization is increasingly relevant given the increasing complexity
and uncertainty of the organizational environment
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The Controlling Process
The Controlling Process
CONTROLLING:
After goals and plans are set, Tasks and structural arrangements are put in
place, and people are hired, trained and motivated, there has to be some
evaluation of whether the things are going as implemented. To ensure that
goals are being met, managers must monitor and evaluate performance. This
is called Controlling.
DUNKIN DONUTSPERFORMANCE EVALUATIONAND
CONTROLLING:
Dunkin Donuts Performance management focuses on what techniques and
methodology is involved in controlling the Organization. It is the natural
process of Organization and basically called the one of the Six Sigma. It points
out any shortcomings of either companys staff or Business plans and helps to
take appropriate corrective actions. Evaluation Management allows Dunkin
Donuts to recognize the full potentials of its staff. This method can be
described as a Comprehensive process starting from Monitoring and
establishing desired characteristics to value Companys progress and
rewarding employees for their achievements. Additionally, this evaluationmethod also helps mangers to provide certain guidelines of what they expect
and what the employees need to accomplish.
QUALITYCONTROL:
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The Controlling Process
Quality Control is one of the most important parts in Organization Controlling
Process. During this Quality Control Process, the Organization divides the
whole production processes in to smaller and simpler processes to identify the
points where inspection review is necessary. Dunkin Donuts mainly
focuses on the Satisfaction of the Customers and therefore, Quality control is
efficient service is necessary. The Process that involves in quality Control is by
sending a person of company to different outlets for the inspection of products
and levels of services provided. The main Strategy of controlling the work
tasks of Dunkin Donuts is using the Cause and Effect Method, through this
process company Identifies the issue and then divide it in to different
Departments and tries to resolve that issue, in this way the Controlling process
is also done and efficiently and Discipline is also maintained.
The main goal of Dunkin Donuts is Customer Satisfaction and providing good
Quality of services and to check it, managers at the company are continuously
evaluating employees performance. In Dunkin Donuts the stock mangers are
use the Periodic System to manage the weekly inventory. The outlets have
goods for 4-5 days and that is how the Periodic System works in most of the
Dunkin Donuts Outlets.
CONTROLLINGENVIRONMENTALINFLUENCES:
Today, there are different cultures present in Dunkin Donuts Market Strategy,
which are continuously adapting new Technologies to satisfy the Demands of
consumer needs. Dunkin Donuts is keeping the factors such as Age, Income
and most importantly the lifestyle of the customers to succeed in such a
competitive market. To control this situation Dunkin Donuts have
implemented several changes to attract customers like their many
Restaurants are looking for Centralized kitchens to increase the cost and
reduce the cost. This process will help to save customers money as well. The
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The Controlling Process
Restaurants of Dunkin Donuts are also adapting to the lifestyles of many of its
customers.
Dunkin Donuts Empowers by controlling its Departmental Teams to satisfy
their guests and fulfill their all needs in a friendly manner. It also monitors the
speed of its employees' service in providing quality products to their
Customers.
Dunkin Donuts are also involved in Designing Effective Control Systems which
have got Following Characteristics.
1. Controls at all levels of Business
2. Acceptability to those who will Enforce Decisions
3. Flexibility
4. Accuracy
5. Cost Effectiveness
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The Leading Process
The Leading Process
Leadership is processes in which mangers motivate their subordinates in order
get the most out of them. Leading is focused on influencing people, while the
other functions are focused on "resources". The factor that is considered to be
the most important one throughout the world is the presence of interpersonal
skills in the leaders. The human interaction plays an essential part in
influencing the human behavior. In Pakistan the corporate leadership is a very
limited concept. Most of the leaders in our organizations first think aboutthemselves and then look for the things that benefit others and the
organization. Every organization in Pakistan has their own way of leading,
some stick to the highly professional approach where they are highly goal
oriented and in some organizations the leaders have the fatherly concern
where along with supervising the people on work, they also take care of
subordinates off-the-work life.
LEADERSHIPAT DUNKIN DONUTS:
Usually the leadership in the organizations is all about being the first one, the
most powerful and the biggest one but the trend that has been fallowed in our
organization revolves around the effort in setting the direction and influencing
people to fallow that direction. The qualities that a good manager have to
develop trust between manager and the subordinates, the open and face toface communication, best at handling interpersonal conflict among the
employees, he must also value the diversity in the workforce, work on
motivating the staff and constantly look for the feedback as it identifies the
room for improvement.
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The Leading Process
A leader is not a magician he cant change the nature and the attitude of the
people in a second or so, he is the one who manage and change their attitudes
gradually with the techniques like team building and system thinking which
brings out the capabilities of every single individual. The most common skills
that a manager in Dunkin Donuts have the ability to think creatively,
systematically, and conceptually i.e. he have the broad view while handling
different situations. The ability to analyze information and make decision and
he also possess the ability to judge his own performance through the
knowledge of the organization and its environment he will lead and for this
purpose we at DUNKIN DONUTS use the method of self evaluation forms for
the self appraisal and also take feedback from the subordinates through these
appraisal forms.
The employees who fulfill their monthly, quarterly and yearly targets get
different kind of incentives and sometimes even a promotion for showing high
efforts performances this help them to motivate their employees. The mode of
communication used at Dunkin Donuts is the world call telephones at every
shop and office that makes the communication between the workers and the
manager at the head office easier and effective. The leadership style that is
used at Dunkin Donuts is autocratic where the leader makes the decision and
everyone has to fallow it. They are using the same policy since so many years
so it is considered to be the most effective one.
Dunkin Donuts highly appreciates the cross functional team approach as it
enhances the capabilities of every single individual which in turn affect the
organization progress. The integration of the all the departments within the
organization lead to the continuous improvement in the quality of work.
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Human Resource Management
Human Resource Management:
Human Resource Management provides support and advice to line
Managements. The resource Management (HRM) includes a variety of
activities. The function of Human Resource Management is generally
administrative. Organizations generally use Selection Evaluation and Payroll as
a part of their Human Resource Management process. The use of Human
Capital has become extremely important to organizations for their success.
Human resource functions consist of tracing employee data which may include
skills, personal history, accomplishments, capabilities and salary records.
Human Resource management includes:
1. Recruiting: Recruitment is process that must be carried in order to have
right person for right job at right time
2. Training: Training is process in which organizations increase their
employees competence level. Employee training may be done throughtraining courses, books, CDs, web based learning etc.
3. Performance management: Organization carries out performance
management process in order to evaluate employee current
performance and to figure out employees who will be beneficial to
organization in long run.
HUMAN RESOURCE MANAGEMENT AT DUNKIN
DONUTS:
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Human Resource Management
Long Term Goal:
The long term vision of Dunkin Donuts is to become a diversified company
which is operating Pakistan. The Management is planning to open 100
branches in Karachi alone. To acquire this target they need the people who are
competent enough to achieve this target. Therefore they aim to recruit highly
productive people. Dunkin Donuts look for long-term commitment on the part
of both Company and employee and have designed their systems to fulfill the
Company's part of this promise.
Recruitment and selection process:
The recruitment process is taken very seriously and attentively. This is the
most important part. It is vital that they select people with productive and
unique qualities essential for their continued success and rise.
Identification of need
The first step is to ensure that whether there is a need for new selection or
not. If there is a new position to be made then, then the department notifies
the Human Resource Department to place advertisement in the newspapers.
Application Form
Application forms enable the candidates to present a complete picture of their
personality and talent. It is the first stage of evaluation and the most basic
criteria for initial selection.
Evaluation of Resume
HR department checks all the resumes of the people who have applied. In its
evaluation the HR department ensures that abilities and experience matches
with their requirement of job.
Short Listing
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Human Resource Management
After the evaluation of the resumes the HR shortlists the candidates who have
fulfilled the minimum requirement of the job description and specification.
Test
The test is conducted by the HR department to ensure that best applicants are
selected.
Interview
The candidates who have cleared the tests are then called for interview. Aim
of the interviews is to check the persons subjective skills which are difficult to
measure such as attitude, communication skills, abilities and personality.
Hiring
After the medical test, the candidate is consulted and referred back to the
relevant department for which it is hired. If the department satisfies and
agrees upon it, then the candidate is hired.
Training
Company arranges a long range of training program; both technical
management and core management and they are on a regular basis to
develop ethics, knowledge and basic working skills.
PERFORMANCEMANAGEMENT
Compensation and Benefits
Dunkin Donuts provides compensation and benefits to high performing
employees in the form of bonuses and promotions.
Career Development
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Human Resource Management
The main aim of career development process is to satisfy the employees with
their personal needs, desires and skills with the requirements of the Company
for the right person in the right job at the right time.