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.

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 Basit Najamussaqib Mehmood Mozzam Nasir Ali Nabeel Haroon Assad Ahmed BBA 1E

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.

Table of Contents

Table of Contents
ACKNOWLEDGEMENTS................................................................1 LETTER
OF

TRANSMITTAL............................................................2

EXECUTIVE SUMMARY...............................................................3 TABLE

OF

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 4

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

Table of Contents

Introduction
Dunkin 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.

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 Canada. 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 Dunkin Donuts

only ten years later, Dunkin Donuts had crossed international borders into

History

1946 1948 1950 1955 1963 1966 1970 1979 1980

Bill Rosenberg invested $5,000 to start Industrial Luncheon Services Bill Rosenberg opened a donut shop named Open Kettle in Quincy, Massachusetts Open Kettles name was changed to Dunkin Donuts The First Franchise agreement was signed and executed Dunkin Donuts opens 100th Restaurant Dunkin Donuts University is founded First overseas Dunkin Donuts restaurant opens in Japan Dunkin Donuts opens 1000th Restaurant in USA Largest Dunkin Donuts Restaurant opens in Thailand, with 130 persons seating arrangement Allied Domecq purchases Dunkin Donuts 2000th U.S. Dunkin Donuts Restaurant Opens 3000th U.S. Dunkin Donuts Restaurant Opens 1000th International Dunkin Donuts Restaurant opens in Thailand Dunkin Donuts celebrates eight billionth coffee cup sold since 1950 Dunkin Donuts starts operations in Pakistan Dunkin Donuts opens 5000th International Restaurant Dunkin Donuts celebrates 50th Anniversary Dunkin Donuts moves its headquarters to Canton, Massachusetts

1990 1992 1995 1999 2000 2004

Table 1: History of Dunkin Donuts

Hierarchy

Hierarchy

Hierarchy

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.

GOALS
Goals

AND

OBJECTIVES

OF

DUNKIN DONUTS

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

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 35 years old are who drinks coffee the most Targeted monthly customers income is are whose between

Rs.60,000 to Rs.100,000 monthly. Middle class increase revenue by 45 to 50%

Figure 2: Vehicles Advertising on

PLANS

The Planning Process The plans to achieve the stated goals and objectives within confined timeperiod 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:

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

SWOT ANALYSIS
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.

The Planning Process 3. McDonalds gourmet coffee 4. In Pakistan, the political and law & order situation

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.

COMPONENTS

OF THE

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.

The BCG Matrix

Figure 3: 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

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 much cash. 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.

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.

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

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

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

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.

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

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 DONUTS
CONTROLLING:

PERFORMANCE

EVALUATION

AND

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 evaluation method also helps mangers to provide certain guidelines of what they expect and what the employees need to accomplish.

QUALITY CONTROL:

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.

CONTROLLING ENVIRONMENTAL INFLUENCES:

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 implemented market. several To control to this situation Dunkin like Donuts their have many changes attract customers

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

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

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 about themselves 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.

LEADERSHIP

AT

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 to face 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.

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.

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 through training courses, books, CDs, web based learning etc. 3. Performance management management: process in Organization order to carries out performance current

evaluate

employee

performance and to figure out employees who will be beneficial to organization in long run.

HUMAN DONUTS:

RESOURCE

MANAGEMENT

AT

DUNKIN

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

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.

PERFORMANCE

MANAGEMENT

Compensation and Benefits

Dunkin Donuts provides compensation and benefits to high performing employees in the form of bonuses and promotions.

Career Development

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.