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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. ahad !uberi. Without his help and guidance, the making of this report "ould have been impossible. We are also thankful to Mr. Tahir Mehmood at #unkin$ #onuts, "ithout "hose cooperation, the completion of this report "ould have been very difficult. urthermore, "e thank all those "ho cooperated "ith us for the research and "riting of this report.
%xecutive &ummary
Letter of Transmittal
Mr. ahad !uberi &!A'I&T SUBJECT: Submission of Management Principles Report (espected &ir, We are hereby submitting our analysis report on #unkin$ #onuts. We sincerely hope that you appreciate the report and the first hand material included in this report. This report is the semester final pro)ect of the course *Management +rinciples$ and covers the management processes of #unkin$ #onuts. The primary source of our information for this report "as a questionnaire survey. We hope appreciate this report and find it of satisfactory quality. ,ours &incerely, Abdul 'asit -a)amussaqib Mehmood Mo..am -asir Ali -abeel /aroon Assad Ahmed ''A 0 1%
%xecutive &ummary
Executive Summary
#unkin$ #onuts offers a "ide range of products and therefore it has a "ide management hierarchy. It$s the "orld largest chain of coffee and baked goods. In +akistan it$s been "orking since 2333 and its ma)or products are #onuts, 4offee, Tea, &and"iches and #rinks. It imports all its ra" material from 5&A. The main goal of #unkin$ #onuts 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 al"ays sticks to its plan and reduces the negative effects of deviation from plan by "orking on it. The analysis is also carried out using The '46 matrix at the organi.ation. In the organi.ation decisions made at upper level as it is a centrali.ed organi.ation. It focuses on +erformance management and it monitors its employees to get full potentials out of them. In the organi.ation the managers develop trusts bet"een the employees and al"ays "ork to motivate the staff. Managers use methods of self evaluation forms to get feedback.
Table of 4ontents
Table of Contents
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+lanning.......................................................................................................................11 6oals and 7b)ectives of #unkin$ #onuts.....................................................................11 +lans.............................................................................................................................12 +lanning &trategy.........................................................................................................18 &W7T Analysis............................................................................................................18
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7rgani.ation;................................................................................................................23
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4ontrolling;...................................................................................................................28 <
Table of 4ontents #unkin$ #onuts performance %valuation and controlling;............................................28 =uality 4ontrol;.............................................................................................................28 4ontrolling %nvironmental Influences;.........................................................................2<
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Table of 4ontents
Introduction
#unkin$ #onuts "as founded in 1@93 by 'ill (osenberg. It started operations in =uincy, Massachusetts. The first franchise license "as issued in 1@99. #unkin$ #onuts is the "orld$s largest chain of coffee and baked goods. /aving 92 varieties of donuts and more than a do.en coffee beverages, #unkin$ #onuts serves more than < million customers around the globe daily. In 2333, #unkin$ #onuts started its operation in +akistan. It is franchised by +hoenix oods >td. in >ahore and Islamabad. Aarachi operations are controlled by I'> BInternational 'rands >imitedC.#unkin$ #onuts has opened around t"elve outlets in >ahore and Islamabad and around ten outlets in Aarachi. The ma)or products provided in +akistan by the company are #onuts, 4offee, Tea, &and"iches and #rinks. These products are manufactured using ra" Materials that are all imported from 5&A.
/istory
History
In 1@<?, 'ill (osenberg collected D9,333 to start a small business to deliver coffee and donuts to hungry "orkers at their "orkplaces. 'y 1@<:, (osenberg had opened a retail coffee and donut store named 7pen Aettle. In 1@93, (osenberg capitali.ed on the trend of #unkin$ g and #unkin$ #onuts "as born. -ext, (osenberg thought of expanding his business nation"ide. In 1@99, the first #unkin$ $$ #onuts franchise "as sold and only ten years later, #unkin$ $$ #onuts had crossed international borders into 4anada. 'y 1@E3, #unkin$ #onuts opened its first overseas store, half"ay across the "orld in Fapan. Today, there are over :333 #unkin$ $$ #onuts stores in more than 83 countries "orld"ide selling over < million donuts daily. In 2333, #unkin$ #onuts started its operation in +akistan. It is franchised by +hoenix oods >td. in >ahore and Islamabad. Aarachi operations are controlled by I'> BInternational 'rands >imitedC.#unkin$ #onuts has opened around t"elve outlets in >ahore and Islamabad and around ten outlets in Aarachi.
'igure &: 'irst S6op of #un7in #onuts
/istory
'ill (osenberg invested D9,333 to start Industrial >uncheon &ervices 'ill (osenberg opened a donut shop named G7pen AettleH in =uincy, Massachusetts 7pen Aettle$s name "as changed to #unkin$ $$ #onuts The irst ranchise agreement "as signed and executed #unkin$ $$ #onuts opens 133th (estaurant #unkin$ $$ #onuts 5niversity is founded irst overseas #unkin$ $$ #onuts restaurant opens in Fapan #unkin$ #onuts opens 1333th (estaurant in 5&A >argest #unkin$ #onuts (estaurant opens in Thailand, "ith 183 persons seating arrangement Allied #omecq purchases #unkin$ #onuts 2333th 5.&. #unkin$ $$ #onuts (estaurant 7pens 8333th 5.&. #unkin$ $$ #onuts (estaurant 7pens 1333th International #unkin$ $$ #onuts (estaurant opens in Thailand #unkin$ $$ #onuts celebrates eight billionth coffee cup sold since 1@93 #unkin$ $$ #onuts starts operations in +akistan #unkin$ $$ #onuts opens 9333th International (estaurant #unkin$ $$ #onuts celebrates 93th Anniversary #unkin$ $$ #onuts moves its headquarters to 4anton, Massachusetts
/ierarchy
/ierarchy
Hierarchy
$ A"S AN#
$oals
BJECT(+ES
'
#UNK(N: # NUTS
Main goals of the #unkin$ #onuts are as follo"s To open 133 branches in Aarachi, +akistan Increase cater to satisfy the ever increasing customer$s needs -eed to expand the sales as; More competitors than ever 6et a higher market share
b;ecti<es
Mar7eting In marketing, the target of #unkin$ #onuts 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 ?J and thusly increase our gross income by D13 more per year from each ne" consumerKcustomer then it results in large gro"th in revenue. A=<ertising The main purpose of advertising is to create a"areness among the youth and middleL aged "orking employees Bbet"een 1: 0 <3 yearsC by 19 0 1: J "ithin a year. According to the survey, 2< 0 89 years old are "ho drinks coffee the most Targeted customers are "hose monthly income is bet"een (s.?3,333 to (s.133,333 monthly. Middle class increase revenue by <9 to 93J
'igure ): A=<ertising on +e6icles
P"ANS
The plans to achieve the stated goals and ob)ectives "ithin confined timeLperiod are;
To (mpro<e >ualit9
To increase or expand the sales, quality provide to the customers should be good that for the next time the customers "ould come back.
Effecti<e Mar7eting
#unkin$ #onuts do marketing of its products in such a manner the person "ho is seeing, "atching or revising the advertisement "ould definitely attract to"ards it.
P"ANN(N$ STRATE$,
Strategic Plan
The strategic plan is to increase the sales by very high rate and to satisfy the customer$s need in a good manner and increase the quality of products Bi.e. #onuts, 4offee etc.C. The company al"ays sticks to its strategic plan in order to achieve its goals and ob)ectives. 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.
S! T ANA",S(S
Strengt6s
The +lanning +rocess The strengths of the company are; 1. #unkin$ #onuts has a reputation for bre"ing high quality coffee for more than five decades 2. #unkin$ #onuts serves nearly 83 cups of freshly bre"ed coffee each second or 1 billion cups of bre"ed coffee every year and approximately 2.Emillion cups a day. 8. #unkin$ #onuts mails coupons to their customers.
!ea7nesses
-o "eaknesses of the company "ere disclosed
pportunities:
The opportunities of company are; 1. ranchises available.
T6reats
The threats, that decrease the company$s gro"th level, are; 1. +eople "ant to eat healthier Blo" calorieKlo" carbohydrateC. 2. &tarbucks entry into breakfast sand"iches. 8. Mc#onalds gourmet coffee <. In +akistan, the political and la" I order situation
Stars
&tars are units "ith high market share and high gro"th rate. They generate large amounts of cash because they have a very high market share. And because they generate a high market gro"th rate, they also consume large amounts of cash. Therefore there is net inflo" and outflo" of cash cancels out. 'ut if the star can maintain its high market share, it "ill, turn into a cash co" "hen the market gro"th rate declines. All organi.ations should have stars in their portfolio, so the organi.ation can survive "hen the market gro"th rate declines.
Cas6 Co?s
The '46 Matrix 4ash 4o"s are business units "ith a high market share but they do not help the industry to gro" because of the relatively lo" gro"th rate. 4ash 4o"s generate large amounts of cash "ith minimal investment. The basic idea comes from co"s, "hich are milked to maximum "ith minimum investment possible. 4ash 4o"s are regarded as calm and boring in a mature market. 'ut every organi.ation "ants to o"n as many as possible.
>uestion Mar7s
=uestion Marks are business units that have a high gro"th rate and lo" market share. 'ecause of the lo" market share, they do not give out much cash. 'ut at the same time, require a lot of investment to maintain the high gro"th rate. This leads to net cash consumption. A =uestion mark is often referred to as a G+roblem 4hildH because it has the potential to gain market share and turn into a star and then a cash co" "hen the market gro"th goes lo". If, ho"ever, the question mark does not succeed, then, after years of cash consumption, it "ill deteriorate into a dog "hen market gro"th rate falls. =uestion marks must be analy.ed properly to determine "hether they are "orth the investment required to increase market share.
#ogs
#ogs are business units that have lo" market share and lo" gro"th rate. #ogs are sometimes called pets. This is because they give almost no output and take in fe" inputs. These units generally Gbreak evenH. This means that they hardly generate enough cash to maintain the business$s market share. 7"ning #ogs can provide a social benefit such as )obs or synergies that assist other businesses. 'ut, generally such units are "orthless because they do not generate any cash for the organi.ation. #ogs should be sold off because they depress the organi.ation$s return on assets ratio.
Stars
#unkin$ #onuts$ star products include; #onuts o 'oston Areme #onuts o 4hocolate &prinkle #onuts The 'oston Areme #onut is a donut "ith 4hocolate frosting and a creamy vanilla or custard filling. It is not only a star product in +akistan, but it "as designated as the official donut of Massachusetts in 2338. The 4hocolate &prinkle #onut consists of a chocolate frosting covered "ith multicolored coated chocolates sprinkled These are considered as star because they help #unkin$ #onuts to maintain high market share and also lead to market gro"th.
Cas6 Co?s
#unkin$ #onuts$ considers Munchkins as 4ash 4o"s. Munchkins are a part of the G#onut /oleH category at #unkin #onuts. #onuts are not made by cutting out the central portion of a cake but by dropping a ring of dough from a special no..le into hot oil. /o"ever, soon after ring donuts became popular, an opportunity to market GholesH emerged. These holes seemed as if they "ere portions that "ere cut out to make the ring.
>uestion Mar7s
The Mini +i..as are considered as =uestion Marks for #unkin$ #onuts. The management is unsure about making further investments in the Mini +i..a category or to discontinue its production.
#ogs
The 'agel "ith 4ream is considered as the #og for #unkin #onuts. The management is reluctant in making further investments in this product, as it does not give the expected profit
The 7rgani.ing +rocess departmentali.ation, narro" span of control, high formali.ation, a limited information net"ork, and little participation in decision making by lo"er level employees. Mechanistic organi.ational structures strive for efficiency and rely heavily on rules, regulations, standardi.ed tasks, similar controls. This design tries to minimi.e the impact of different personalities, )udgments, and ambiguity because these human traits are seen as inefficient and inconsistent. Although no organi.ation is totally mechanistic, almost all large ones have some of these mechanistic characteristics. #unkin$ #onuts has organic structure, "hich is a structure that$s highly adaptive and flexible. 7rganic organi.ation may have speciali.ed )obs, but those )obs are not standardi.ed and can change as need require. Work is frequently organi.ed around employee teams. %mployees are highly trained to handle diverse activities and problems, and they require minimal formal rules and little direct supervision. Managers are finding that traditional designs are often aren$t appropriate for today$s increasingly dynamic and complex environment. Instead, organi.ations need to be lean, flexible, and innovative, that is, they need to be more organic. &o managers are finding creative "ays to structure and organi.e "ork. There are contemporary organi.ational designs, but #unkin$ #onuts follo" Team structure. A team structure is one in "hich the entire organi.ation is made up of "ork teams that do the organi.ation$s "ork. In this structure shop managers do the "ork in the "ay they think is best, but they are also responsible for all "ork performance results in their respective areas. In large organi.ations, the team structure complements "hat is typically a functional or divisional structure. This allo"s the organi.ation to have the efficiency of a bureaucracy "hile providing the flexibility that team provide. #unkin$ #onuts is learning organi.ationM the learning organi.ation is a concept that is becoming an increasingly "idespread philosophy in modern companies, from the largest multinationals to the smallest ventures. The concept of >earning 7rgani.ation is
The 7rgani.ing +rocess increasingly relevant given the increasing complexity and uncertainty of the organi.ational environment
#UNK(N: #
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#unkin$ #onuts +erformance management focuses on "hat techniques and methodology is involved in controlling the 7rgani.ation. It is the natural process of 7rgani.ation and basically called the one of the &ix &igma. It points out any shortcomings of either company$s staff or 'usiness plans and helps to take appropriate corrective actions. %valuation Management allo"s #unkin$ #onuts to recogni.e the full potentials of its staff. This method can be described as a 4omprehensive process starting from Monitoring and establishing desired characteristics to value 4ompany$s progress and re"arding employees for their achievements. Additionally, this evaluation method also helps mangers to provide certain guidelines of "hat they expect and "hat the employees need to accomplish.
The 4ontrolling +rocess =uality 4ontrol is one of the most important parts in 7rgani.ation 4ontrolling +rocess. #uring this =uality 4ontrol +rocess, the 7rgani.ation divides the "hole production processes in to smaller and simpler processes to identify the points "here inspection revie" is necessary. #unkin$ #onuts mainly focuses on the &atisfaction of the 4ustomers and therefore, =uality control is efficient service is necessary. The +rocess that involves in quality 4ontrol is by sending a person of company to different outlets for the inspection of products and levels of services provided. The main &trategy of controlling the "ork tasks of #unkin$ #onuts is using the G4ause and %ffect MethodH, through this process company Identifies the issue and then divide it in to different #epartments and tries to resolve that issue, in this "ay the 4ontrolling process is also done and efficiently and #iscipline is also maintained. The main goal of #unkin$ #onuts is 4ustomer &atisfaction and providing good =uality of services and to check it, managers at the company are continuously evaluating employees$ performance. In #unkin$ #onuts the stock mangers are use the G+eriodic &ystemH to manage the "eekly inventory. The outlets have goods for <L9 days and that is ho" the +eriodic &ystem "orks in most of the #unkin$ #onuts 7utlets.
The 4ontrolling +rocess #unkin$ #onuts %mpo"ers by controlling its #epartmental Teams to satisfy their guests and fulfill their all needs in a friendly manner. It also monitors the speed of its employeesO service in providing quality products to their 4ustomers. #unkin$ #onuts are also involved in #esigning %ffective 4ontrol &ystems "hich have got ollo"ing 4haracteristics. 1. 4ontrols at all levels of 'usiness 2. Acceptability to those "ho "ill %nforce #ecisions 8. lexibility
The >eading +rocess every single individual. The most common skills that a manager in #unkin$ #onuts have the ability to think creatively, systematically, and conceptually i.e. he have the broad vie" "hile handling different situations. The ability to analy.e information and make decision and he also possess the ability to )udge his o"n performance through the kno"ledge of the organi.ation and its environment he "ill lead and for this purpose "e at #5-AI-$ #7-5T& use the method of self evaluation forms for the self appraisal and also take feedback from the subordinates through these appraisal forms. The employees "ho fulfill their monthly, quarterly and yearly targets get different kind of incentives and sometimes even a promotion for sho"ing high efforts performances this help them to motivate their employees. The mode of communication used at #unkin$ #onuts is the "orld call telephones at every shop and office that makes the communication bet"een the "orkers and the manager at the head office easier and effective. The leadership style that is used at #unkin$ #onuts is autocratic "here the leader makes the decision and everyone has to fallo" it. They are using the same policy since so many years so it is considered to be the most effective one. #unkin$ #onuts highly appreciates the cross functional team approach as it enhances the capabilities of every single individual "hich in turn affect the organi.ation progress. The integration of the all the departments "ithin the organi.ation lead to the continuous improvement in the quality of "ork.
/uman (esource Management The long term vision of #unkin$ #onuts is to become a diversified company "hich is operating +akistan. The Management is planning to open 133 branches in Aarachi alone. To acquire this target they need the people "ho are competent enough to achieve this target. Therefore they aim to recruit highly productive people. #unkin #onuts look for longLterm commitment on the part of both 4ompany and employee and have designed their systems to fulfill the 4ompanyOs part of this promise.
Identification of need
The first step is to ensure that "hether there is a need for ne" selection or not. If there is a ne" position to be made then, then the department notifies the /uman (esource #epartment to place advertisement in the ne"spapers.
Application orm
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.
%valuation of (esume
/( department checks all the resumes of the people "ho have applied. In its evaluation the /( department ensures that abilities and experience matches "ith their requirement of )ob.
&hort >isting
After the evaluation of the resumes the /( shortlists the candidates "ho have fulfilled the minimum requirement of the )ob description and specification.
Test
The test is conducted by the /( department to ensure that best applicants are selected.
(nter<ie?
The candidates "ho have cleared the tests are then called for intervie". Aim of the intervie"s is to check the person$s sub)ective skills "hich are difficult to measure such as attitude, communication skills, abilities and personality.
0iring
After the medical test, the candidate is consulted and referred back to the relevant department for "hich it is hired. If the department satisfies and agrees upon it, then the candidate is hired.
Training
4ompany arranges a long range of training programM both technical management and core management and they are on a regular basis to develop ethics, kno"ledge and basic "orking skills.
4areer #evelopment
The main aim of career development process is to satisfy the employees "ith their personal needs, desires and skills "ith the requirements of the 4ompany for the right person in the right )ob at the right time.