Professional Documents
Culture Documents
1
Organizational Behavior Business Report
Supervisor:
Maam javeria Khalid
2
DECLARATION
We hereby declare that this project report titled comparative study of Starbucks and Dunkin
donuts submitted to the Department of Management Sciences, Capital University of Science and
Technology, Islamabad, is our work and is neither submitted to any other university/institution
for the award of any degree/diploma/certificate nor is published anywhere.
STUDENTS NAME:
3
CERTIFICATION
This is to certify that the Project Report Comparative Study of Starbucks and Dunkin Donuts
submitted in partial fulfilment for the award of BBA Programme of Department of Business
Management, Capital University of Science and Technology Islamabad, was carried out by
Muhammad Salman Asif and Basit Ali khan yousafzai, Rameesha Shahid under my
guidance. This work has not been submitted to any other University or Institution for the award
of any degree/diploma/certificate etc.
Project Supervisor
Maam javeria Khalid
4
ACKNOWLEDGEMENTS
First of all, we are very grateful to Almighty Allah, who blessed us with abilities, talent, energy
and trust that made us effectively finish our Project although it is a helpful job, and it requires
dedicated efforts, research, dedication and most of all advice to be effectively achieved.
Guidance and research are of the utmost significance among all of these components.
A milestone of this nature could never be possible to achieve without the support of a galaxy of
some truly loving persons. No words to describe our feelings of respect for our affectionate
parents, whose love, encouragement and prayers invariably buoyed us up. Their concern,
devotion and love can never be paid back. We are thankful to our supervisor ma’am javeria
Khalid who has always inspired us to generate new ideas, pointed us in the right direction,
guided our research design and provided exceptional advice, we are grateful to her.
5
Executive Summary
This project was aimed to carrying out the comparative study of two big organization’s leading
in coffee industry. The primary objective of this project was to let people know the importance
of behavior, management on performance, productivity and goal accomplishment in an
organization
6
TABLE OF CONTENTS
Table of Contents
Chapter 1..........................................................................................................................................9
Background of topic........................................................................................................................9
1.1 Introduction................................................................................................................................9
1.2 Popularity Of Coffee industry In Asia..............................................................................9
1.3Starbucks coffee........................................................................................................................10
1.4Starbucks Vision Statement......................................................................................................11
1.5 Starbucks Mission
Statemen……………………………………………………………………………………………
…..11
1.6 problem statement for starbucks…………………………………………………………..11
1.6.1 corporate and management opinion…………………………………………………….11
1.6.2 employees opinion………………………………………………………………………12
1.7 Star bucks Organizational structure………………………………………………………12
1.7.1 functional hierarchy………………………………………………………………….....13
1.7.2 Geographic Divisions……………………………………………………………………13
1.7.3 Product Based Divisons…………………………………………………………………13
1.7.4 Teams…………………………………………………………………………………….13
1.8 Internal Communication……………………………………………………………………14
1.8.1 Act Quickly and Decisively……………………………………………………………..14
1.8.2 Be transparent and open to criticism…………………………………………………….14
1.8.3 Training should never stop……………………………………………………………..14
1.9 external ecommunication…………………………………………………………………….14
1.10 Research questions………………………………………………………………………….14
1.11 Research Objectives.......................................................................................................15
1.12PESTEL........................................................................................................................................... 15
1.13 literature Review…………………………………………………………………………17
1.14 Relationships……………………………………………………………………………..18
1.15 Hypothesis..................................................................................................................19
2.1 Dunkin Donuts…………………………………………………………………………….20
7
2.2 Problem Statement..........................................................................................................21
Management Opinion...................................................................................................................21
Employees Opinion………………………………………………………………………………21
2.3 organizatonall structure………………………………………………………………………21
2.4 Mission Statement……………………………………………………………………………22
2.5 Vision Statement……………………………………………………………………………..23
2.6 Economic responsibility..........................................................................................................23
2.7Legal Responsibility………………………………………………………………………….23
2.8 Ethical responsibility...............................................................................................................24
2.9SWOT.......................................................................................................................................24
2.10 PESTLE ANALYSIS............................................................................................................25
2.11socialsystem............................................................................................................................27
2.12 literature Review……………………………………………………………………………27
2.13QUESTIONAIRE...................................................................................................................28
2.14 references…………………………………………………………………………………30
8
Chapter 1
Background of topic
1.1 Introduction
One of the world’s favorite beverages and a major source of caffeine for many
students and employees, coffee continue to be an integral factor in society’s daily
routine. According to Business Insider, coffee is the second most sought-after
commodity in the entire world, with an industry that is worth over $100 billion
across the globe. In terms of exporting alone, the industry is valued at $20 billion
and continues to be on the rise—on average, 500 billion cups of coffee are
consumed on Earth every year.
9
1.2 Popularity Of Coffee industry In Asia.
The beverage Industry has emerged as one of the most productive sectors in
Pakistan over the years. In this regard, coffee consumption has witnessed
sudden surge thanks to growing popularity of cafe culture especially in posh
areas of cities like Islamabad, Lahore and Karachi. In fact, out of home coffee
consumption has immensely contributed to the increased in-house consumption
as well.
It is also a fact that coffee is fast becoming the beverage of choice for the
people of Pakistan. Again, cafes such as Coffee Planet have played their pivotal
role in making coffee a household beverage especially in the urban areas of the
country. Another encouraging trend that can further help this very industry to
prosper is the stiff competition between local as well as international brands
that are ready to leverage the great opportunity the increasing popularity of the
coffee offers.
Some experts are of the opinion that consumers will particularly benefit from
arrival of new players because they will have more options to choose from. It
should also be an exciting competition because Pakistani brands will have an
edge over famous international brands as they have better understanding of
local market and its unique needs. However, we should not underestimate
international companies as they are well equipped with global best practices.
Many people strongly believe that there is also a chance for all of them to
coexist profitably
10
Our story begins in 1971 along the cobblestone streets of Seattle’s historic Pike
Place Market. It was here where Starbucks opened its first store, offering fresh-
roasted coffee beans, tea and spices from around the world for our customers to
take home. Our name was inspired by the classic tale, “Moby-Dick,” evoking the
seafaring tradition of the early coffee traders.
Ten years later, a young New Yorker named Howard Schultz would walk through
these doors and become captivated with Starbucks coffee from his first sip. After
joining the company in 1982, a different cobblestone road would lead him to
another discovery. It was on a trip to Milan in 1983 that Howard first experienced
Italy’s coffeehouses, and he returned to Seattle inspired to bring the warmth and
artistry of its coffee culture to Starbucks. By 1987, we swapped our brown aprons
for green ones and embarked on our next chapter as a coffeehouse.
Coffee is at our heart, inspiring our craft and driving innovation—in our drinks,
our food, our stores and new ways we bring the Starbucks experience to you
wherever you are.
11
1.6 Problem Statement for Starbucks
Corporate/management opinion
Strengthening our position as an “Employer of Choice” by actively researching,
planning and developing programs, projects and initiatives that help attract
and
retain top talent.
• Re-inventing our approach to human resources so we can better support
Starbucks growth and our business objectives by supporting our
partners;
developing stronger internal communications; upholding our culture
and values;and functioning in a cost-effective manner.
12
Adoption assistance of up to $3,000 for partners who choose to adopt
children.
Bean Stock, our company-wide stock option plan.
S.I.P. (Stock Investment Plan), our discounted employee stock purchase
plan.
Employees opinion
The workers' concerns mostly revolve around understaffed stores and
ingredient shortages
partners leave and working conditions fall to the wayside
Risks of loosing jobs
Salaries not paid on time
Poor working condition
Diversity in employees jobs.
Too much work for very little money
No health services are provided
Not more then 3 holidays in 2 months
1. 1.Functional hierarchy
2. Geographic divisions
3. Product-based divisions
4. Teams
13
Functional Hierarchy
The functional hierarchy feature of Starbucks Coffee’s organizational
structure refers to grouping based on business function.
2.Geographic Division
3. finance department
Starbucks has product-based divisions in its organizational structure. These
divisions address product lines.
4.Teams
Teams are used in different parts of Starbucks Coffee’s organizational
structure. However, teams are most visible at the lowest organizational levels,
particularly at the coffeehouses.
14
Act quickly and decisively
The incident took place on April 16, with #BoycottStarbucks already trending by the end of the
day. Starbucks announced the nationwide diversity training the very next day, and ran the
training the following month.
Be transparent and open to criticism
So many organizations see all criticism - whether it comes from customers or from their own
employees - as entirely negative and something that must be defended against at all costs.
Starbucks saw this incident as a mirror and an opportunity to grow.
The competition analysis from identifying the competitors (current and future
objectives, current strategy, resources available and predicting the future).External
analysis for Starbucks Coffee. Starbucks is the largest coffee hose company in the
world. It is an American global coffee company and coffee house chain based in
Seattle.
15
1.11 Research Objectives
To highlight all the issues in organizations and to bring things in Research
To highlight Important Aspects of society
To bring things into actions
The main political factor is about sourcing the raw materials. This has gathered a
lot of the attention from politicians in the West and from the source countries.
For this reason, the company wants to adhere to social and environmental norms.
It is willing to follow the sourcing strategies. It gives importance to fair trade
practices.
Another impact is the need to follow the laws and regulations in the countries
from where Starbucks buys the raw materials. Activism and increased political
awareness in developing countries have made his essential.
Some other factors to consider are:
1. Tax policy
2. Employment laws
2. Economic Factors
16
The company has to deal with rising labor and operational costs. The inflationary
environment and falling profitability is causing a lot of stress.
Some other economic factors which can affect Starbucks are:
3. Technological Factors
Starbucks is in a good position to enjoy benefits of the emerging mobile wave. Its
partnership with Apple to bring app based discount coupons is helping it ride the
mobile wave easily.
Starbucks is also enabling mobile payments. They are testing this in pilot locations
in the US.
17
Environmental Factors on Starbucks
Many Starbucks business practices concern activists and international advocacy
groups. Even the consumers have expressed issues. So, the company should take
these into account to continue holding consumers’ trust.
Some of the other environmental factors Starbucks should worry about are:
18
Conversely, the problem with most incentive programs like Starbucks is that they
center exclusively on the submission of outcomes and overlook the three beliefs
that are the key to making the motivation solution work:
1.2.2 RELATIONSHIPS
The first conviction compacts with the relationship between employee effort and
performance.
The second compacts with the relationship between performance and outcomes.
And the third compacts with the relationship between outcomes and satisfaction.
These three beliefs form the basis of the belief system of motivation and
performance.
Accepting that these beliefs are decisive preconditions for motivation helps to
explain why incentive programs generally yield such lackluster results like in the
case of Starbucks Since employees do not always hold these beliefs to be true,
attempts to improve motivation by using incentives cannot make the grade, even
when the incentives are highly desirable ones.
19
When an employee believes ‘one cannot do it, for example, one may develop a
lack of self-confidence and begin to experience many of the unpleasant feelings
that go along with it: self-doubt, anxiety, and frustration. About a year into the
change effort, one manager portrayed the inner turmoil one went through by
comparing the restructuring to building a ship at the same time one is trying to
sail it.
1.2.3 Hypothesis
1. Hypothesis H1: “Word of mouth of Starbucks” can be predicted by
interaction behaviors, store perception, trust and authenticity in there
actions against employees
.
2. H2: There is a difference in “word of mouth” between gender.
3. H3: There is a difference in “word of mouth” among monthly allowances.
4. H4: There is a difference in “word of mouth” among people who visit
Starbucks at different stores and experience behaviour and shortage of
resources .
20
Dunkin Donuts has been the first coffee-and-doughnut shop in the United States
when William Rosenberg opened the store in the year 1950 at Massachusetts.
Since 1987, the company has been performing well since its inception with
increased growth each year along with the growth in earnings. The company has
been a pioneer in the franchising format and has developed a sense of urgency in
its opening up of various franchise. However, the company is facing a declined
sales to capital ratio, increase in its competition, and a poor relationship with its
franchise because of having no vision of expanding its operations through
franchising.
Management Opinion
CEO Nigel Travis says that the biggest issue for Dunkin' Donuts franchisees is a
lack of labor. In fact, franchisees in some locations have been able to find only
about 60% to 70% of the employees they need to run their businesses effectively.
To combat this problem, Dunkin' is streamlining its menu to make its stores less
complicated to operate. The company says this will make it easier to train people
to work in its stores and help to reduce labor turnover. In turn, happier and
better-trained employees should also lead to greater customer satisfaction. Still,
as long as the unemployment rate remains low, finding enough good workers to
man its stores will likely remain an ongoing challenge.
Employees opinion
Lower salary
No health benefits
Wants perfections in all the employees
Wrong use of power by corporate level
High work pressure
Risks of loosing jobs
Bad working
21
2.3 Dunkin Donuts Structure
22
The second aspect is an organizational structure (Champoux, 2010). The
structure of Dunkin Donuts is hierarchical in nature. The organization has
top-level executives (including managers and supervisors) and bottom level
executives. The responsibility of top executives is to ensure an effective
flow of information and organizational roles are given to employees with
regard to their skills and capability. Such roles are organized in
departments, including production, accounting, human resource and
marketing among others.
23
2.6 Economic responsibility
organization is the basic economic unity of a society. The responsibility of the
company is to produce the products that the society wants and to maximize the
profits for the company’s shareholders and owners. When economic
responsibility is carried out to the extreme is called profit maximizing view. This
view basically shows that the corporation should be operated on a profit oriented
basis. And its mission is to increase the profits so long that the company within
the rules and boundaries of the game. (Daft 1997)
2.7 Legal responsibility
Defines what the society thinks is important with the respect appropriate behavior. The
companies are expected to fulfill their economic goals within the legal framework. Legal
requirements can be imposed by the local, national and international regulatory services.
Weakness
1. Competition from other international snacking joints means limited market
share growth
24
2. Constant rift with the franchisee owners and numerous instances of suing
them.
3. Still hast penetrated into the emerging economies which can be a huge
segment
Opportunity
1. Increase its presence in newer countries and regions of the world
2. To introduce low calorie snacks
3. Increase in disposable income of people in developing countries
4. Increase its reach through effective online marketing
Threats
1. People moving to healthier ways of eating
2. Competition even from local cafes and bakeries
3. Increase in the cost of raw materials
4. Diificult to change the snacking habits of people in certain countries like India
and China
Political Factors
The political factors in the Dunkin Donuts PESTLE Analysis can be explained as
follows:
Dunkin Donuts is a big brand having several retail outlets spread across the world.
It is said that if you make government happy, then government will make you
happy. So, Dunkin Donuts spend millions of dollars for lobbying with government
to create the positive image of the company. Dunkin Donuts is alleged to have
donated a huge amount to democrats during recent elections.
Economic Factors
GDP, per capita income, inflation and purchasing power parity of a country are
very important factors which can affect the business of any company. The sales
forecast in the American market is not very optimistic as people are getting more
25
conscious about their health now. The rising income of the people in Asian
countries has created a lot of opportunity for the Dunkin Donuts at a time when
the domestic sales is stagnating. Specially China and India are providing a great
opportunity for the company to expand its business as these both countries are
the world’s fastest economy and with the rise of income in these countries, the
eating preference is changing among people which will positively affect the
country.
Social Factors:
Dunkin Donuts thrives of reaching out to societies & people looking to celebrate a
occasion. Companies are rapidly changing the eating preferences of the
customers by making them consume more snacks and ready to eat foods. In
developing countries like China and India, where 20 years back only traditional
foods were considered good, are changing their preferences rapidly and now they
more and more consuming snacks and fast foods. India provides a great
opportunity for the company as 60 % of the population of India which is roughly
around whopping 70 crore is under age of 35 years. Dunkin Donuts Company can
easily wow these age group by introducing different products specifically catering
to their preferences. One problem that is arising that many people nowadays are
becoming more and more conscious about their health and they view these fast
foods and snack detrimental to their health.
Technological:
As there is a high and growing variety of products in coffee houses, they need to
always develop new machines and high- tech equipment in order to stay up-to-
date. Some beverages are so complicated to make that they require high
standards of quality in terms of technology.
• Environmental:
Since a few years, all the coffee houses have taken new measures in terms of
environment. In fact, they all have developed policies in term of recycling,
reducing waste, building green “By building environmentally sound stores and
facilities, conserving the energy and water we use and purchasing renewable
26
energy credits, we’re pushing ourselves to reduce the environmental footprint of
our operations”. Their goal is to ensure 100% of its cups to be reusable or
recyclable
Twitter
Twitter.com/Dunkin Donuts 1.1 million followers 20 posts/week 56.7%
Facebook Facebook.com /Dunkin Donuts US/ 13,907,761 likes 7 posts/week 33.8%
Instagram Instagram.com /dunkin donuts/ 947k followers 7 posts/week 42.5%
Twitter 550,000
Facebook 300,000
Instagram 600,000
The first conviction compacts with the relationship between employee effort
and performance. The second compacts with the relationship between
performance and outcomes. And the third compacts with the relationship
between outcomes and satisfaction. These three beliefs form the basis of
the belief system of motivation and performance.
Accepting that these beliefs are decisive preconditions for motivation helps
to explain why incentive programs generally yield such lackluster results
like in the case of Starbucks Since employees do not always hold these
beliefs to be true, attempts to improve motivation by using incentives
cannot make the grade, even when the incentives are highly desirable
ones.
2.13QUESTIONAIRE
Q1.if you were in charge of dunkin donuts what kind of strategies you would
make for employees?.
Q2. Does Coffee Actually Wake You Up?
28
Q3. Does Coffee Make You Feel Better?.
Q4. Are Coffee Breaks a Productivity Killer?
Q5. Does Caffeine Affect Your Memory?
Q6. Is Drinking Coffee Bad for Your Health?
Q7.How much caffeine is in a cup of coffee?
Q8How many calories are in a cup of coffee?
Q9.How long does caffeine last in coffee?
REFERENCES
https://bstrategyhub.com/starbucks-competitors-alternatives/
https://www.businessinsider.com/starbucks-workers-say-they-arent-true-partners-2021-
9
http://panmore.com/starbucks-coffee-company-organizational-structure
https://www.google.com/search?
q=starbucks+employees+short+attendance&oq=starbucks+employees+short+attendan
ce+&aqs.
https://www.google.com/search?
q=starbucks+vision+Statement&oq=starbucks+vision+Statement&aqs
https://pestleanalysis.com/pestle-analysis-of-starbucks/amp/
https://www.google.com/search?q=dunkin+donuts+problems+&client
%3A1641824023284&ei=Fz_cYbrhEM3MgweThojoBQ&oq=dunkin+donuts+problems+
&gs_lcp=ChNtb2JpbGUtZ3dzLXdpei1zZXJwEAMyBQgAEIAEMgYIABAWEB4yBggAEB
YQHjIGCAAQFhAeMgYIABAWEB4yBggAEBYQHjIGCAAQFhAeMgUIIRCgAToHCCM
QsAMQJzoHCAAQRxCwAzoECCMQJzoICAAQgAQQyQM6BQgAEJIDOgoIABCABBC
HAhAUOgcIABDJAxBDOgoIABCABBDJAxAKSgQIQRgAUKEGWPglYP88aAJwAXgAg
AG4A4gBsx2SAQgyLTEzLjAuMZgBAKABAcgBCcABAQ&sclient=mobile-gws-wiz-serp
29
https://www.locusassignments.com/solution/research-project-starbucks-assignment
https://ccs.instructure.com/courses/1396406/assignments/8717761?
module_item_id=19785567
30