Section IV Operational Management Strategies
1. Starbucks’ Response Strategies
During COVID-19, Starbucks had to completely reimagine its store formats. The
traditional sit-down cafés quickly became impractical because of the new safety needs
and shifting customer behavior. The Operations Management must react. They rapidly
modified store layouts by expanding drive-thru access, adding curbside pickup, and
launching pickup-only locations, especially in high-density areas. According to CEO
Kevin Johnson, this transformation was not temporary. It marked the beginning of a new
operational era focused on customer convenience and flexibility (QSR Magazine, 2021).
The company also relied on real-time dashboards to track COVID-19 case numbers at
the county level, helping managers make data-informed decisions about hours, layout,
and staffing.
2. Supply Chain Adjustments
Regarding the supply chain, there were challenges like delays in logistics and material
shortages. Starbucks responded by increasing buffer stocks. We found that they
strengthened relationships with alternative suppliers, and built more flexibility into their
supply chain. The company disclosed in its 2021 10-K that labor shortages, port
congestion, and increased freight costs had a material impact on its operations.
they also locked in coffee prices for 14 months, and used AI to prioritize high-demand
items like holiday merchandise.
3. Service Delivery Innovations
To maintain customer access, something must be done to face the new situation.
Starbucks scaled mobile ordering, contactless payment, and delivery through
partnerships. By mid-2021, drive-thru made up 47% of U.S. sales, and mobile ordering
accounted for 26% (QSR Magazine, 2021). This shift allowed Starbucks to meet
customers "where they are" a key theme of their pandemic recovery strategy. In areas
without drive-thru options, new store models focused solely on pickup or curbside were
rolled out. These innovations supported customer safety and convenience during
lockdowns and beyond. Starbucks doubled down on app-based ordering, with rewards
members driving 51% of sales (Klein, 2021).
As part of the careful reopening of Starbucks stores across Europe, the Middle East,
and Africa, Starbucks held extensive trials on new and safe ways to reintroduce
reusable cups. After rigorous testing, Starbucks was excited to introduce a new
procedure which allows customers to once again use their reusable cups with
confidence.
4. Workforce and Work Environment
Starbucks prioritized partner care, offering hazard pay, mental health support, and paid
leave. The company accepted short-term cost increases to uphold its employee-first
culture.
the majority of its workforce in 2021 was hired in the previous 18 months. It was a need
for ongoing training and support.
5. Technology and Automation
Starbucks accelerated its use of artificial intelligence and digital tools during the
pandemic. It used AI to help with staffing, store protocol planning, and inventory
forecasting. The mobile app saw significant growth as customers turned to remote
ordering, and Starbucks continued investing in these platforms for future resilience. the
mobile app and loyalty program, now exceeding 24 million members, helped the
company personalize offerings and track trends. New espresso equipment also
improved consistency and speed, essential for drive-thru and pickup efficiency.
Dunkin
B. Dunkin’s Response Strategies
1. Store Operations
While many competitors, including Starbucks, temporarily closed a large portion of their
locations in the early months of the pandemic, Dunkin’ made a strategic choice to stay
open wherever possible. CFO Kate Jaspon explained that when “our competitors
decided to close, we decided to stay open,” which not only allowed Dunkin’ to maintain
a presence in its existing markets but also gave it the opportunity to attract new
customers, especially in regions where it was still building brand awareness (Restaurant
Business, 2020). This decision paid off in unexpected ways. In newer markets,
customers who had previously seen Dunkin’ as primarily a doughnut shop were
introduced to its expanding beverage lineup, including espresso-based drinks and oat
milk offerings, often for the first time.
2. Supply Chain Consolidation
Before COVID, Dunkin’ had signed a long-term supply chain agreement with National
DCP, consolidating regional systems into a national network. Thanks to that agreement
Dunkin’ was able to ensure more consistent pricing and service levels during the
pandemic. Though not immune to global supply disruptions, this consolidation provided
some cushion and improved the operational efficiency and cost control (Supply Chain
Magazine, 2020).
3. Lean Service Delivery
Dunkin’ shifted more to drive-thru, delivery, and mobile orders. Though it was already
structured for grab-and-go service before the pandemic. Its franchise model gave
operators the freedom to adjust based on local regulations and customer preferences.
The reduced reliance on dine-in services gave Dunkin’ a small structural advantage.
4. Workforce and Work Environment
Dunkin’, relying on franchise operations, had less control over individual store labor
practices. This means that the response to staffing challenges varied by location, with
fewer centralized employee benefits.
5. Technology and Digital Tools
Dunkin’ used digital tools more conservatively. They focused on simplified app ordering
and loyalty integration but with less backend automation or AI innovation.
Comparative analysis
IV. Operational Management Strategies – Comparative Analysis
The COVID-19 pandemic tested the operational agility of Starbucks and Dunkin’ in
distinct ways, and it revealed how different business models and Operations
Management adapt under crisis.
Store Operations and Layout
Starbucks, whose café model is the in-store experience, had to rapidly adjust when
government restrictions limited indoor seating. The company temporarily closed
thousands of locations in early 2020, keeping only drive-thru and select pickup stores
open. Over time, it introduced pickup-only locations, expanded curbside service, and
redesigned store layouts to support mobile orders and reduce customer contact. In
EMEA markets, Starbucks used a phased reopening approach tailored to each
country’s regulations, reopening stores gradually as conditions improved while
maintaining strict partner (employee) safety protocols (Starbucks Stories EMEA, 2020).
Dunkin’ took almost the opposite approach. When competitors like Starbucks closed
large numbers of stores, Dunkin’ made the deliberate choice to stay open wherever
possible, especially in drive-thru-equipped locations. This move not only kept regular
customers served but it also attracted new patrons who had previously gone to closed
competitors. CFO Kate Jaspon credited this decision with introducing Dunkin’s
beverage lineup to customers who once viewed the brand primarily as a bakery
(Restaurant Business, 2020).
Supply Chain
Starbucks faced significant supply chain disruptions in 2020, including delays in
logistics, packaging shortages, and freight cost increases. In response, it added new
suppliers in order to boost production capacity for high-demand items, and increased
inventory buffers to prevent stockouts. The company also locked in coffee prices and
leveraged AI-driven forecasting to prioritize key menu items during volatile demand
cycles.
Dunkin’s supply chain resilience stemmed partly from timing, just before the pandemic,
it had consolidated procurement and distribution through National DCP, a single national
partner. This streamlined structure gave them more consistent pricing and delivery
during the crisis. And its decentralized franchise system meant that local operators
could adjust sourcing or menu items more flexibly if disruptions occurred.
Service Delivery
For Starbucks, service delivery transformation was central to its pandemic strategy. By
mid-2021, drive-thru represented 47% and mobile orders 26% of U.S. sales, as
customers shifted toward contactless experiences. Starbucks also invested heavily in
delivery partnerships and AI tools to optimize order flow, staffing, and pickup timing.
Dunkin’ already operated with a grab-and-go and drive-thru, so its challenge was less
about transformation and more about maximizing existing advantages. It streamlined
operations, improved mobile ordering, and expanded curbside pickup where possible.
While its digital ordering and loyalty program grew, it remained less integrated into
operations than Starbucks’ systems.
Demand Forecasting and Capacity
Starbucks deployed real-time dashboards to track COVID-19 cases and local
regulations, adjusting store hours, staffing, and menu offerings accordingly. This
initiative opened ability to target and forecast capacity reallocation, especially toward
suburban locations with strong drive-thru demand.
Dunkin’ organized its capacity through maintaining open stores in high-traffic and drivethru locations. It also scaled back operating hours where traffic dropped. Its franchisees
could make rapid local adjustments without waiting for corporate approval, which in
some cases allowed faster adaptation to local demand changes.
Overall Strategic Posture
Starbucks approached the pandemic as a catalyst for reinvention, using the crisis to
accelerate long-term plans for digital growth, new store formats, and advanced
analytics. Dunkin’ approached it as an opportunity for continuity and market capture,
keeping its network running, leveraging its drive-thru dominance, and introducing its
beverage lineup to new customers. Starbucks’ strategy required heavier investment and
structural change; Dunkin’s strategy was more about operational discipline and making
the most of existing strengths.