MANAGEMENT OPERATIONS

MANAGEMENT OPERATIONS

                                                   Table of content

Abstract………………………………………………………………………………2 Introduction…………………………………………………………………………..3

PART A-The four v’s Dimension…………………………………………………….4

 Analysis of the performance objective Starbucks and Greggs…………………….5

Design analysis…………………………………………………………………………7

PART B Quality management…………………………………………………………8

Starbucks global operations strategy and surrounding macro-environment……….8

Requirements, capabilities and Key challenges………………………………………..9

Analysis and evaluation of an operational area………………………………………..10

Recommendations…………………………………………………………………………12

Conclusions…………………………………………………………………………………13

References…………………………………………………………………………………….14

                                               Abstract

This give a general overview of the management of operations of the two companies. A comparison analysis is made with the use of the four vs dimensions. The performance objectives analysis is made of the two to show how different objectives influences the performance. When the two analysis are made they give a design shaped by the different dimensions objectives Starbucks outdo. Greggs in performance. Various strategies have been discussed to show how quality management as one of the operation management that define the shape taken in business. Major requirement are given with the capabilities and challenges facing Starbucks. With the given recommendations, Starbucks is believed will do much better.

Introduction

Business growth and sustainability is only realized when there is high product quality, service reliability and management of operations. The objective of this paper is to show how high product, service reliability and good management operations can make all the difference in sustainability and growth of a business. Starbucks and Greggs are the two major business company growing in different management operations. Starbucks was initiated in 1971 from a very humble beginning and has tremendously grown into the world’s largest chain of coffee houses. It take pride in dark roasting the best coffee beans, and selling them to the public. The current CEO spearheading the company is Kelvin Johnson. Greggs deal with one of the manufacturing industry in the UK, majoring in sandwiches, savories and other related products Part A-The four v’s Dimension

The four (4) vs of operational management are volume, variety, variation and visibility. Volume

Refers to how much of a specific product is required to satisfy its demand. Low volume tend to be less repetitive with staff performing more than one task .A high volume easier to satisfy a higher level of demand since the production process is faster due to automated activities ( Agbaje, 2014)Variety is when there is diversification of goods and services to be sold are produced and sold to customer .High variety give company flexibility to produce goods and services to match the customer requirements. Variation refers to how much the level of demand changes over a time period due to external factors. Visibility is how much of the company’s product does the customer actually experience ( Campbell and Helleloid 2016). The service industry has a high level of visibility whereas the manufacturing industry has little to no visibility to its customers

The comparative analysis table clearly illustrate the comparison of Starbucks and Greggs business operations based on different profile. Starbucks have positioned their business in urban centers which are densely populated.(.Agbaje,2014). This creates a high demand that need a high volume to meets the expectation while Greggs has its 2050 modern shops widely in UK .They have a low demand that will require a low volume thus inefficient because of multitasking.

Starbucks deals with premium character in quality management. This have created room for expansion as the coffee is of high demand and through are able to incorporate a wider variety of products( Atzori and Murphy 2018). High visibility is realized as many benefit from the company’s product. Greggs operate with lesser variety of products thus low visibility as customers not able to benefit much from the company’s product.

Starbucks having excelled in coffee industry caused a great demand that led the company s introduce other service that customers are able to benefit from( Silver 2013). This variation came as a result of a premium experience at their stores where one can spend more( (Chua and Banerjee 2013)Greggs have yet to attract many thus no much variation as they have no wider expansion for their product.

Analysis the objective performance of Starbucks and Greggs

Performance objectives include quality, speed, dependability, flexibility and cost. Quality is all about things done right according to the expectation of the clients and it is worth its value. This gives satisfaction to the customers (Agbaje, 2014). Speed is how fast a customer is served after issuing an order, efficiency service to customers will motivate them to always want to be served there( Chua and Banerjee 2013). Dependability is seen in a company when it is reliable, upon request of good or services, no time they are out of stock but deliver upon request. Flexibility is the quality of a company of been adaptable to change to suit the taste of the customers (Silver 2013). Cost is the monetary value of goods and services, a company’s cost of goods and service should be of their level.

Starbucks offers products of high quality that have led to maturity and sustainability of the business. Roasted dark coffee, Starbucks experience and the personnel serving the customers have given the company a high market return while at Greggs low quality of goods and services offered have led to low market return as there is much demand for the product(. Agbaje, 2014)With good returns of market a company work in satisfaction to serve customers in speed as in Starbucks while when customers served slowly upon order of good or services feel demotivated thus no growth at Greggs. Customers will only put their trust where there is solid foundation(. Atzori and Murphy 2018) Starbucks ability to sustain and grow business in 80 countries give room for trust. Many do not depend on Greggs as it is not independent enough to earn trust. The ability of Rogers to re-positioning of the brand to a take away food rather than a take-home bakery have seen Greggs register new outlook( Silver 2013). Johnson ability to diversify the business lead to growth. The cost of production determine the prices of goods and services offered. Starbucks able to maintain their premium character while Greggs have unstable prices of their products due to instability of market thus rising prices low markets.

Design analysis

The work out plan of the customer service process have been influenced by the four dimensions and performance profile. The premium character of the Starbucks product have impacted heavily in the world at large. This has created a high demand of the products which have led to a high volume of production which is faster and efficient( Agbaje, 2014) Many are attracted to trust and shop with them. Gregg’s product are less sold as the quality is low thus low demand leading to inefficiency in the cost of production due to multitasking( Silver, 2013). The Starbucks experience have led to introduction of more variety which has created a high visibility as customer enjoys greatly from the company’s product( Atzori and Murphy 2018) Greggs is yet to be independent in business and many have not yet identified with them as no much quality variety introduced. Flexibility have seen Starbucks dominate in the world market as they are able to adapt to change that come with innovation and technology and this has helped market the product greatly.

The two company both have store several business stalls in different places. The location strategy of Starbucks focuses on urban centers with large middle and upper class populations (Chua and Banerjee 2013). The operation management shows that Starbucks lay emphasize on affluent consumers who can afford its premium priced products. Starbucks cafes are designed to maximize workflow efficiency( Agbaje, 2014) .There is space utilization of tables and seats as it focus on premium customer experience, which involves higher prices for more leg in the cafes( Silver 2013). All these have given Starbucks ability to perform with ease as they are able to maintain high quality at an affordable price to their customer. Customer trust their product as they are independent and flexible.

Greggs Company’s stores are located throughout the United Kingdom. It operates stores in Belgium which saw the beginning of the company’s expansion campaign into mainland Europe( Susanty and Kenny 2015). The company have franchised shops operating in travel and other convenience locations. Having established significant presence in towns and high streets it now have opened more stores in airports and train stations (Atzori and Murphy 2018). This lay out locations have contributed greatly in rising performance as has created more room for expansion which have grown the company. The new opening along the travels have lifted the standards of the company.

PART B An overview of the quality management

Quality management is about overseeing all activities and tasks needed to maintain a coveted level of excellence. It includes determination of a quality policy, creating and carrying out quality planning and assurance, quality control and quality improvement (Chua and Banerjee 2013). Starbucks emphasizes in quality management using premium character. The company sources its products from farmers who are able to the meet the set quality standards by Starbucks.A program that deal with certifying coffee beans qualify farmers to partner with Starbucks. The CEO kelvin have created an amiable atmosphere offer a warm culture ensure premium character are maintained.( Agbaje, 2014) Implementation of high quality by Starbucks is key to ensure they align with the company’s premium brand image. The high quality maintained has created a great demand for the product( Silver, 2013). The high volume is easier to satisfy a higher level of demand since the production process is faster due to automated activities. This reduce the cost of production which lead to service reliability and business growth.

Operational strategy and macro-environment of Starbucks.

The servant leadership of Starbucks has made use of location strategy to respond to the wider business environment. It focuses on urban centers, those with large middle and upper class populations. The cafes are in the densely populated areas. Clustering of the cafes strategically drive away competitor( Atzori and Murphy 2018)They also target the high-visibility locations within a settings for instance downtown, office building, University environs and off highway location. This has helped the company earn a significant competence and advantage where they are able to get through to the prime market( Agbaje, 2014) The stores are appealing and have a cool effect meant to reflect the unique character of the people they serve and environmental friendly( Tsai and Su 2020). Provision of free Wi-Fi, cool music, wonderful service, warm atmosphere and environment of the community meeting spot which the wider Starbucks’ experience. This has ensured the high quality product and service reliability are maintained.

The layout design of Starbucks cafes maximizes workflow efficiency. The servant leadership who spearhead the company’s organizational culture work towards a warm and ambiance friendly( Atzori and Murphy2018) .This  strategy do minimize space utilization for tables and seats for Starbucks focus on premium customer experience, that involves higher prices for more leg space in the cafes. Customer experience over space utilization is what Starbucks prioritizes in. The company’s broad differentiation generic strategy with its premium pricing strategy link the premium character. The company lay much emphasize on the premium design for its goods and services( Agbaje, 2014)Some firms like manufacturers involve themselves in designing some goods like Starbucks plate. Starbucks ensure its goods and services reflect the firm’s high-end brand image. This greatly show the pride they take as a company which also part of reaching out(Chua and Banerjee 2013.Starbucks also embarks on process and capacity efficiency which is a key contributor to its success. There are highly efficient processes observed in the cafes of the company. Starbucks make maximum use of capacity and capacity utilization by coming up with process to meet variation in demand( Atzori and Murphy 2018). There are flexible processes to change personnel to a sudden increase in demand during peak hours. Starbucks optimizes cost-effectiveness by efficiency of workflows and processes.

Requirements, capabilities and Key challenges

There major requirements that need to be met in the course of striving for quality management operations. Starbucks should ensure there competent employees who will provide quality services. In order for customers to be satisfied and to build a relationship with them. Offering quality service is important because it result to greater income and satisfaction, entitles to gain new customers and help improve the name of the business( Agbaje, 2014). Customer satisfaction should be ensured by producing high quality products, must be renewed with every new purchase( Tsai and Su 2020). Three should be constant research and analysis by marketers to keep abreast of important trends. There should be an assessment of the service quality management which can be of help for improvement (Atzori and Murphy 2018). In assessing the service quality management the researchers should use the five dimensions reliability, responsiveness, assurance, empathy, and tangibles of service quality in order to determine its effectiveness.

Human resource offer immense ability to the growth of a company. Starbucks is marked for its highly base employees who are the main asset of the company (Chua and Banerjee 2013). Starbucks provide its people with great benefits like stock option, retirement accounts and a healthy culture. Starbucks have all along purchased locally got supplies and ingredients which help to maintain a high standard of product despite the nation or city ( Agbaje, 2014) This has a great benefit in maintaining a strong relationship with suppliers in the community and this also stimulate growth of other business( Tsai and Su 2020)  .Sustainability initiatives is achieved Physical asset are maintained through employees trained for maintaining facilities and equipment( Susanty and Kenny 2015).Physical facilities, equipment, personnel, and communication materials appearance is tangible evidence of the care and attention to detail that are exhibited by the service provider. Service is intangible and the tangible must give the customers an impression about the quality of the company( Chua and Banerjee 2013). Challenges are experienced at Starbucks. For instance, increased competition from its competitor who are offering their product at a cheaper price compared to Starbucks. Volatility of prices in the global market due to the decline in the market prices of coffee and Starbucks have no control over it. Maintaining of the high quality a challenge.

Analysis and evaluation of chosen operational area

Starbucks have a strong market position and global recognition. Through this the company has been able to gain a significant competitive advantage in expanding into international markets and also register higher growth in domestic and international markets. This has led to self-cannibalization through overcrowding which is diminishing long term growth targets of Starbucks( Atzori and Murphy2018). The company has merchandised its products and licensed its brand logo out. Starbucks trade with products of highest quality and take pride in that when they did decide not to standardize their quality even for higher production ( Agbaje, 2014). During period of economic sluggishness, consumers tend to switch costs to competitor’s products with lower prices and do away with the premium. This leave the company at a loss for a period.( Chua and Banerjee 2013). Starbucks location and its aesthetic appeal of its stores has made it possible to target the premium, high traffic and high visibility location, has earned the company a great competence and advantage to be able to penetrate prime markets and get into customers convince factor( Susanty and Kenny 2015). The stores are visually appealing designed to create a friendly environment. They have free Wi-Fi, great and have an environment of community meeting spot which forms a wider part of Starbucks experience, great service and warm atmosphere.

There is negative large corporation image as a result of Starbucks been under increased scrutiny and this has had a negative impact in the market a time ( Tsai and Su 2020). They do invest in corporate social responsibility, activates and maintain tight control over labor practices. There is coffee culture clash of their coffee with those international expansion strategy. Human resource is the main asset of the company and are provided with great benefits like stock option, requirement accounts and a healthy culture (Agbaje,2014.) A good management of human resource translates into great customer services. A good supply chain means everything when well maintained by the quality control ( Susanty and Kenny 2015).Starbucks coffee’s supply chain is global despite majority of beans coming from developing countries. There is need for diversification of suppliers to ensure stability of supply. Starbucks uses its coffee and farmer equity (CAFÉ) program to sort out and prioritize suppliers. To avoid instability of supply incorporates ethics and corporate social responsibility so as to retain efficiency ( Tsai and Su 2020). Starbucks despite having many thousands coffee shops operating in almost the whole world. It use one centralized system to manage its supply and logistics network.

Starbucks oversees many global distribution centers located across the world. This ensure consistency with every single bean that get prepared, produced and packaged among the hundreds of thousands of pounds processed daily( Atzori and Murphy 2018). To man a small number of distribution centers means fewer concerns over quality control when to review and monitor a lesser number, the less likely will those fail to comply with company- wide quality standards. Starbucks has created strong ties with the customers operating within the business as the consumers (Susanty and Kenny 2015). They have a cult following status among consumers and they have also implemented loyalty based-programs so as they can drive loyalty with the Starbucks Rewards programs and Starbucks card  (Agbaje,2014)The card provides convenience, support gifting, raise how often one visits the store. Servant leadership approach help one to bring people together and see them grow( Tsai and Su 2020). Starbucks make use mobile outlets   and use technology. The company have also ventured in the technology advances Starbuck app.This has been a great support when the company is experiencing a loss due to a natural calamity. It has created a use process for customers, aligns customer loyalty through rewards programs. Starbucks having already advanced in technology which is a growing field and would drive more business to their stores (Campbell and Helleloid 2016) Of late Starbucks is selling its packed coffee products, iced beverages and merchandizes through large box retailers a potential of the market that have not been realized. This is showing a great opportunities for the future to future their value of the brand.

Recommendations

Following are the recommendations

Starbucks has already made a great name in the world market leaving behind the middle class population ( Tsai and Su 2020).  The company should venture into the areas undiscovered potential growth in the market. This should grow in the emerging markets by winning locally( Atzori and Murphy2018). Starbucks should get to be relevant to the customer by tailoring to the store format, have local product mix and price points to the needs, lifestyles and taste of each individual community. Thus instead of customer switching to the coffee that favors their pockets, Starbucks should package sizeable coffee to meet the needs   of the individual community.

Starbucks should make a transfer of its core competencies and capabilities country to country and slowly put profit drivers in different country as it continues its global expansion in an organic way( Campbell and Helleloid 2016) Starbucks should make use of the advantage of the great growth opportunities it has with Tea and Fresh Juice products mix. Building up these products along the same line of their core coffee products. There have been fluctuations in the market prices of the high quality coffee beans which are of significant input in Starbucks value chain ( Campbell and Helleloid 2016) Starbucks should implement an effective hedging strategy like future to contracts to lock in their estimated quantity input at a low swing price so that the future costs can be managed to a great extent by this there will be mitigation of the price volatility risk.

The saturated U.S. market should focus on getting an additional penetration into untapped rural markets as its growth strategy( Tsai and Su 2020) Starbucks should build better relationships with a big box retailers to have premium shelf space and increase the ease of the distribution channel. There is little done in the advertising and marketing initiatives in the face of increased competition in the market( Atzori and Murphy 2018). Starbucks should make significant investments in advertising and marketing initiatives in the face of increased competition in the market. Customer loyalty should be build and retained by building on better concept on the go home delivery. The mobile apps business should be empowered to ease stream lining and payment process.

Conclusions

The report has by and large discussed on operations of the two companies. Four vs dimensions of the operation management are used to illustrate their influence in the analysis comparing the performance of the two firms. The performance objective analysis of the two company are discussed bringing out how their performances is influenced by the various objectives: costs, quality, flexibility, dependability and speed. A layout analyzing is drawn from the dimensions and the performance objectives showing how the different company have been shaped to the different layout A look on  management overview of Starbucks quality is clearly illustrated. Global strategy of the operations and their influence on the macro-environment is examined. Major requirement, potentials and problems of the quality operation management of Starbucks are discussed. There is an analysis and evaluation on quality management operations of Starbucks. Recommendations help a great deal in growing of an institution.

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