Operations Management and Service Excellence

This document explores the concepts of operations management and service excellence in the context of Starbucks. It includes a four Vs analysis, performance objectives analysis, and design analysis. It also discusses the global operation strategy and surrounding macro environment of Starbucks.

Operations
Management and
Service Excellence

Table Of Content
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
1. Four Vs Analysis.....................................................................................................................1
2. Performance objectives analysis..............................................................................................4
3. Design Analysis.......................................................................................................................7
PART B...........................................................................................................................................8
1. Overview..................................................................................................................................8
2. Global operation strategy as well as surrounding macro environment of Starbucks..............8
3. Key requirements, capabilities addition to challenges............................................................9
4. Analysis addition to evaluation of selected operational area.................................................11
5. Recommendations..................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Operation management is mentioned as multidisciplinary functional area that designs and
controls production practices together with redesigning businesses practices while manufacturing
commodities or services. Similarly, Service excellence is said to the ability of business to
consistently fulfil and manage expectations of clients (Annarelli and Nonino, 2016). To
understand operation management along with service excellence, Starbucks is selected that is a
coffee company which operates globally for serving huge customers on daily basis. The
headquarters of the institution are settled at Washington, United States. It is a coffee house chain
which offers coffee beverages, naked commodities, sandwiches and variants of tea to customers.
The present assessment is based on 2 parts where in Part A includes Four Vs analysis
among two companies, performance objective analysis and design analysis. On other hand, Part
B includes overview of operational area along with scope, organisational global operations
strategy as well as surrounding macro environment, key requirements, capabilities addition to
challenges. It also includes analysis and evaluation of selected operational area along with few
recommendations to improve aspects of business operations.
PART A
1. Four Vs Analysis
In operation management, essential elements of procedure that are affiliated to
transforming raw materials towards polished commodities are categorised in four aspects that are
variation, visibility, volume addition to variety that plays significant aspects in acquiring
effectiveness within business operations (Bendoly, van Wezel and Bachrach, 2015). The
statement is correctly said that all business required to posses common components such as
materials, financial resources, instruments and many more for effectively executing
organisational operations. The analysis efficiency can be offered in relevance to two distinct
organisations that are Starbucks along with Greggs.

The 4Vs simply include the dimensions such as Volume, Variation, Visibility along with
Variety that has function of systematically executing activities through transmitting raw
materials towards final usage products. Following are the explanation of each dimension:
Volume: The dimension is related to physical quantity of entire commodities that are
produced within company. All successful business delivers immense choices addition to
maintain customer taste by providing them high volume through compensation commodity cost.
Variety: Dimension of variety is concerned with maintaining variants level in whole
procedure of productions. It represents the variants that all businesses offers to accommodate
diverse population needs.
Variation: Dimension of variation is related to slight differences or random variables
which are maintained within offerings of entity (Campbell, Reyes-Picknell and Kim, 2015). It
generally includes standardisation addition to customised product designs which a company
serves to meet requirements of market.
Visibility: Visibility dimension states how much of organisational procedures does client
actually experiences. It mainly comprises customers’ role in context to tracking orders as well as
gains personalised experience. It results in delivering enriched experiences to the audiences.

Distinguish basis Starbucks Greggs
Volume In context to Starbucks, it serves
high quality commodities and its
variants of coffee and other
products has high demand by
population of whole world. It
produces approximately 75000
cups or glasses of coffee in an
entire week with high quality
standard production practices.
The entity have desire for forming
developments within their
manufacturing procedures as to
maximise profit level so that they can
enhance their shares and margins of
revenue. The demand for commodities
offered by Greggs is comparative
higher than that of Starbucks as it
offers huge variety of commodities
and generates mass volume of
production.
Variety Starbucks offers limited variety in
its products. The organisation is
well popular for serving coffee
and it only concentrates on
offering high quality of coffee.
Other than this, it also offers some
variety of smoothies, baked
commodities, teas and sandwiches
in the market (Cook, 2017).
Variety of commodities that are
offered by Greegs are highly
competitive in nature as wide variety
of products are offered to the
customers. Some of them includes
doughnuts, pies, pastries, sausage
rolls, sandwiches, vanilla slices along
with huge variety of other baked
products.
Variation In context to Starbucks, coffee is
one of highly demanded product
within which huge types of
variants are found at its locations.
As Greggs mainly deals to offer
savoury products in which it has less
variations as the variety offered is
generally more. At the time of
weekends, the organisation enjoys
higher sales.
Visibility In Starbucks, practices and
procedures are visible to the
customers when they place orders
In context to Greggs, the entity has
corporal stores wherein savoury
commodities are offered in

for the commodities that are
offered at its distinct locations. Its
customers observe partial process
at its open counter which adds
huge values within its diverse
services.
conventional methods. Procedures that
Greggs follows are less visible to the
customers as most of its commodities
are only displayed at its outlets.
Customers fail to determine the actual
manufacturing procedures of the
company.
2. Performance objectives analysis
In order to determine differences among performance objectives of Greggs along with
Starbucks, the polar diagram is as formed:
Figure 1: Polar Diagram, 2019
In the above diagram, dotted line in red colour represents Starbucks and the other non-
dotted maroon colour is for Greegs. These both businesses have distinct status and market
position and also significant for both to maintain the five element that are speed, cost effective,
flexibility, dependability and quality (Copacino, 2019). The concept of polar diagram is said to
the tool through which relative magnitude of two distinct qualities or attributes are depicts
promptly. With this tool, an organisational manager matches strategies as per the needed core

knowledge addition to skills so to facilitate performances and efficiencies. Description of the
elements is underneath:
Cost: It is mentioned to the monetary amount which enterprise spent for producing
commodities. As per cost objective, all organisations have aim for selling all their commodities
in cost effective manner so that they can maximise their sales volume and level of revenues.
Speed: It is time taken by business in manufacturing and delivering commodities to the
end customers. With this, companies set the objective of delivering their commodities so to
generate the sales with speedily manner.
Dependability: It is related to being trustworthy addition to reliable (Gómez, Martínez
Costa and Martínez Lorente, 2017). The element is associated with operational performance
wherein it is examined that a business is mainly dependent on cost together with prices when
delivering commodities to customers.
Flexibility: It is the ability of company to modify the products with easiness. In other
words, business ability for responding towards changing circumstances addition to coping with
changes in preferences of customers for their offerings. It states the flexibility level that is shown
by firm on operational activities. When it is high it leads to good performance and on other hand,
if it is low then it impacts negatively on entire business.
Quality: Quality is defined as extent of product excellence that is measured against
another commodity having similarities in kind. It measures potentiality for offering best quality
commodities as per customer requirements.
Following is comparison among Greggs and Starbucks as per the elements of performance
objectives:
Differences among
performance objectives
Starbucks Greggs
Cost effectiveness In context to Starbucks, cost
effectiveness is generally high
as the entity sells its products
on the basis of customer
buying capacity (Gong, 2015).
Cost effectiveness of Greggs is
primarily low as the firm only
targets population that belongs to
upper class. So the product cost is
high that are only affordable by
upper class population.

Dependability The sales addition to time that
is involved in product delivery
depends on quality along with
cost. Hence, dependability
level of Starbuck is high.
In context to Greggs, its sales and
time of delivery are more
dependent on suppliers as the
material that the entity needs to
produce bakery commodities are
taken from suppliers at predefined
cost together with price.
Speed Speed to deliver products of
Starbucks is lower than normal
as the firm has higher
dependency level.
The speed to deliver products is
high at Greegs as it provides
products just after getting the
orders as it offers ready to serve
products that only needs final
touch prior to serving.
Flexibility In Starbucks, the flexibility in
its operations very low as it
fails to adopt sudden changes
that impact its volume of sales
and income due to inability to
modify operations in limited
duration.
Flexibility within adopting
changes is high at Greggs as the
managers carefully forecast the
emerging trends or the
circumstances so that proper
decisions are taken on time for
modifying operational practices.
Quality Starbucks is popular for
providing high quality
products in context to coffee,
sandwiches and many more as
the business uses effective
production systems which
ensure maintaining quality
standards.
The items of Greggs are not up to
required quality as less advanced
techniques and systems are used
in making the bakery
commodities and major emphasis
is given on product availability by
managers (Heizer, 2016).

3. Design Analysis
Design analysis is considered as a systematic process which is used by business
organisation to develop a design. This helps to increase the organisational productivity and
profitability by maintaining information, communication and system. This increases operation of
business organisation by performing business activities in well manner.
Influence on design of customer service process
Starbucks – In Starbucks, management are performing their business activities in well
manner as 4Vs and performance objectives of such organisation attract the customer services
with the help of process design (Hill and Hill, 2017). This influences in positive manner as they
understand the needs of people and make efforts to complete their task through effective design
of customer service. This helps to maintain the flexibility in operations by keeping systematic
orders and deliver coffee as per their needs which make happy customers and increase the
business activities by increasing number of customers. This also uses high end technological
process in their organisation which helps in production and delivery of coffee that adds value in
customer service of business organisation.
Greggs – This organisation mainly emphasis on availability of products that helps to
attracts customers and increase the designing process. This main object of organisation is less
dependency on suppliers for raw material and finished goods that increases the delivery of
products and services. By using effective designing process management of such organisation
operate their business successfully through less flexibility in business operation and modify the
products and services as per customer demand that makes more effective service process.
Impact on design of store layout and flows
Starbucks: Store layout that Starbucks has is well designed that aids in properly
maintaining effectiveness among all the operations. According to production procedures,
machines are placed at distinct locations so that coffee or other commodities are delivered to
customers in minimum time. In addition, the company provides variations in its coffee taste
according to changes in the season and customer preferences (Jaca and Psomas, 2015). The
entity provides huge spacious sitting options to the people who visit its locations to experience
thee products.

Greggs: The management team maintains effective store layout wherein the products are
displayed at big screens and assist customers to make choices about what to purchase. In
addition, the administrative team handles trading of bakery commodities through online addition
to offline platform so to maintain flow of products in the market (Torfing and Triantafillou,
2016). All these are important as to acquire rival advantages and overall development
opportunities.
PART B
1. Overview
Key operational area in context to Starbucks is associated with planning and control in
which major emphasis is given by the administrators so to put into practice all the business
activities effectively. Scope of planning and controlling among operations of Starbucks is quite
high as it helps business to realize competitive benefits above competitors as well as conquering
growth on time together with control activities so to sustainability in market. Planning and
control helps in setting benchmarks for the achievements and implementing strategies at the time
any deviation arises (Kerzner, 2018). In context to Starbucks, its performance is sprightly link
with planning and control aspect of the entity as it contributes more in achievement of high
operational performance as all the strategies and plans are planned in advance and controlling is
done through set standards that help in acquiring competing beneficiaries in market that leads in
generating more revenues. The key operational area assists Starbucks managers for improving its
performances in continuous manner that reduces chances of occurrence of uncertainties and
controlling negative outcomes.
2. Global operation strategy as well as surrounding macro environment of Starbucks.
Starbucks is leading institution in coffee industry and has undergone ongoing
development in preceding years. The global strategy of Starbucks is business expansion in
multiple places through introducing innovative and unique confectionary items across the world.
Through this strategy, the entity managers have planned to confine large shares of dynamic
market. Operational area of planning and control plays vital role in forming guidelines,
procedures, benchmarks and many more aspects so to execute the strategy and achieving
outcomes systematically so that all the uncertainties are pre forecasted and planning are done in
advance to control them (Laudon and Laudon, 2016). Macro business environment influences the

strategies of the company to great extent. To analyse influences of macro and business
environment, PEST analysis is best option. The discussion of the elements which are part of
PEST analysis in context to Starbucks are the followings:
Political: Elements such as political party instability, corruption level, employment
legislations and governmental policies are political factors. All these influences internal strategy
of Starbucks as it becomes quite impossible for administrators to modify their policies and
practices as per political environment of particular nation where they carry forward the activities.
Economic: Business cycle, investment values, exchange rates and economic market
environment are some economic factors. The labour rates in various nations is rising that
influences Starbucks’ global strategy as it fails to purchase materials from such countries
because of huge cost involvement.
Social: Career distribution, religious orientations, ethnicity, economic status and purchase
behaviour are social elements that play significant aspect in influencing organisational
international strategy (Thompson, Strickland and Gamble, 2015). For instance, in USA addition
to Europe, family patterns are rapidly changing those results in huge modifications among
consumer preferences that influence the strategy of expansion as Starbucks needs to offer
confectionary products as per customer attitudes at distinct locations.
Technological: Technological awareness and innovation automation level are part of
technological elements. In present, the availability of coffee machines for household usages are
increasing massively that influences international strategy of the firm as it impacts on sales
within technological advanced nations.
3. Key requirements, capabilities addition to challenges.
To perform operational functions of planning and control it is vital for managers of
Starbucks to properly analyse key requirements together with capabilities in order to properly
carry forwards tasks (Mahadevan, 2015). All these can be analysed through VRIO model. The
elements of the model in perspective to Starbucks are the followings:
Capabilities Valuable Rare Imitable Organised
Market research ✓ ✗ ✗ ✗
Skilful manpower ✓ ✓ ✗ ✗
Suitably managed ✓ ✓ ✓ ✗

actions
Timely`
modifications in
course of action
✓ ✓ ✓ ✓
Analysis: The above VRIO analysis table determines that the major requirements along
with capabilities in context to planning and control are skilful manpower, timely modifications
within actional courses and market research. All these are valuable for Starbucks as with all these
the management team formulates suitable decisions for organisational betterment. Among all,
market research do not falls under rare category as it is conducted by all firms so to collect
suitable information about the market (Slack, 2018). Other all capabilities and requirements are
rare as the managers do not focus more on all them. In context to skilful manpower, they are not
imitable because rivals of Starbucks like Costa Coffee, Greggs and many more posses
experienced, competent, knowledgeable and competent employees. Suitable managed actions
and timely modifications within action courses are imitable for Starbucks as others cannot copy
them. The capabilities or requirements of the firm that are organised are timey modifications
among courses of action as management team emphasis on modifying policies according to latest
changes that occurred in business environment so that all the business goals are achieved on
predetermined frame.
Starbucks has also faced few challenges along with problems (Nicholas, 2018). They can
be understood with underneath points:
 One of essential requirement to carry forward planning and control in concerned to
operations is market research and Starbucks fails to implement research activities in
systematic way that resulted in lack of required and significant data so to devise
decisions.
 The other challenge that was faced by Starbucks is lack of competent, experienced,
skilled and productive manpower because of which the entity was unable to plan and
control operations.

4. Analysis addition to evaluation of selected operational area.
Starbucks managers manages its resources and capabilities in well proper manner so to
attain long term organisational objectives that are engagement with customers and manpower,
profit maximisation and productivity. For this, timely modifications in action courses, market
research, skilful manpower and suitable managed activities are some capabilities and resources
that executives of the business manage properly for executing all operations on time. All these
are planned together with controlled by administrators so to ensure that the efforts and practices
lead in accomplishing higher competitive beneficiaries to the business.
In order to manage essential requirements addition to capabilities in operational area of
planning and control, it is crucial for the entity to gather detailed information about the resources
for performing operational tasks. Later, all are gathered so that plans for executions are devised
by market leader within coffee industry (Rocha-Lona, Garza-Reyes and Kumar, 2017). Within
selected operational area, requirements and capabilities are managed through continuous
checking them and framing efforts for necessary arrangements to run entity operations.
All capabilities and requirements impacts operational performance at some of other level
as their availability ensures systematic execution of set activities effectively. In contrary, lack of
them results inappropriate execution that impacts negatively on operational performances. When
management team makes efforts for arranging capabilities and required things including suitably
managed activities, market research, timey action modifications and market research to plan and
control deviations that impacts positively on improving entire operational performances.
To respond for problem or challenges those are non-productive and unskilled staff
members, improper market research and many more that are faced by company like Starbucks.
Some of the suitable practices that could be taken by the organisational members are underneath:
 Management association of Starbucks could initiate activities concerned with planning
and control so to conduct practices of market research in proper manner. With this all the
signification information that is needed for formulating future strategies could be
congregated and challenges could be responded accurately.
 Starbucks has also faced problem of lack of skilful manpower that affect business
objectives of productivity, profit maximisation and staff engagement (Schwarz, Hall and
Shibli, 2015). In order to respond to the challenge, managers of Starbucks could perform

all recruitment and selection practices in prompt manner that will assist in hiring skilled
candidates and challenges are responded with correct aspects.
To respond towards challenges that are faced by the members of Starbucks could adopt
suitable theory or framework that is strategic planning. This will assist managers to define
objectives, decisions along with directions systematically. With this theory, the company may
lead towards success as it helps in managing all requirements together with capabilities
thoroughly. Top administers by using the theory analyses capabilities strategically and searches
best ways for fulfilling all their needs. In addition, strategic planning also helps in determining
resource allocation within each department that are liable to accomplish goals (Ross, 2015). The
reason behind using the theory is to determine that the set strategies are successfully achieved or
not. The theory directs managers at all organisational level to search appropriate manner within
which the resources are administered appropriately such that all operational practices are
performed to achieve objectives in successful way. In Starbucks, application of strategic
planning theory will guide managers to manage resources of suitable managed activities, skilful
employees, timely modifications in actions and market research for reaching prearranged growth,
profitability and other objectives punctually.
5. Recommendations.
In order to improve operational areas concerned with planning and control, executives in
Starbucks can capture diverse steps that can aid them in outlining suitable alterations within
some of the strategies that are shaped for the particular operational field. Few of
recommendations to administrative team of Starbucks are underneath:
 Examining actual organisational position: One of the recommendations to top
administrators of Starbucks is to examine its actual position in competitive market prior
to devising plans and practices as it will benefit them to implement them effectively.
With this recommendation, managers will search suitable strategy that are needed for
implementations so to gain effectual results in future and enhancing organisational
performance to great extent.
 Communicating formulated plans with manpower: To the administrators it is also
recommended to properly communicate set plans with all manpower so that they can
share their viewpoints, opinions or thoughts for the same such that all necessary changes
are made on time. With application of the recommendation, administrators of Starbucks

sp that they can emphasise on manpower thoughts and are able to plan with control
activities with precise support of manpower.
CONCLUSION
The above discussion concludes that managing operation is one of necessary activity that is
managed by all business. There are various concepts that are critical functions that no company
affords to ignore as with these a business properly manages daily activities, make optimum
resource utilisations, facilitating cost savings and winning clients behaviour in fierce
competition. With the 4Vs, it assist entities to devise accomplishments for the objectives as
effectively as possible. To perform comparative performance objective analysis among two
entities, Polar Diagram can be utilised. With the operational area of planning and control, all the
activities are properly planned addition to control so that achievement of objectives becomes
easy for the members. At the time of identifying key capabilities along with requirements, an
entity should opt VRIO analysis framework and for responding towards challenges and problems
that a business faces, theory of strategic planning suits best.

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