Operation Management and Service Excellence

This study material provides an in-depth analysis of operation management and service excellence. It covers topics such as comparative analysis, performance objectives, design analysis, and the global operations strategy of Starbucks. The material also includes recommendations for improving operations.

Operation management and service excellence
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Table of content
INTRODUCTION...........................................................................................................................3
TASK A...........................................................................................................................................3
Comparative Four Vs Analysis..............................................................................................3
Comparative Performance Objectives Analysis.....................................................................5
Design Analysis......................................................................................................................6
TASK B...........................................................................................................................................7
Overview................................................................................................................................7
Global operations strategy of Starbucks and overall macro environment..............................7
Key requirement, challenges & capabilities...........................................................................8
Evaluation and analysis........................................................................................................10
Recommendations................................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13
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INTRODUCTION
Operations management is describe as a procedure that aid assistance to business firm in
boosting its sales as well as profit by transferring all the workforce, raw material into finished
products and services. This report is based upon Starbucks. It is well known coffee chain
company which operate their business across the world. In addition to this, the organisation
executes their coffee industry around 80 nations and more than 30,000 channels, where the
company is selling the product related to coffee. Apart from this, the company was founded by
Gordon Bowker and Zev Siegel in the year of 1971. And at present, they have more than 291000
persons as a staffs (Barata and Cunha, 2017). For executing analysis in better way, it is necessary
to take another company named as Greggs. It is the largest bakery chain which is located in UK.
The first part of this assignment cover the data related to comparative performance, design
analysis as well as Four V analysis. And the second part of the report discuss about the topic
which included global strategy as well as various external factors that imposes direct Influence
on Starbucks. At last, there are various needs, challenges and abilities in also defined in this
report.
TASK A
Comparative Four Vs Analysis
In current scenario, it is necessary for every company to assess the business environment in
order to conduct different operations and activities in better way. It helps them in alteration in
available products and services as per demand of customer (Berry, 2016). Herein, after
determining information, the raw material is converted into finished products. In addition to this,
there are four elements which are needed to consider by every business organisation such as
volume, variety, variation & visibility that helps in taking effective decision at workplace. Thus,
for understanding these elements, it is vital to make a comparison between two well-known
organisations named as (Starbucks & Greggs), which is going to be mentioned below:
Four Vs
Elements
Starbucks Greggs
Volume This is determined as a basic element
that plays a vital role on respect of
Herein, the main purpose of Greggs
is to boost their business activities
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Starbucks. Mainly, this factor focuses
on higher products at minimal cost.
Therefore, it is unstated by taking
instance of Starbucks only. This
organisation provides superior
quality coffee to its buyer at fewer
prices. Determining 30000 outlets,
the firm operate their business same
as it execute producing in bulk
(Chaffey and Smith, 2017).
and functions across the globe. For
this purpose, it is important to
implement heavy industrial plant.
Then, it is possible for firm in term
of manufacturing unit will start
accomplishing goal and objective in
short span of time. Apart from this,
Greggs focuses on increasing
profitability level by cut down the
charges of manufacturing unit.
Variety This is considered as a second section
which plays an important role at
marketplace such as Starbucks. There
are different variety of products that
is offered by company to its customer
which included Iced Coffee, Fresh-
brewed coffee as well as Cold Brew
and many more.
Whereas, For Greggs, it is important
to make alteration among various
range of good and services provided
by them as well as supervision would
also proceed. Without this process,
there is different kind of issues and
problem is faced by organisation
while offering wide variety of
products and services to its customer
(Shalley and Gilson, 2017).
Variation Herein, it is critical for organisation
to include different ranges in their
offering products and schemes. In
current scenario, the manager of
Starbucks has generates apexes in
their current products which is
offered by business firm. According
to this, it requires advancement as
well as uniqueness in their products.
Herein, the manager of Greggs
focuses on offering innovative and
unique flavour in their current food
products to its customer. It assists
them in attracting large number of
buyers towards the products of
business organisation.
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Visibility It is the portion wherein client will
have select to follow the solicitation
placed by them in stipulated period of
time. This is considered as a tactics
and strategy which ought to be
grabbed by the managerial team of
Starbucks. For instance if a client
placed in their solicitation by online
bases, they can deprived of fairly a
bit of a rigidity remark the current
zone of their thing (Cheng and Sheu,
2017).
This is determined as the last section
of 4 V analyses, there are different
alternative which is offered by
business organisation. In this kind of
situation, Greggs provided various
kind of edible to its client in
standardized way.
Comparative Performance Objectives Analysis
In current scenario, comparative performance objective analysis assists the business
organisation in taking effective decision in order to gain competitive advantage over rival firm at
marketplace. In addition to this, the companies such as Starbucks as well as Greggs focus on
boosting its sales and profitability level in upcoming period of time. Apart from this, there are
various types of assets which included capital, labour and many more which assists Starbucks &
Greggs in increasing its market share. Beside from this, there are different factors which are
going to be mentioned below:
Quality: Herein, it is vital for Starbucks to provide superior quality coffee to its customer
at relatively less price. In addition to this, at present, Starbucks contains distinct outlet of value, it
helps them in maintaining as well as bring innovation among various values. On the other hand,
Greggs bargains in their edible products which motivates them in putting various features of
items for achieving goal and objective in stipulated period of time. It helps them in increasing
sales as well as profitability level in upcoming period of time. In addition to this, it increases
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brand image and goodwill of company in front of customer at marketplace (Cho, Kim and Kwak,
2016).
Cost: Herein, it has been analysed that cost which is charged on raw material is the basic
section of espresso coffee products. In addition to this, the business organisation focuses on
increasing level of productivity at low cost. It assists them in achieving goal and objective of
business organisation at marketplace. In term of Greggs, if the cost is connected to raw material
perquisites of this company to build various bread kitchen products. The main focus of business
organisation is to eliminate expenses that assist in increasing more and more revenue at
marketplace.
Speed: This is the element which is analysed with experience level of customer regarding
how much time is taken by particular customer to keep up in a passage agrees the grade of
satisfaction achieved by that customer. In addition to this, Starbucks has efficiently group to
introduce an agenda which assists them in reducing the keeping up beginning of time from their
appeal to the last thing perceived by the client. It helps in increasing the satisfaction and
motivation level of clients in better way. Apart from this, it assists Greggs in boosting sales as
well as profitability level in future period of time (Davis, 2016).
Flexibility: Herein, it is connected to speed as well as flexibility where these both are
interconnected with each other. Therefore, the manager of Starbucks changes their strategies,
policies and procedures according to the environment at workplace. It helps the organisation in
operating their business activities and functions across the globe. It aid assistance to Starbucks in
spreading their brand in other nation in better way. They easily adjust in other nation culture,
heritage as well as background. This is also helpful for Greggs to adjust their brand in different
nation to increase sales as well as profit in upcoming period of time. Therefore, it increases brand
image and reputation of company in front of customer at marketplace. And also achieve
competitive advantage over rival firm at marketplace. It assists in achieving goal as well as
objective in stipulated period of time (Kwak and Kim, 2016).
Design Analysis
Design Analysis is described as a systematic procedure in which it is necessary to have
information related to innovation, scheduling as well as communications in order to develop a
design in an effective manner. There are different kind of design which included the design
related to physical things like building as well as immaterial things like information’s,
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procedures as well as software (Malik, Abdallah and Ala’raj, 2018). In current scenario, in
context of Starbucks, there is design related to client as well as store design which is going to be
mentioned below:
Impact on design of customer service process
Starbucks is leading organisation which focuses on providing superior quality coffee to
its customer. In addition to this, they also offer before or after purchase services that helps them
in increasing satisfaction level of client at marketplace. It increases future sales and profitability
level in the market. Whereas, the manager of Greggs emphases on building positive brand image
and reputation in front of customer. It assists business firm in increasing word of mouth publicity
by its loyal client.
Impact on design of store layout and flow
There is different kind of physical store of Starbucks that helps in attracting large number
of customer at marketplace. They have a specific and unique store that helps them in achieving
competitive benefits at marketplace. It assists them in offering superior ambience to its client in
the market. On the other hand, the supervisor of Greggs focuses on dealing in different kind of
bakery products by using offline as well as online platforms. It helps in increasing success and
growth of business organisation in order accomplishes competitive advantages over rival firm in
the market.
Total quality management theory
Total quality management is considered as process in which organisation provide
superior quality products and services to its user for satisfying them. Their main focus is to offer
innovative and unique goods to its user for increasing profit margin and sales of company.
Herein, the employees focuses on increasing capability to offer effective services to its user in
order to increase their values. There are various aspects of this theory which is going to be
mentioned below:
Customer satisfaction: The organisation offer effective training to its employees for
satisfying its customer. They provide innovative products and services to its user in order to gain
competitive advantage over rival firms at marketplace. It also helps in increasing profit margin
and sales in future period of time.
Effective communication: It is necessary for organisation to effectively communicate
policies and procedures to its staff member in order to provide better services to its user at
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marketplace. It also increases satisfaction level of employees in order to perform their work in an
appropriate way.
Continuous improvement: It is necessary for organisation to continuously improve
different strategies and tactics that helps in assessing need of customer in order to satisfy them.
TASK B
Overview
It is necessary for business organisation such as Starbucks to manage the quality in the market.
They offer superior quality coffee to its client in order to satisfy them. Through this process, the
manager of Starbucks focuses on monitoring and controlling high quality coffee products such as
hot as well as iced espresso beverages, Iced Coffee and many more to its customer (Nadarajah
and Kadir, 2016).
Global operations strategy of Starbucks and overall macro environment
In today’s scenario, Starbucks is the leading coffee handcrafted beverages brand in the
coffee industry. Starbucks is an American multinational chain of coffeehouses and roastery
reserves . As of early 2020, The Company has its reach at 30,000 locations worldwide in over 77
countries. The reason being, since their establishment Starbucks has focused on its best quality
coffee products and has set big standards in the industry which has helped them in their
continuous growth to become one of the leading coffee brand in the world (Torfing and
Triantafillou, 2016). In addition to this, Starbucks has made continuous growth through
generating high profit margins which has happened due to company has always given rich
experience to its customers and has always provided best quality and services, which has created
loyalty in their customers. Starbucks set out to be a different kind of company. They not only
celebrated coffee and the rich tradition, but has also brought a feeling of connection. Over the
years, the standards and the quality maintenance procedures the company is holding has given
them the number of advantages and benefits which has been effectively utilised by Starbucks.
Since the inception, Starbucks has always focused on expansion, which has brought both
negative and positive outcomes for the company and some of them are as below:
High economic growth: In today’s scenario, there is an higher economic development in
most countries in the world which are the potential countries for Starbucks to expand
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their business and has opened doors for them to enter such nation and set up their
business. this could help them in generating higher benefits
Technological changes: Starbucks has always kept themselves technologically advanced
and always done innovative changes. As innovative progressions can help in more
efficient and effective production and will ultimately help in cost reduction and
generating more profits.
SERVQUAL model:
This model is popular for quality research in relation to its services and basic application for
marketing research and other types of industries like hospitality and economy. This
model is related to quality perceptions of customer which is influenced by four different
gaps occurs within organisation. The organisation adopted this model which is going to
be mentioned below:
Reliability: It displays the capabilities to offer services in timely manner an credibility and
accuracy. It needs consistency in execution of services and put promises to its user.
Responsiveness: Herein, the capability to resolve problems quickly, deal with its user and
assists users and meet the requirement of customer for increasing profit margin and sales
in future time period.
Tangibles: Tangibles is considered as a image of machines, materials as well as manuals and
many more. Their main focus is to provide tangible resources for satisfying need or
requirement of customer at marketplace.
Assurance: This factor generates credibility as well as trust for user in order to satisfy them.
It is determined by using professional facilities, attitude courtesy as well as superior
communication skill in order to provide appropriate services to its consumer at
marketplace.
Sympathy: It is considered as a superior preparation for its user in order to provide wide
range of products and services in order to satisfy them.
Key requirement, challenges & capabilities
Key requirements: In case of Starbucks, considering the quality management approach,
it is recommended for the company to fulfil all the requirements presented below.
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 Product based view: It is said to be a view which is based on product and its quality it
is recommended for the Starbucks to utilise its resources and make its products with the
objective to keep up with the quality principles. This view is significant with the goal
that quality of a product is a measurable variable which can be evaluated and will help
them in setting high standards (Wichaisri and Sopadang, 2018).
 Value based view: The value based approach refers to quality as relative to price.
According to this view buyers give more value to higher quality products and are ready to
pay higher prices for it. The value of a product is directly linked with customer's
perceptions towards that product. It is recommended for the Starbucks to consider value
based view as this will help them in selling the product according to prices offered by
Starbucks.
 Manufacturing based view: for every single business organisation which is
manufacturing a product this view has its own importance. Similarly, if we talk about
Starbucks, Products are manufactured in accordance with predetermined specifications.
Quality control techniques help in identifying deviations. As during the overall
manufacturing process, this will help Starbucks to develop a product considering their
requirements and needs of the customers.
Challenges for Starbucks:
There are various challenges Starbucks may face while developing a standardised quality
products and service. This can be as below.
Continuous evaluation system: For Starbucks it is essential to make a continuous
evaluation system, it is the fact that production and quality control is not an one time process and
it is required to continuously evaluate and measure the performance of the assets and quality of
the products and evaluate them with the standardised policies which will help in getting the
deviations out and help in efficient and effective production and also help in working with the
full capacity. This will also help Starbucks in utilising the assets in an improved way. It is
important that the firm needs to always keep up with the quality as it is not a onetime process
and needs to be continuously tracked and evaluated.
 Global measuring system: It is an important that there has to be a system which should
check on overall quality of the products across all their outlets. For a brand it is necessary
to have same quality of their products over all its outlets. Thus there has to be a system in
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which quality across all their outlets are measured which can help in maintaining a
standard quality (Yang, Lee and Cheng, 2016).
Evaluation and analysis
On the basis of above mentioned analyses, it has been analysed that Starbucks is famous for
its coffee chain as well as they offer superior quality coffee to its customer in order to
differentiate them (Pattanayak, Koilakuntla and Punyatoya, 2017). There is effective contribution
made by this brand for accomplishing goal and objective in stipulated period of time. In addition
to this, it is necessary to visit supplier for examining how manufacturing process is done that
assists the brand in consisting superior quality of raw material. Apart from this, the maximum
time duration of 18 weeks in which manager of Starbucks visit to the manufacturer of raw
material. Estimate depends upon current processes taken by business firm in order to improve
quality in an effective manner which is going to be mentioned below:
 Consideration of quality & cost: The manager of Starbucks emphasised on improving
the quality of products as well as reducing their cost that results in maintaining optimum
utilization of resources within workplace (Pizam, Shapoval, and Ellis, 2016).
 . It helps them in increasing the efficiency and effectiveness of whole activities and
functioning of business organisation.
 Distribution channels: Starbucks operate their wholesale business at global level and it
is restricted to some local cafeterias. Therefore, the manager of Starbucks focuses on
establishing strong distribution network and at present time, they boost their physical
stores in many countries.
 Commitment: There is different kind of companies who offer similar kind of products
but level of commitment of customer towards the brand of Starbucks is very high. It is
determined as a superior quality coffee which is provided by Starbucks to its customer at
workplace. It helps in increasing sales as well as profitability level within business
organisation.
 Developing strategies: The supervisor of Starbucks focuses on making effective
strategies, policies as well as procedures for improving the quality at marketplace. It
helps in providing positive ambience which increases the satisfaction level of their
customer in the market.
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 System of random checks: Herein, the manager of Starbucks focuses on making
contribution to cherish relationship in the similar way in which they cultivate beans of
coffee. It aid assistance in increasing the level of profitability as well sales at
marketplace. And also satisfy the twin objective of company that included better cup of
coffee & maintaining better livelihood for its client.
 Exceptional quality: Starbucks focuses on achieving their four objectives by offering
exceptional quality of beans of coffee which included agronomist trial of soil, analysing
their sample of soil, and finally use that beans of coffee as per the need as well as
accordance to high standard of quality (Richter and Brühl, 2017).
 Segmenting the market: The main purpose of Starbucks is to segment their market
based on geographical and demographical sector. It increases their level of understanding
towards the person who loves coffee that helps in boosting their profitability level and
sales in upcoming period of time. It assists them in achieving competitive advantage over
rival firm at marketplace. And it also aid assistance in achieving leading position at
marketplace.
On the basis of above mentioned evaluations, it has been analysed that, it is necessary for
Starbucks to maintain quality that helps in increasing sales as well as level of profit in future
period of time (Schönsleben, 2016).
Recommendations
Herein, there is number of recommendations which are given that is going to be mentioned
below:
 It is recommend that, if the demands of customer is fulfilled in better way then it helps in
boosting profitability level and sales in future period of time. It also increases their
market share. In addition to this, it is a technique in which customer is categorized into
educated, cultured as well as interest in technology helps them in enhancing their largest
base of customer.
 Furthermore, it is important to implement advanced technology that helps in offering
superior quality coffee products to its customer. In addition to this, it increases
experience level customer in the market. It assists the business organisation in achieving
leading position in short span of time.
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CONCLUSION
From the basis of above mentioned report, it has been examined that operation management
plays an important role for the success and growth of business organisation. In addition to this, it
is also important to improve the quality in order to sales and profitability level in future period of
time. Apart from this, the business firm must maintain real supply chain management in order to
offer superior quality products and services to its customer at affordable price. It helps them in
gaming competitive benefits over rival firm in the market. Through this processes, the company
will reach to the new height in upcoming period of time. And also it aids assistance in achieving
leading position in the market. Therefore, it is important for manager to develop effective
strategies, tactics as well as procedures in order to accomplish goal as well as objective in
targeted period of time. In assistance of this, it assists Starbucks in increasing brand image as
well as reputation of company at marketplace.
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REFERENCES
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