Operational Management: Analysis and Strategy for Starbucks and Greggs

This report analyzes the operational management of Starbucks and Greggs, including 4 Vs Analysis, operational performance, and design analysis. It also discusses the global operation strategy and challenges faced in quality management.

OPERATIONAL
MANAGEMENT

TABLE OF CONTENTS
OPERATIONAL MANAGEMENT ...........................................................................................1
TABLE OF CONTENTS.............................................................................................................2
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
4 Vs Analysis...............................................................................................................................3
Operational Performance.............................................................................................................4
Design Analysis...........................................................................................................................5
PART B ...........................................................................................................................................7
Overview......................................................................................................................................7
Global Operation Strategy...........................................................................................................7
Requirement, capability and challenges......................................................................................8
Analysis........................................................................................................................................9
Recommendation.......................................................................................................................10
CONCLUSION..............................................................................................................................11

INTRODUCTION
Operating management is defined as the activity which looks at bringing the effectiveness
in all the function or the operation of the business. Report highlights the comparison between the
Starbucks and Greggs on the basis of 4 Vs Analysis, Performance objective and Design Analysis
of the company. After that the report goes on to highlights overview of operational management
and the global operational strategy which is used by the Starbucks in the organization. After that
the report highlights Requirement, capability and challenges faced by the quality management
operation management. In the end the report highlights the analysis and evaluation of operational
area of Starbucks.
PART A
4 Vs Analysis
4 Vs Analysis of the organization is defined as a different output which has been excreted
from the input of the different input like raw material, knowledge, capital, equipment and time. 4
Vs of operational management are defined as Volume, variety, Variation and Visibility.
Volume: volume stands for the amount of the product which used to produced by the
organization to satisfy the need of the customer in the organization. Starbucks has an annual
sales of $22.39 billion in the year 2018. At the same time Greggs the largest bakery chain in the
United kingdom has a sales volume of 1 million in the year 2019. From the data and the
observation it has been find out that the Starbucks used to produce the higher volume of the
product in the market to satisfy the demand of the customer successfully in the market
(Damanhuri, 2018).
Variety: Both the organization used to offer the variety of the product line in the UK
market to attract the eye of the customer in the market. At the time of comparing the variety of
the product offer than it can be easily said that Greggs used to offer the larger product line to the
customer. As they used to offer, beverages, cakes, sandwiches, burger and also variety of the
cookies in the outlet. At the same time Starbucks also used to offer or manufacture the variety of
the product. It has been find out that the Starbucks also used to offer the variety of the product
line of the company only but the coffee product of the company are only well-known in almost
all the market.. At the same time Greggs used to offer the variety of the product such as cake,
coffee and cookies of the outlet as well. This help Greggs in attracting the customer toward the
company. Some famous product line Starbucks in coffee product are Fresh-brewed coffee, hot

and iced espresso beverages, Iced Coffee, Cold Brew, Nitro, Frappuccino® coffee and non-
coffee blended beverages, Starbucks Refreshers® beverages, and Teavana® teas.
Variation: Variation stands for bringing the new product in the market by making some
small or changes in the product line of the company. When comparing both the organization on
the basis of the same it has been find out that Starbucks used to bring more amount of the
variation in the product line of the company as compare to the Greggs (Lohr, 2019). As Greggs
generally used to bring the 2 to 3 variation in the product line of the organization. At the same
time Starbucks used to bring the huge amount of the variants' product in the market. Coffee
product is the best example of the same. Some variants of coffee product of Starbucks are Drip
coffee. This is the simplest drink on the menu are Drip coffee, Iced coffee, Espresso, Latte,
Macchiato, Cappuccino, Mocha, Americano. To compete with the same Greggs has started
developing variety of the hot drink product to attract the consumer and able to get the good name
from the market.
Visibility: When seeing at the visibility of both the companies' product it has been seen
that the Starbucks and Greggs both used to present the product in the name and logo of the
company. Starbucks used to take help of the cups to offer coffee and wrapper to present the
coffee beans. Whereas Greggs uses the combination of variety of the packaging to present the
product of the company.
Operational Performance
Operational performance is defined as a measurable result which are relative to the assets used to
achieve those result. Generally operational performance is measured against the cycle time,
productivity, waste reduction, and regulatory compliance (Mas-Machuca, Akhmedova and
Marimon, 2018).
Productivity: Process and capacity efficiency is one of contributor to Starbucks success.
As Starbucks outlets are becoming more productive as compare to the past. The reason behind
the same is found that the organization has developed the broader product line and also has hired
the more baristas and worker to carry out the operation of the business. At the same time when
seeing the productivity of the Greggs it has been find out that Greggs has seen the better amount
of the productivity rise as compare to the Starbucks. As Greggs has seen 6 percent rise in the
productivity of the company in the last 1 year whereas Starbucks has only seen the rise of 25
percent in there productivity.

Quality management: Quality management is another important operation performance
for all the organization. By looking at the operation of both the organization on the basis of the
Quality management it can be said that Starbucks is way better than the Greggs in maintaining
the good amount of the quality in the organization. Starbucks used to take the help of the more
than one quality management tool in the organization to check the standard of quality this is not
in the case of the Greggs (Merino and et.al., 2016). Starbucks used to use the TQM as a quality
management tool. Whereas Greggs uses mystery shopper as a strategy to manage the quality
Operations management of Starbucks. 2017.
When looks at the quality of the raw material used it has been analysed that the Starbucks
is more focused in that way as they used to procure the coffee by them self and also only used to
procure the raw material only from the supplier who used to follow the Starbucks standard. This
is not case with Greggs. They also used to procure to procure good quality raw material but do
not used to follow any standard for the same.
Location Strategy: Starbucks location strategy used to consider urban centres and also
look for the location which used to see a good amount of traffic and visibility. Generally,
Starbucks used to target the middle class and upper-class people in the outlet. Starbucks to
widen up their customer base sometime also takes the help of the strategic clustering of cafes in
the geographical area. Whereas Greggs also used to focus on the lower-class family also as they
used to offer the product of the company at the lower rate as compare to the Starbucks.
Wastage management: It is another activity of the operational function in which the
organization used to look at optimum utilization of the resources available. Both the organization
used to make the adequate efforts to manage the wastage in the organization as both of the
organization uses the lean production technique to do the same. It helps both the business in
getting better result as they used to produce the large amount of the product in the same raw
material.
Design Analysis
Looking at the design of both the company’s product it can be said that Starbucks has an
upper end on the Greggs. The biggest reason behind the same is that Starbucks has developed the
strategy in the organization which allow them to make the changes and balances the design
theme very easily in the organization (Moutinho and Vargas-Sanchez, 2018 ). As Starbucks used

to has a thought that adding the different design would help he company in adding the variety of
the consistent service for the customer.
At the same time Greggs not used to bring the vast amount of change in the design of the
product. They just used to carryout the operation with the help of the tradition designed only
used to change the same at the time of at most need.
After going through the four Vs analysis of both the organization that volume of the
product developed does not has any impact on the design of the organizational product for both
the organization. Variety of the product develop by Starbuck used to drive the organization to
have the different design has to differentiate the product from one another, this is not the case
with the Greggs. Visibility is another factor which used to drive both the organization to have a
change in the design as it helps them in presenting the company in better way in front of the
customer in the market.
When comparing both the company on the basis of the layout design it has been seen that
Greggs is having a better design layout due to the strong bakery heritage. Its layout design of the
space directly impacts and shows the way of working like the flow of work, materials,
information’s through the system etc. At the same time Starbucks does not invest that heavily on
the layout design of the outlet.

PART B
Overview
Quality management is the act in the organization which used to sees and look at the
activity related to the maintenance of the standard of the quality in the organization. Quality
management process of the organization includes many aspects such as quality policy, creating
and implementing quality planning and assurance, and quality control and quality improvement.
Quality management operation used to bring the variety of the significance for the
Starbucks as this used to help the organization in maintaining the good name of the company in
the market by improving the goodwill of the company. At the same time this also help the
organization in maintaining the good amount of the customer base in the organization. As
Quality management operation help the organization in being with the same direction in which
customer are expecting (Moutinho and Vargas-Sanchez, 2018 ).
Global Operation Strategy
Starbucks used to operate ion more than 50 countries in the world and is able to earn a
good amount of the name from almost all the market in the global market. The strategy which is
used by the Starbucks to enter into the global market is researching the new market and bringing
the innovation in the operation on the basis of the opportunity which has been drive from the
international market. For example, to attract the eye of the customer in China Starbucks has
opened the store in high traffic and visibility location with integrating the variety of the new
digital platform. As there is good trend of digital platform (Global marketing strategy of
Starbucks, 2017). Also organization has brought the tea-based ingredient in Chinese store as
there is tea culture in the China,
Quality management of the organization is the operation of the business which used to
play a very crucial role for Starbucks in successful implementation of this strategy in the
organization. The biggest reason behind the same is that organization used to see a good amount
of the competition in the global market from the variety of the local and global coffee provider.
As a result quality of the offering help the company in getting the competitive advantage. As
Starbucks is also able to earn the good name in the global market for the quality of the product
which is offered by the organization it helps the organization in getting the interest of the
customer. Quality management operation of the business help the organization in maintaining
standard level of the quality of the product in the market (Rasmani, Widodo and Wibowo, 2017).

Quality management operation of the business also help the organization in defending the
different macro environment factor as well. As all the political parties in the global market
always influence on offering the good quality of the product to the consumer, quality
management help the same. As Starbucks uses the good quality and recycling raw material in
packaging it helps the organization in satisfying the Environmental factor. Also quality of the
product help the consumer in satisfying there need which help the organization in satisfying the
social factor of the macro environment.
Requirement, capability and challenges
Requirement and Capability
Quality management is one of the important operation for all the organization who used
to dealt in the food and beverage industry. As quality is the only think which help the
organization in building the amount of the trust and bond with the customer in the market. There
are many requirements which need to be fulfilled by the organization to maintain the good
amount of the quality in the organization. One of the key requirements is the Human resource, as
they are the one who used to carry out the operation of the business, they used to perform the
variety of the function in this operation. They used to control the technology or the system which
used to measure the quality of the product produce. Also, they used to pass on the message to the
senior management about the different difficulty which they are facing in maintaining the quality
as technology and system does not help in the same. To full fill the requirement Starbucks used
to offer the good motivation to the employee to retain them for the longer period in the
organization (Reid and Sanders, 2019). Another requirement in carrying out the Quality
management operation is the system to measure. All the organization used to fix up the system
on the basis of which the quality of the product is measure. Starbucks also uses the
benchmarking tool to measure the quality of the product in which they used to check the quality
of current product with already set measure.
Challenges
To carry out the quality management operation in the Starbucks the organization there are
variety of the challenges which are faced by the organization. One of the biggest challenges
which is faced by Starbucks in the quality management operation is that Starbucks always find it
difficult to procure the same quality of the raw material at all the store in global market. As
Starbucks used to execrate the coffee beans by their own it gets difficult for the organization to

transport the same to all the outlet on time (Sivarajah and et.al., 2017). This sometime drive the
company to look for the additional supplier which creates the difficulty for the organization to
maintain the same quality of the offering of the organization. Another challenges which is faced
in the Quality management operation is to set the measure on which the quality of the product
will be judged. The reason behind the same is that all the different variety of the product requires
a different variety of the measure to be set by the organization.
Analysis
As explained in the above section that quality is the factor which used to play a very
crucial role in Starbucks at the time of attracting the customer toward the product of the
company. Starbucks uses the variety of the quality management technique and tool to check and
maintain the good level of the quality in the organization. Some technique and tool are as
follows:
Starbucks district manager used to visit the outlet under there area and on the basis of the
same used to take the feedback of the customer and also used to check the different drink. This
strategy helps the Starbucks in passing on the message to the manager of the outlet that they have
to maintain the standard of the quality in the outlet. Another inspection technique which is used
by the Starbucks to maintain a good quality of the service in the organization is the baristas on
the floor. All the drink in the organization are called from the barista on the point of the sale
(Swink and et.al., 2017). After that the drink are recalled again to check the accuracy of the drink
and also used to make sure that all type of the drink are prepared as per the order of the
customer. After that barista on the floor used to check the accuracy once more time before
handing over the drink to the customer who has ordered the same.
Starbucks also takes the help of the third party organization to maintain the good amount
of the quality in the organization. ECOSURE is the organization which used to provide the
services to the Starbucks for there quality check. As they used to inspect the outlet in every six
month to check that high standard of the quality standard are maintained in the organization.
ECOSURE used to provide with the paper to all the outlet in the nation what is required to be
done in the outlet to maintain the level of the quality which is expected and the standard of the
quality for the Starbucks outlet. On the basis of that organization used to check the quality of all
the outlet and used to provide the report card of the same to all the outlet owner and also used to

provide the different suggestion to all the outlet owner which they used to follow to achieve the
level of the quality which is expected by all companies.
Starbucks also used to maintain the different system in the organization to improve the
different aspect of the product on the basis of the quality.
To maintain the good quality of the product designed in the organization A cross
functional designed team has been constructed by the Starbucks. The team includes the member
from variety of the different department (Zhang and et.al., 2017). The team includes members
from marketing, engineering, operations, and other departments are responsible for the quality of
design. This team generally focused on the need of the customer which are present in the market
and on the basis of the same used to consider some design which is batter suitable for the
company and used to select the best out of all the consideration.
To maintain the good quality of conformance and Availability in the organization
Starbucks used to follow and the simplest technique in which the outlet used to allow the
customer to have the coffee which they like to have by offering the variety of the personalizing
option to the customer who used to visit the outlet. Some personalizing option are non-fat,
decaffeinated, foam, a shot of espresso.
To maintain the good quality of the field service in the outlet Starbucks try to fix it very
quickly by taking the feed back of all the customer when they used to leave the outlet after
availing the service. After that Starbucks used to use the following information as a basis to
improve the variety of the services of the organization.
Recommendation
After going through the different aspect of the quality management of the Starbucks it has been
recommended that Starbucks need to adopt the inventory management tool in the organization. It
will help the organization in getting the better idea about the amount of the inventory left in the
organization, which will eventually give the better idea to all the outlet about the point they have
to order the been from the supplier. This will eventually help the company in getting the
premium quality of the coffee bean in the organization at every time during the production. This
will also help the organization in having the proper idea about the number of the stock which is
present in the organization. This will help the organization in overcoming the issue related to the

procurement of the good quality of the raw material in the organization to maintain the standard
of the quality in the organization.
It has been also recommended to the organization that they should increase the number of
the investigation which used to be performed by the organization or the third party. As
organization in current scenario used to conduct the inspection twice in the year at the time
interval of 6 months. Organization can increase it by thrice in the year by organization the
inspection in every 4 month in the year. This will force all the outlet to maintain the higher
standard of the quality in the outlet as low score on the report card of the inspection is the
negative aspect for all the organization.
It has been also recommended to the organization that they have to improve the services
of taking the customer feed back in the outlet. This will help the organization in understanding
what are the expectation which are there in the customer. On the basis of the same organization
has to make sure that they used to bring the variety of the changes in the offering of the
organization so that they can attract the customer in the organization.
CONCLUSION
After going through the above report it has been summarized that quality is one of the
factor which is used by the organization in the market to attract the eye of the customer in the
market. To maintain the same amount of the quality in all the outlet at the global level
organization used to use the variety of the strategy and techniques. Inspection by the district
manager, barista and the support from the third parties are the three type of the inspection
technique which is used by the organization to maintain the quality of the offering which is
offered by the organization in the market.
Organixzation also used to take the other strategy such as quality design team which used
to check the quality of the product designed which is made in the organization. Also,
organization used to take the feed back of the company and try to implement the same in the
operation. In the process of maintaining the quality organization used to face some challenges
related to procurement of raw material and also setting up of the measure.

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