Comparative Operations Management Report: Starbucks & Greggs

This report provides a comparative analysis of operations management and service excellence, focusing on Starbucks and Greggs. The report begins with an introduction to operations management and service excellence, followed by a detailed analysis using the Four Vs framework (volume, variety, variation, and visibility) for both companies. It then compares their performance objectives, including speed, flexibility, quality, cost, and dependability, using a polar diagram to illustrate the differences. The design analysis examines store layouts and service design. Part B delves into Starbucks' supply chain management, global operations strategy, and the surrounding macro environment using PESTLE analysis. It identifies key requirements, capabilities, and challenges, followed by an in-depth analysis of a chosen operational area and concludes with strategic recommendations for improvement. The report highlights how Starbucks and Greggs apply operational strategies and service excellence to enhance efficiency and customer satisfaction.

Operations Management
and Service Excellence

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
PART A...........................................................................................................................................1
1) Comparative Four Vs analysis. ..............................................................................................1
2) Comparative performance objective analysis. .......................................................................3
3) Design analysis.......................................................................................................................5
PART B............................................................................................................................................6
1) Overview.................................................................................................................................6
2) Starbucks global operations strategy and surrounding macro environment...........................6
3) Key requirements, capabilities and challenges.......................................................................7
4) Analysis and evaluation of chosen operational area...............................................................8
5) Recommendations...................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Operation management refers to the management practices that are used for creating a
high level of efficiency in a business organisation. In other words, it is concerned with the
process of converting raw material and labour into final goods and services ion order to get high
level of profitability (Copacino, 2019). Whereas, service excellence defines as a extent through
which products and services are willingly meets the customers requirements as well as
interacting with positive and friendly manner. In this project Starbucks case is taken into
consideration which is an American coffee company and the largest chain of coffee house. Under
this report discuss about the comparative analysis of 4 Vs, comparative performance analysis as
well as design analysis between two companies. In addition, choose a major key area of
operations management in the success of company that discuss about the global operation
strategy, macro environment, key capabilities, requirements and challenges, analyse those area in
an effective way and facilitates recommendations for improvements.
MAIN BODY
PART A
1) Comparative Four Vs analysis.
Four Vs analysis: Every organisation operates in a same manner but the 4 Vs are
different from each other as there are volume, value, variation and visibility are the 4 Vs of
operational management (Padma, 2018). These are as follows: Volume Dimension: It can be associated with the managing outputs and it is a key to
how businesses are organised. In other words, it refers to the how much of goods and
services are required to satisfy the demand which is more important when managing lead
time to control as well as adjust volumes. Variety Dimension: It is defined as a range of products that are made by a company as it
differentiate the standardised Vs non standardised goods and services for attracting low
cost and earn maximum profits and facilitates flexibility that increase the core
transformational cost. Variation Dimension: It is considered as a variation in the demand of products and this
kind of dimension helps in finding how much the level of demand changes over time.
This helps in addressing contrast in business model as well as impact on cost and volume.
1

 Visibility Dimension: It is defined as a degree of consumers ability to see as well as track
the experience through operations procedure (Kerzner, 2018).
These four aspects should be required to dealt carefully along with the process excellence
as it involves high efficiency, productivity as well as fast cycle time. It is different within the
context of all organisation that can be shown by using the profile of two organisation such as
Starbucks and Greggs.
Starbucks: It is an American coffee company and chain of coffee-house as it was
established in Seattle, Washington in 1971. As of the early 2019, the company Starbucks
operates over 30000 places across the worldwide.
Greggs plc: It is the largest bakery chain in UK as it specialised in savoury products like
backs, sandwiches, sweets, sausage rolls etc. It was founded in 1939 and headquartered in North
Tyneside, UK. As of 2019, Greggs plc operates their businesses in 2009 locations.
Four Vs Starbucks Greggs plc
Volume Existing sizes includes Short (8 ounces),
Tall (12 ounces), Grande (16 ounces),
Venti (20 ounces) and Venti iced (24
ounces) but it is unsatisfied. So now a
company is launching Trenta (31
ounces).
It is the largest bakery chain in UK
with 1850 shops nationwide as well as
serving millions of customers in a
week.
Variety Starbucks serves hot and cold drinks,
micro ground instant coffee, Whole bean
coffee etc.
Greggs plc offers a variety of products
like Pasta, sandwiches, salads, soups
etc.
Variation The corporation has a marketing mix
business model as well as differentiation
strategy that supports Starbucks industry
position as a leading coffee-house chain
in the dynamic marketplace.
The company operates vertically
integrated supply chain from
manufacturing to distribution that can
make high quality of bakery food at
great prices as well as offer value to
their customers.
Visibility The locations of their coffee-houses are
highly visible.
The stores of Greggs plc are more
visible as well as their prices also.
2

2) Comparative performance objective analysis.
Operation performance refers to the company's capabilities that are required to satisfy the
customer's requirements and expectations for providing attractive and dependable services at a
reasonable amount (Objectives of Operational Performance, 2019). There are mainly five
objectives of operation performance that can be considered as follows: Speed: This kind of objective measures how a business organisation speedy deliver their
products and increase their sales as it is mainly concerned on the time factor of
production and distribution of goods and services. Flexibility: This type of objective refers to the assembling product lines in order to deal
with the several requirements and adjust them quickly as per the new requirements. It is
very close to the speed objective through which a company should be able to make
different quality products and operations that are best meet as per the market situations. Quality: It is relate to the measurement of how well goods and services adjusts to the
specifications. It is important for providing a better quality of goods which is highly
durable and reliable that are more demanded in the market. This can be easily serviced
and customers also believes in a considerable elements within the performance
objectives. Cost: It is related with the variation proportion in the production cost of a product which
is measured by the variation in the factors. There are many factors such as volume,
variety etc. as these will be directly impact on the company's cost and profitability.
 Dependability: It is a huge element within the operation performance as it measures how
dependable a company is, when it comes to deliver products timely as per their pre
planned cost and prices (Victorino, 2018).
Polar diagram of Starbucks and Greggs plc on the basis of their performance objectives:
3

Within the context of Starbucks and Greggs plc, the current operation performance of
both operations are discussed below:
Objectives Starbucks Greggs plc
Speed The company focus on smooth inside
communication for minimising waiting
time and maintain better quality of goods
by organising Kitchen or working place
in a well manner.
In order to deliver products and
services to the customers a company
use effective organisational structure
which helps in timely delivery of
products without any interruption.
Flexibility The research and development
department of Starbucks helps in
determine flavours that could attract
more customers and give high
profitability to the company (Thürer,
2018).
For bringing the flexibility in the
operations of Greggs plc, market
analysis helps to define the entire
situations and produce goods as per
the requirements.
Quality It helps in differentiating company and
its products from their competitors as
quality plays an important role in
customer experience. Starbucks adopts
TQM and quality checks in order to
For effective quality of products and
services a company use quality
management techniques to ensure
the superior quality of bakery items
that satisfy the customers (Woliński,
4

ensure the resources quality and effective
time management as well as could collect
feedbacks from customers to assess their
performance.
2018).
Cost The cost involves getting coffee beans as
Starbucks is specific about Arabica
beans. As the company have started
growing their own coffee beans that
helps in minimising the supplier costs as
well as company update technologies in
order to effective use of inputs and
minimise wastages.
Mainly cost are incurred in this
business is high due to the long
working hours and overhead costs.
For minimising that costs a company
use cost minimisation techniques.
Dependability For dependability Starbucks may look
into the records of warranty claims
regarding a specific products and
services in order to measures the product
dependability (Davis, 2018).
For knowing the time, cost and price
of their products a company use
feedbacks as well as warranty claims
for ensuring the level of
dependability of a particular
product.
3) Design analysis.
Service design consider as a idea of business procedures as well as customers interactions
that are developed in order to satisfy the customers demands. As customers want continuous
process and product development because it directly increase the customer's experience.
Whereas, store layout define as a design of stores floor space which are used to place products
into it as it directly influence the behaviour of customer's. Moreover, the process as well as
layout design decisions helps operations for copping up with the several dimensions such as
volume, variety, variations as well as visibility and along with it these decisions assist in
affecting the company's performance (Scott, 2018).
From the above discussion, it has been find out that the layout decision helps in choosing
the volume dimensions of a company that is related to the size of business operations as well as
5

helps in showing the visibility also. By making effective design a company will be able to take
advantages of several range of products variety that is effected as per the market variations in
which customer's demand are changes. All these dimensions are directly influenced the
company's performance objectives that are related to the speed, cost, quality, flexibility as well
as dependability of products and services of the company.
As most of the companies focus on the customer satisfaction and experience such as
Starbucks and Greggs plc. Both emphasise on the performance objectives by designing the
appropriate and attractive layouts. The Starbucks global creative team is liable for the delivery of
all in store collateral and packaging, for the design is related to the advertising and marketing
materials. The design procedure of company covers the need in order to express the experience
of Starbucks as it realises that coffee is not new in itself but they use design to build on the
coffee experience. It includes the way in which baristas interact with their customer's.
PART B
1) Overview.
In this report, discuss about the “Supply chain management” as a operational area of
operation management within the success of Starbucks. As supply chain management define as a
effective management of the flow of goods and services as it includes several procedures that
converts raw material into finished products. Starbucks uses vertically integrated supply chain
that means a company involved all phases of its procedure by using coffee beans as a input and
make a cup of coffee that sold to their customer's. Through this supply chain, a company works
with the 300000 coffee growers across the worldwide (Supply Chain Putting the Star in
Starbucks, 2019). The company thinks that direct interaction with the farmers ensures that their
coffee beans will accomplish same standard of coffee quality as well as flavour. The supply
chain management helps in improving the company performance as it contributes towards the
effective management of all processes.
2) Starbucks global operations strategy and surrounding macro environment.
In order to analyse the external environment and the global operations strategy PESTLE
analysis is done for knowing the impact of several factors and the formulation of global
strategies.
6

 Political factor: In this includes taxation policy, government stability, international
stability as well as employment laws that directly impacts on the businesses. If the
government imposed high tax rate on the farmers in those countries where coffee beans
are producing from where Starbucks purchase it, leads in paying high prices that
ultimately impacts on the customers because they require to pay high amount. Starbucks
should study the political stability of any country before they plan to expand as well as
global economy must be carried into attention as it can impacts on the company's market
as well as sales. Economic factor: If the economic growth of a country is low at that location Starbucks
sales also fall down as well as aggressive price and sales from rivals creates a price war
for Starbucks that can drive down. Along with it increase in interest rates leads in
investment and expansion of Starbucks (Martyn, 2018). Social factor: Starbucks needs to analyse and target their customers as all customers have
different attributes. The local population of stores have high attitude of work which leads
in low turnover. The company adopts high standard of friendly as well as healthy
environment in order to better meet the customers expectations. Technological factor: The technologies such as coffee making machines, computer
system development etc. are use by Starbucks to operates their business successfully and
make appropriate strategies for operation management. Starbucks has huge budget that
have been allocated effectively after having accurate R&D informations. Legal factor: Starbucks have to ensure they do not violate any laws like religious laws as
well as they have to be attentive on the duties that paid against the import and export of
goods (Santos, 2018).
 Environmental factor: Customer's leave coffee shops with the cup of coffee as well as
leave in street so the packaging of cup should be accountable in order to make eco-
friendly. As Starbucks have carefully consider the procedure to dispose rubbish because
in some countries strict laws are formulated.
3) Key requirements, capabilities and challenges.
Key business requirements are refers to the day to day needs of operations that must be
required to accomplish for solving the issues that are currently faced by a business organisation.
It can be ascertained by the shortfalls in budget, defects in products, customers dissatisfaction
7

and so on. The key requirements of supply chain management of Starbucks includes the plan,
source, make and deliver for its supply chain. Whereas, capabilities are considered as an
activities that is potentially capable to perform tasks at a specific level of performance level. Key
capabilities includes the people and processes which helps in performing value added activities
in order to building the offerings of Starbucks and support high sustainability growth and success
(Lasrado, 2018). In addition, a company Starbucks faced many issues as a result of realising the
above requirements of day to day operations. The challenges includes the inadequate seating
capacity and the power sources which negatively impacts on the company's performance. The
cleanliness at condiment counter consider as another issues that is faced by Starbucks that effects
the customer experience and sometimes, it may lead in dissatisfaction. Also, there are more
challenges such as inconsistency in customers services and products, unavailability of Wi-Fi
ports at some locations as well as uncustomised menu that directly impacts on the
accomplishment of organisational objectives and increment in sales and revenue.
4) Analysis and evaluation of chosen operational area.
Starbucks supply chain is related to the distribution of coffee beans mainly as it is a
complex procedure because coffee and its products are obtained across the world to be delivered
at its retail outlets. As the company adopts the rule of design, source, form and deliver for supply
chain in order to planting coffee to brewing perfect cup of coffee for its customer's. The
Starbucks supply chain involves the planning of raw materials, producing coffee and distributing
to their retail outlets and completely positioning to their own people internally in order to keep
watch over operations as well as make strong relations with service providers (Gardiner, 2019).
There are some resources within the supply chain management operation of Starbucks
that directly impacts on the performance of company's operations and objectives. There are many
resources such as financial, technological, physical as well as human which plays a crucial role
in the management of operations performance of Starbucks. These can be considered as follows:
 The financial resources impacts on the quality and cost performance objectives of
Starbucks. If the quality of products is high then cost is also high in order to make
balance between the quality and cost a company facilitates better quality at a minimal
cost.
 Physical resources includes the locations where business operates their activities that
affects the speed objective of performance. Starbucks have same outlets across
8

worldwide so the customers have to pass through the seating arrangements firstly. It
would be more convenient to the customers to have counter closer to the main entrance.
 Human resources is related to the skilled, knowledgeable as well as experienced
workforce which impacts on the durability performance objectives. There is the need for
Starbucks workers to learn how to make different drinks as well as how effectively
interact with customers. There is high level of consistency in the Starbucks products and
services (Bolton, 2019).
 Technological resources impact on the many objectives of operation performance such as
quality, cost, speed etc. Starbucks needs to focus on using latest techniques that can assist
in minimising the cost as well as increases the speed along with the consistent quality of
products and services.
In order to know about the impacts of performance a company Starbucks apply
transformations process model in which the supply chain aligned with the organisational goals
for increasing the efficiency level. It is considered as an activity as it takes inputs, transforms and
add some value in order to facilitate appropriate output to the customers. It can be defined as
below:
Transformation process model refers to the detailed version of supply chain
management of Starbucks that insights the many factors. It begins with the environment firstly
that involves coffee-house customers and it is developed by keeping in the mind of customer
experience which ensure when users leaves coffee shops with the smile on their face or
aggressions (Slack, 2018). It includes the inputs, transaction process as well as outputs as it
creates a link between monitoring as well as controlling tat assists in increasing the customer's
experience and their coffee-houses environment.
5) Recommendations.
There are some recommendations for the Starbucks in order to develop their effective
supply chain management as well as customer experience with high level of satisfaction. These
recommendations should be suggested after analysing their key challenges that are occurs while
realising the key requirements of daily operations. These are as follows: Cleanliness of counters and coffee desk: Starbucks has separate counter that keeps
additional mug holders, sugar sachets, tissues and so forth things. This is provided by the
staff while customers order coffee if they require any additional. As it would be
9

suggested that in order to create a good roster system that will make sure that workers
take crooks in viewing on coffee desk. It is essential to order procedure as it increase the
customer service levels as well as satisfaction. This will help in increasing speed
objective of operation performance as well as customer experience also. Increased seating capacity: Starbucks can focus on increasing the seating capacity in
order to having outdoor space that results in that more customers will like to dine in-store
as well as this would impacts on order process that will be supplying more customers at a
specific time. The company could adopt space friendly lounge, bean bags, comfortable
which can be easily moved as per the customer's comfort (Found, 2018).
 Customised orders: Providing variety in its milk full cream, soya m,ilk, low fat, skimmed
milk and so on as per the customer's request for making customised beverages.
Sometimes, most of the stores of Starbucks out of the stock that is required by the
customer which will negatively impact on the company's performance as it affects on
order process because of the confusion arises to the customers as well as barista. The
consumers must be made sensible of their choices available as the company should have
proper ingredients for these choices.
CONCLUSION
It has been concluded from the above report that the operation management is essential in
every organisation in order to manage supply chain in effective way. In this report, looked
towards the understanding about the four Vs of two organisation as well as operations
performance objectives in order to align the strategic objectives for businesses. In this choose
supply chain management of company as the main emphasis of this assignment as it is
considered as a most important area of company's operations and performance. Also, studied
about the strategies related to the global operations and macro business environment that
supports the supply chain management of the company. Identification of key requirement,
capabilities as well as challenges are needed for analysing the impacts and outcomes which
directly related to the company's performance and productivity. In addition analyse the key
resources of supply networks and their impacts on performance objectives by applying
transformational process model as well as provide specific recommendations in order to get high
benefits and customer experience.
10

11

REFERENCES
Books & Journals
Bolton, R.N., 2019. Service timing: Designing and executing service in a dynamic environment.
In Handbook of Service Science, Volume II (pp. 13-33). Springer, Cham.
Copacino, W.C., 2019. Supply chain management: The basics and beyond. Routledge.
Davis, B. and et. al., 2018. Food and beverage management. Routledge.
Found, P. and et. al., 2018. Towards a theory of operational excellence. Total Quality
Management & Business Excellence. 29(9-10). pp.1012-1024.
Gardiner, D. and Reefke, H., 2019. Operations Management for Business Excellence: Building
Sustainable Supply Chains. Routledge.
Kerzner, H., 2018. Project management best practices: Achieving global excellence. John Wiley
& Sons.
Lasrado, F., 2018. Organizations achieve excellence through quality awards. In Achieving
Organizational Excellence (pp. 27-36). Springer, Cham.
Martyn, E. and Anderson, C.K., 2018. Customer Satisfaction through Service Excellence: The
Importance of Focused Training.
Padma, P. and Wagenseil, U., 2018. Retail service excellence: antecedents and consequences.
International Journal of Retail & Distribution Management. 46(5). pp.422-441.
Santos, E.O.D. and Frederico, G.F., 2018. Evaluating knowledge management maturity: a case
study of a service operations company. International Journal of Business
Excellence.16(1). pp.1-18.
Scott, C., Lundgren, H. and Thompson, P., 2018. Guide to Customer Service in Supply Chain
Management. In Guide to Supply Chain Management (pp. 175-187). Springer, Cham.
Slack, N. and Brandon-Jones, A., 2018. Operations and process management: principles and
practice for strategic impact. Pearson UK.
Thürer, M. and et. al., 2018. On the meaning and use of excellence in the operations literature: a
systematic review. Total Quality Management & Business Excellence. pp.1-28.
Victorino, L. and et. al., 2018. Service operations: what have we learned?. Journal of Service
Management. 29(1). pp.39-54.
Woliński, B. and Bala, S., 2018. Comprehensive business process management at siemens:
implementing business process excellence. In Business Process Management Cases(pp.
111-124). Springer, Cham.
Online
Objectives of Operational Performance. 2019. [Online] Available through:
<https://www.planettogether.com/blog/objectives-of-operational-performance>.
Supply Chain Putting the Star in Starbucks. 2019. [Online] Available through:
<https://www.fronetics.com/supply-chain-putting-star-starbucks/>.
12