Operations Management and Service Excellence: Starbucks and Greggs

This report provides a comprehensive analysis of the operations management and service excellence of Starbucks and Greggs. It begins with an introduction to operational management and its application to the food and beverage industry. The first part of the report focuses on a comparative analysis of Starbucks and Greggs, including a Four Vs analysis (Volume, Variety, Variation, Visibility), a comparative performance objective analysis (Quality, Speed, Dependability, Flexibility, Cost), and a design analysis considering store layout and customer interaction. The second part delves into Starbucks' global operations strategy, examining its supply chain management, key requirements, capabilities, challenges, and the surrounding macro-environment using PESTEL analysis. The report concludes with recommendations for operational improvements.

Operations Management
and
Service Excellence

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
PART 1............................................................................................................................................1
1) Four Vs Analysis................................................................................................................1
2) Comparative performance objective analysis. ..................................................................3
3) Design Analysis.................................................................................................................5
PART 2............................................................................................................................................6
1) Overview............................................................................................................................6
2) Starbucks global operations strategy and surrounding macro-environment......................6
3) Key requirements, capabilities and challenges..................................................................8
4) Analysis and evaluation of chosen operational area..........................................................8
5) Recommendations..............................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Operational management is determine as the business practices of administration to
develop the highest plane of efficiency possible within the company. Therefore, in this relation,
the report below is based on Starbucks, it is the growing organisation in food and beverages. In
context of this company, this report is based on two parts. First part will focus the comparison of
Starbucks and Gregg, which is different food and beverage organisation within the UK. It will
also cover a comparison based on Four Vs, Performance objectives and Design analysis
(Aguilera and Ruíz, 2019). Furthermore, the second partition of the project suitably and
efficaciously undertakes a particular operational managements as well as reflecting the aspects of
success within Starbucks.
MAIN BODY
PART 1
1) Four Vs Analysis
Four Vs Profile Diagram
In this the one thing is common in Overall operations process, they consists their inputs
like knowledge, raw material, equipment and time, transform them into outputs as well as capital
in goods or services. They do this in various manner, there are main four definition of Vs such as
Volume, Value, Variation, visibility of operational management. Volume Dimension: It can be related with the outputs of managements and how much of
a particular product is requisite to satisfy their needs and demand. Low volume trading
operations tend to less repetitious with staff performing more than one role. On the other
hand high volume translates into repeatable processes(Calabrese and Corbò, 2015). Variety: It is associated to the assortment of service and goods to be produced and sold-
out to the customers. Diversity is all about to this Vs High variety give more company
flexibility to make goods according to match on the basis of demand of clients. For Variation- It mention that how much level of demand alter over the period of time by
external factors. Hence, a number of cause make it challenging to predict variant and
changes.
 Visibility: It determine that how much of the process of administration activity does the
consumers real experiences. The service industries consist high plane of perceptibility
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whereas the fabrication or manufacturing company has little to no visibility to its
customers.
Starbucks: As of the early 2019, the company Starbucks function over 30000 places
across the global(Chang andM a, 2015). It is Mainly coffee house American company was
founded in Seattle in 1971.
Greggs plc: It is the largest bakery chain in UK. And the first was opened in 1951. It
makes sandwiches, sweets, sausage rolls.
Four Vs Starbucks Greggs plc
Volume Existing sizes includes grande (16),
trenta (31), Tall (12 ounces), venti (20
ounces).
This bakery spread in UK in a large
manner with 1850 shops.
Variety This serves cold and hot drinks,
espresso, cafe latte, snacks etc. s
They offering a assortment of products
like sandwiches, salads, pasta etc.
Variation On the list there are 80,000 above
variations, specifying for temperature
might be there on most worst Starbucks
drink orders but seen some equally
terrible ones.
The company function upright merged
supplying chain from creating to
dispersion that can form high choice of
bake shop at large cost.
Visibility The area of their coffee-houses are
highly see-able. Starbucks prefer for
Capability improvement within the
coffee-house to render comforters for
consumers and staff (Copacino 2019).
Their cost and store of this are more
visible.
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2) Comparative performance objective analysis.
The operation performance mention to the ability of companies which are needful to
fulfil the demand and expectations of clients. They are giving dependable or attractive services at
sensible value. There are five objectives of operation performance which includes as: Quality: It is an significant performance objective to run into just because clue of visual,
what an operation does. It acts as a agreeable indicant which staff and client base their
hope around them. In terms of operational principles, prime quality can develop the
potency for better employment that can trim down the costs.
 Speed: It is associated to understand consumers to ordering a product or service as well
as point at which they get it. It is more liable that the company that delver the products on
time, for this a customer to be satisfied by experiences of them (Eriksson and et. al.,
2016).
It is high speed which can permit for rapid delivery of services, hence cost savings.
 Dependability:It determine that clients can depend on companies to obtain their services
and products as when they promised. As they have already acquire products, it may have
affect on whether the customers are back again to make a approaching buy or praise
business to some other.
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In status of dependability, it is more crucial to providing the dependable bringing of
products and services.
 Flexibility: On the basis of client requirement, it match to changing an operation refer as
flexibility. The changing demand of customers for several reasons.
◦ Flexibility of products sue to introduce a modified and new services.
◦ Delivery flexibility is being able to alter the timings of delivery in a services
◦ Volume flexibility encourage the output of a process and being able to makes various
quantities.
 Cost: Cost is crucial factor for administration which vie directly on rates. How much
company is on lower rate manufacture as well as customer facing their lower prices. In
terms of operation principles, the reduction of price is essential in order to beginning can
be equipped to turn some other region of the business.
Polar diagram of Starbucks and Greggs plc on the basis of their performance objectives:
In order to Starbucks and Greggs plc, the recent operation performance of both operations
are discussed below:
Objectives Starbucks Greggs plc
Speed The company is focused is the 'speed of
response'. It spends a lot of time in
improving and measuring. Speed
expectations delivering beverage service
is very low. Customer's wait for the
order.
In context of Starbucks, it deliver
trade good and employment to the
custom-made a institution use
efficacious structural which assist in
punctual transferral of ware without
any disruption.
Flexibility In context of Starbucks, flexibility means
being able change the operation same
manner. In their place customers is in
control of the process, this can make the
order process take longer time but they
alter sales possibility. Therefore the score
is high on product service flexibility.
For bringing the flexibility in the
dealing of Greggs plc, market
analysing which aid to particular the
full conditions and makes goods as
per the needs.
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Quality It helps in distinguishing organization
and their products from challenger as
superior act as an crucial role in client
content. Starbucks adopts TQM and
quality appraisal in order to assure the
root-age quality and effectual time
direction as well as could owed natural
process from customized to evaluate their
execution (Gómez, Martínez and
Martínez, 2017).
For effectual quality of products and
services a establishment use choice
direction techniques to secure the
fantastic choice of bakery items that
fulfil the customers demands.
Cost The cost affects acquiring coffee beans as
Starbucks is particular way about
Arabica beans. As the company have
started increasing own coffee beans that
assist in half note the provider price as
well as organization update technologies
in order to impelling usage of stimulation
and overstate decrement.
Mainly cost are received in this
business is high by long working
hours and elevated amount. For
decreasing that prices a
establishment use value reduction
method.
Dependability For dependability Starbucks may aspect
into the records of guarantee assertion
respect to special merchandise and
services so measurement of product
dependability.
To informed the time, price and cost
of their products a company use
response as well as assurance right
for securing the plane of reliability
of a peculiar good.
3) Design Analysis
The design of service is an thought of customer interaction and business procedures
which create to satisfy the requirement of clients. The demand of customers is the continues
process and development of products because it instantly enhance the experience of client.
Whereas, store layout is determine as a design of floor stores place which are used to
place products into directly influence the client behaviour.
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By the above discussion, its been investigate that the layout decision assist in selecting
the volume dimensions of company which is depend on the size of business operations and aid in
showing visibility also. The organisation will able to get benefits in different changes by making
effective design which is impact of variation of market in which the demand of customers has
changed. Dimension are instantly influence which is related to cost, quality, speed of the services
and products of organisation(Jaca and Psomas, 2015).
There are most of the administration which focus on the satisfaction of customers as well
as experience like Starbucks and Greggs plc. Both company punctuate on the execution objective
by scheming the proper and fascinating layouts. The Starbucks is the global creative group is
likely for the transferring of all in store packaging and collateral which associate to the
marketing and advertising. The process of design of company covers their necessity to implies
the experience of Starbucks . It consider the way in which baristas interact with customers.
PART 2
1) Overview
The supply chain management is a part of operation management which is used in
Starbucks. The supply chain management can refers to the flow of services and goods with in the
management. It also includes the various procedures in which the raw materials are convert into
final products. This management is use by Starbucks which means they use various procedures
in which company use coffee beans as their raw material and make a cup of coffee as a finished
products. The company uses vertically incorporated management to sold their products to the
customers. With the help of this supply chain management, the Starbucks works across the world
with approx 3,00,000 growers. They interact with their growers directly to accomplishing the
goals such as the flavour and quality of coffee can be standardised so that it can increase the
number of customer's. By the contribution of impressive management, it will help the company
to enhance their production by improving their performance in the market.
2) Starbucks global operations strategy and surrounding macro-environment
The surrounding macro-environment and global operations strategy can be analyse by
PESTEL. The PESTEL is used to develop global strategies and to analyse the impact of several
factors for accomplishing the goals of company. The PESTEL can be described below.
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Political factor:- The political factor includes the government policies, tax, law &
regulations, foreign businesses, etc. These political conditions help the Starbucks to expand their
businesses at international level by improving their base (Kauppinen-Räisänen and Grönroos,
2015). Basically, the political factor depends on the sourcing of raw materials. It also help in
analysing the political stability and taxation rate of other countries from which the company
purchase their resources. With this the company can analyse the taxation rate on growers as it
will impact on the sales of coffee with in the market.
Economic factor:- These factors include the exchange & interest rates, rate inflation. The
company need to analyse the economic factors as the changes in rates can increase the decrease
the purchasing power. The company need to aware about the changing in laws of importing and
exporting as it will impacted on company's production (PESTLE Analysis of Starbucks. 2015).
The high in economic factor of other countries ca help the Starbucks to increase their profit and
revenues from different markets. The increase in rate of growers can adversely impact on
company as it also increase in the spending of ingredients with in the company.
Social factor:- The social factor can increase the number of customers by considering the
preference of customers. It includes the taste, nutrition quality and addition of new ingredients
which make the coffee better for customers so that it does not impact on their health. With the
increasing in coffee demand, it helps the company to increase in their revenue. The taste and
nutritional coffee can increase by raising the coffee culture in both upper and middle class
people.
Technological factor:- The Starbucks can increase their productivity by adapting new
technologies wit in the market. The company can increase their annual revenue by supplying
chain which is based on the new technologies. These technologies can be transfer to the coffee
growers so that they can grow coffee in healthy environment. The new technology also includes
the online purchasing from which customers can buy the beverages through online. There are
many app are developed to increase the number of customers.
Legal factor:- The company needs to follow all the legal laws which are addressed by
government. The legal factors can help the company to promote the services by improving their
safety regulations of ingredients and products. The company can also achieve the numbers of
customers by considering the laws of health. They should also ensure not to violate any law of
other countries from which they are sourcing their raw products.
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Environmental factor:- In order to increase the selling of coffee, the company need to
consider the environmental factors like decrease in amount of cup wastage. They should make
strategies to prevent from the wastage of products so that it can't harm the environment. The
quality of beans are depend on its climatic and environmental factors. So the environment while
growing coffee should be appropriate and better.
3) Key requirements, capabilities and challenges
Key requirements:- There are some issues which are faced by business organisation, so
there are key requirements which are necessary to carry out these problems on a regular day
basis. These problems include the changes in products which are not according to customer
preference (Koc and et. al., 2017). It also includes the shortage in products, increase in waste,
shortage in budget, etc. The key requirements of Starbucks includes the deliver of their sources
with hygiene, appropriate plan to deliver their supply, make the products with proper
management and capabilities to perform the task to enhance the performance.
Capabilities:- It includes the capabilities of employee which help in achieving the
objective of company. The capabilities of employees should be value added to the company in
order to built the selling power of Starbucks. With the efficient capabilities, the employees can
enhance their process activities which help the Starbucks to sustain the growth. If the deficiency
of capabilities can occur in the company then the Starbucks can face many problems in their
management. If the employees having high skills and knowledge capabilities then they can help
in increasing the exposure of the company by increasing the quality of products.
Challenges:- There are many challenges occur with in the company which can effect the
revenue of company. These challenges includes the incompatibility in services, unavailability of
proper menu. The unhygienic environment can also developed the issue with the customers
health. These challenges directly impact on decrease in sales and revenue. It also includes the a
healthier and adequate environment to the customers which is faced by company as it increase
the dissatisfaction of customers.
4) Analysis and evaluation of chosen operational area.
The company Starbucks adopt some plans to supply their products as the supply chain
involves the distribution of a cup of coffee. It includes the procedures, some plans, design,
sourcing and delivering to enhance the production of coffee on a large scale. Their process
involves the preparing the raw products, preparing the coffee and parcel the coffee to the outlets
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across the world. They aligning some operations management in order to increase the
communication with service suppliers (Lam and Dai, 2015). In these, some resources are include
which play important role in performance of company. These resources are occur in supply chain
management which influence the objective of Starbucks. The resources which are occur in this
are human resources, financial, physical and technological and these all are described below.
 The human resources are linked with the workers of Starbucks as their skill and
knowledge are responsible in the performance of company. The workers need to learn the
communicate with the customers so that they can make beverage according to the
preference. With the appropriate quality in workers, the Starbucks can achieve the high
level of consistency.
 The physical resources includes the area of location and ambience which can attract the
customers. With this the company can speed-up their performance and helps in
promoting their business. Their strategies include the seating arrangements which make
more favourable to people to purchase the coffee.
 The technological resources depends on the cost, quality, etc. The company need to adapt
the new technologies so that it can help in the reducing the cost which makes all class of
people affordable to purchase it. It also includes the increasing in the quality of products
and speed-up in the services to the customers.
 Financial resources are related to the cost of products in company. If the quality of
products increase then the cost of products also increases. The company implement the
balance between the cost and quality by selling their good quality products at reasonable
prize.
To increase the efficiency level of organisation, it is necessary to analyse the impact of
performance. So this can be analyse by applying the transformational model by Starbucks. The
transformational process model can be defined as it display the factors in detailed (Psomas and
Jaca, 2016). Firstly, it includes the satisfaction of customers whether satisfy with the coffee or
not bys ensuring the smile or aggression on their face while leaving the area. It involves the input
and output process which help in raising the number of customers by monitoring and
controlling the environment.
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5) Recommendations
There are several recommendations which Starbucks is needed to correspond in order to
raise the scope of strategy execution in the firm. Therefore, these recommendations are
expressed below: Cleanliness of counters and coffee desk: Starbucks has their isolated counter that assist
some advances forth things, sugar sachets, mug holders. When customers order coffee
and some other beverages if they demand any additive and this is giving by the staff
member of Starbucks. It would be recommended that in order to make a better critic and
roaster system which will make sure that employees take outlaw showing at coffee desk.
As it enhance the customer service level as well as satisfaction because it is very
important process due to spirit of customers and good service due to employee so they
could attract clients for orders. It will assist to enhancing objective of speed and
performance of customer experience also. Increased seating capacity: It would be suggested that Starbucks, in order to having
outside place and space it focused on increasing the capacity of seating which effect the
client will like to dine in store. As it would effect on procedure of order which will be
provision more to clients at a particular time (Suarez, Calvo-Mora and Roldán, 2016).
The Starbucks opt bean bags, space friendly lounge, comfortable which can be easy
touched as client comfortableness. Customised orders: It would be advisable that giving a assortment in their milk full
skimmed milk, full cream, low fat, soya milk etc. In order to clients message for devising
made-to-order drinkable beverages. At sometimes, almost shop of Starbucks has to be out
of the stocked that is needful by the consumer which will perversely effect on the
performance on company as it bear upon in process of order because of the confusion
rises to the customized and barista. The clients should be made reasonable of their
choices accessible as the company should have appropriate component for selection of
product.
 Process Approach: Some other recommendation for the administration is that appropriate
formulation towards the processing must be adoptive by the firm to assure high ending
quality in procedure. Furthermore, flexibility should also be boosted within the action in
an effectual way to secure suitable and impelling changes within the identical quality.
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CONCLUSION
From the above report, it has been concluded that the operational management plays a
important role to succeed the supply chain in an organisation. In order to raise the strategies of
business, the understanding of four Vs between two organisation can help in the performance of
company. The main importance of this assignment is to consider the supply chain management
as it is consider most crucial in operation management business. In this, the strategies are also
occur that influence the supply chain environment for external business environment. The key
responsibilities, capabilities and challenges are necessary to analyse the input and output of the
company which is required to influence the performance of production with in the company. By
applying transformational process model that can help in examine the performance to get better
production and increment in revenue with in the company.
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REFERENCES
Books and journals
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meaning restructuration. In 9th International Conference on Industrial Engineering and
Operations Management, IEOM 2019 (pp. 678-688). IEOM Society.
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implementation in service organisations. Total Quality Management & Business
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Chang, H.P. and Ma, C.C., 2015. Managing the service brand value of the hotel industry in an
emerging market. International Journal of Hospitality Management. 47. pp.1-13.
Copacino, W.C., 2019. Supply chain management: The basics and beyond. Routledge.
Eriksson, H. and et. al., 2016. Exploring quality challenges and the validity of excellence models.
International Journal of Operations & Production Management. 36(10). pp.1201-1221.
Gómez, J.G., Martínez Costa, M. and Martínez Lorente, Á.R., 2017. EFQM Excellence Model
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Jaca, C. and Psomas, E., 2015. Total quality management practices and performance outcomes in
Spanish service companies. Total Quality Management & Business Excellence. 26(9-
10). pp.958-970.
Kauppinen-Räisänen, H. and Grönroos, C., 2015. Are service marketing models really used in
modern practice?. Journal of Service Management. 26(3). pp.346-371.
Koc, E. and et. al., 2017. The influence of customer participation on service failure perceptions.
Total Quality Management & Business Excellence. 28(3-4). pp.390-404.
Lam, J.S.L. and Dai, J., 2015. Environmental sustainability of logistics service provider: an
ANP-QFD approach. The International Journal of Logistics Management. 26(2).
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Psomas, E.L. and Jaca, C., 2016. The impact of total quality management on service company
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Suarez, E., Calvo-Mora, A. and Roldán, J.L., 2016. The role of strategic planning in excellence
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Online
PESTLE Analysis of Starbucks. 2015. [Online]. Available Through:
<https://pestleanalysis.com/pestle-analysis-of-starbucks/>
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