Students must consider the following points in order to complete the assessment:
- Overview of the company.
- Explain the global operational strategy and surrounding macro-environment of Starbucks.
- Enlist the requirements, capabilities and challenges for the company.
- Analyse and evaluate the operational areas of the chosen business.
- Give a recommendation with an appropriate conclusion.
INTRODUCTION
Operations management is a process which is concerned with planning which can be used to achieve more profits. This is basically a process which is used for conversion of available resources with a company in a more effective manner. This report is based on a global coffee chain which is having presence in approx 80 countries, also they have around 30 thousand outlets located across world ' (Melnyk, , Flynn, and Awaysheh, 2018). Gordon Bowker and Zev Siegel are who laid the foundation of Starbucks. In this report two companies Satrbucks and Greggs have been taken into consideration. Firstly four V analysis is done, and then there is comparative performance and design analysis (Koh,., Orzes, and Jia, 2019). In the second part of the report there is discussion on the global strategy and various macro environmental factors which affect Starbucks are discussed. Apart from this various requirements, challenges and capabilities. Supply chain management as a process is selected and discussed in this report.
TASK A
Comparative Four Vs Analysis
The following analysis is the analysis with the help of which it is possible to make the conversion of every resource and raw material in a productive output and these has been classified into four attributes (Nair,and Reedâ Tsochas, 2019). The statement is right that every business requires to have some common elements for the effective working of the organisation such as raw material, equipment, money and also which will be converted in the finished products as well. These four dimensions are visibility, volume, variety and variation. These four dimensions provides their customers and the company as well with the value and also creates efficiency in the work of their processes as well. With the help of this, it will be possible to make the achievement of the goals and objectives of their organisation to be possible (Bozarth, and Handfield, 2019). The effectiveness of this analysis will also be provided in the context of tow different organisations which are Starbucks and Greggs. So the description of the difference is being provided as under:
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Four Vs Elements |
Starbucks |
Greggs |
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Volume |
In the very first element of this analysis, the importance is related to the low cost and high production. In other words, it says that the company should produce high quantity of products and services along with low cost of production. This could only be possible when the company makes the production on high level basis. By bulk manufacturing, the company will be able to lower their per unit cost of production (Joglekar, , Davies, and Anderson, 2016) . |
While taking about Greggs, the company wants to make improvement in the level of their production because the company wants to make increment in their profits in order to increase their market share along with their profitability as well. Greggs with the help of bulk manufacturing will be able to increase their production as well as to lower down their per unit cost of production (Rossetti, 2019). |
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Variety |
The discussion in the second element is related to the introduction of new products and services by the company with the help of which it will be possible to provide the customers with new and different kinds of products and services that ill provide the organisation with more customers and more profitability as well (Khan and Wisner, 2019). |
For Greggs, it is important to make development in the range of their food items and provide their customers with different range of products and services so that their satisfaction could be positively effected and they could be provided more with their needs and demands. |
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Variation |
According to this component, managers need to include varieties in their products and ventures. In reference to Starbucks, directors create one of a kind highlights in their present products offered by them (Kumar, Tiffany. and Vaidya 2016). This accordingly, need advancement just as innovativeness inside their present products and contributions. |
The third element of 4 Vs says that so as to impact enormous number of clients, directors of Greggs need to include some new flavour or component in their present food products. This will help them in drawing in huge number of new clients towards their organisation. |
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Visibility |
It is the component wherein client will have the option to follow the request put by them inside stipulated time period. This is the technique which should be embraced by the supervisory crew of Starbucks (Jabbour and Sousa Jabbour, ., 2016). For instance if a client put in their request through online sources, they can without much of a stretch recognize the present area of their product. |
It is the last component where clients will have the option to effectively noticeable the items and administrations offered by them. In this specific circumstance, Greggs have their physical stores where they offer their nourishment things to the shoppers in a customary technique. |
Comparative Performance Objectives Analysis
It can be said that there are many objectives which have to be followed in a company and also adopted by top authorities of both the companies ( Sarkis, 2017). Major focus of company is always on their workforce as they are the key resources and most essential factor of production in every company. Some of important performance objectives are mentioned below:
- Quality: in context with Starbucks they have to maintain high quality so that they are bale to attract large number of customers and retain them for a longer period of time. Starbucks has a separate department of quality management which helps them in maintenance of and improvement of quality (Rumble, 2019). In Greggs they mainly deal in bakery products which helps them in maintain quality of their products so that they are having a established position in market.
- Cost: Majority of cost of Starbucks is with regards to there raw material which is the coffee beans which is main ingredient of this coffee giant. They make attempts to minimize this cost so that overall profitability level can be maintained in the company. In Greggs cost is associated with raw material requirements of this company to make various bakery products. To reduce their overall cost of production manager of this company need to focus on bulk production or production in large quantities so that overall cost can be maintained.
- Flexibility: This element is concerned with speed and flexibility these two factors are highly interrelated to each other. Manager in Starbucks have to be very flexible so that they are able to change themselves or modify their policies according to changing conditions of external environment. This has a major impact on Starbucks as whenever they are entering into a new country those brand has to adapt themselves with culture of that particular country. In Greggs this will be helpful for this brand in adapting themselves with the various requirement of market so that they are able to survive for a longer period of time (Kumar, Tiffany. and Vaidya 2016).
- Speed: this is one element which is related to customer experience as for how much a time a particular customer has to wait in a outlet determines the level of satisfaction achieved by that customer. Starbucks has successfully bale to install a system which is helping them to reduce the waiting time starting from their order to the final product being perceived by the customer. This has lead to increase in satisfaction level of their customers. In Greggs, managers posses strong channels of communication which helps them in increasing and maintain their level of profitability (Khan and Wisner, 2019).
- Innovation: It has been one of key cultures in Starbucks as this has helped them in creation if a strong customer base. This is a global coffee brand and they are selling their coffee & espresso in approx 75 countries. This company has also become famous because of innovation which they have done as compared to another brands who are dealing into similar products, such as Costa coffee. They write the name of their customers on their coffee mugs which is a promotional Strategy used by this brand so that their customers click it and post it on social media platforms so that it will lead to promotion of their brand.
Above discussed are some of the elements which is helping the company in adopting factors so that they are able to maintain their sustainability level and reputation in the competitive market. This is also assisting mangers in achievement of a competitive advantage so that goals can be accomplished in a appropriate manner.
Design Analysis
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Impact on the design of customer service process
Customer service is refers to range of customer services which is used in assisting their customers so that they can be prepared how to use a particular product. This is very helpful in overall process which is starting from planning, implementing, training, maintenance and disposal of various goods & services. Customer services is a segment which deals with various organisation goals to maintain satisfaction level of their customers. On Starbucks this is a requirement that management team is providing services before and after purchase which can help in maintaining the satisfaction level of customers (Rossetti, 2019). Such as this company is taking regular feedbacks and review from their customers so that they are performing functions in accordance with their requirement and expectations only. In Greggs this company is using this method so that they can have a positive impact on their mindset which leads to reaped visit and positive mouth publicity by their loyal customers. This is a brand which focuses on having adequate quality standards but they don't have much emphasis on making customized products. On other hand, Starbucks has always made efforts on customizing their products by making them available to their customers based on their choices. This has been major reason why people are getting attracted towards this brand of coffee in comparison with other brands.
With help of such customer require and response of customers mangers can modify their products which will help them in retaining of their customers for a longer period of time (Koh,., Orzes, and Jia, 2019).
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Impact on the design of store layout and flow
It is a requirement that every organisation must have a design or appropriate structure so that they can attract more customers with help of their store design. Physical and online stores can help in attract customers and then in maintenance of reputation in the market. In Starbucks this brand is having many physical stores which they are using to attract more customers. They are having a store layout which is very unique from their other competitors and this is of great help for them in providing a different and best ambience to their customers (Fredendall and Hill, , 2016). Physical appearance of a store plays a very crucial role in attaining customer and retain them for a longer period of time in the organisation. This is a method which helps in creation of a design which will lead to attraction of more customers towards them. This is very helpful in establishment of long term relationship with customers for a brand like Starbucks. This is also helpful in customer loyalty as there is a relationship build between customers and the brand which is playing a very important role for Starbucks.
In Greggs managers are dealing in bakery products which they are having presence online and offline platforms. This is helpful for the company in getting a competitive advantage and achievement of overall growth and development (Melnyk, , Flynn, and Awaysheh, 2018). They do not focus much on having a very attractive layout of their stores which leads to a situation.
TASK B
Overview
Quality management is a Quality management is a approach which is used by Starbucks so that they are able to provide best quality product and services to their target customers (Nair,and ReedTsochas, 2019). This is a function which deals with controlling of quality, improvement in quality and is also focussing on planning all the functions which are very necessary for maintenance of overall quality.
Global operations strategy of Starbucks and overall macro environment
Starbucks is a leading brand of coffee and they are having a continuous growth throughout all these years since their establishment (Bozarth, and Handfield, 2019). As this company is having continuous profits the major strategy which this brand is using is the maintenance of consistency in their products which is helping them to keep their customer loyal towards them. Overall success which Starbucks has experienced through these years reflects that how qualitative they have made their effective strategies which can help grapple with their various competitive brands. Quality maintenance is a big tool which has been used by Starbucks in maintenance of their profits. Expansion across different countries is a tasks which requires lot of aspects which has to be taken into consideration and there are many issues which are discussed below:
- High economic growth: There is a very high economic growth in many parts of the world which will lead to more opportunities for Starbucks as they can enter such countries and this can help them in having high percentage of profits (Joglekar, , Davies, and Anderson, 2016).
- Technological changes: there is lot of opportunity for Starbucks as technological advancements can help in more effectiveness in the overall operations of this brand which will lead to increase in their market share and reduction of cost which will lead to increase in revenue.
Above mentioned are some of the points which is very helpful for Starbucks both in a negative and positive manner and this depend on the company how to deal with such type of situations.
Key requirements, challenges & Capabilities
Key requirements: In case of quality management as a tool the most important requirements are discussed below:
- Product based view: The company must use product based view so that they are able to maintain the quality standards. This view is very important so that quality can be viewed as a attribute which can be quantified this will be of great help as quantified attributes can be measured and achieved more easily as compared to qualitative aspects (Jabbour and Sousa Jabbour, ., 2016).
- Value based view: This is also a view which is related to purchase decision of customers. If Starbucks will be able to provide products at appropriate quality standards then it will help them in providing required value to their customers. This will help them in accepting the product according to prices at which they are offered by Starbucks. When customers will be experiencing more and increased value then it will lead to increase in overall Brand image of Starbucks.
- Manufacturing based view: In this effort have to be made by Starbucks by maintenance if quality since their initial step which is manufacturing if product. This is a tool which will help in adoption of adequate quality in the manufacturing a stage itself this will lead to best quality in the final product which is being served to the customers.
Challenges for Starbucks:
Maintaining quality is a feature which must be adopted by Starbucks as their strategy to increase their sales and profits. This is not a easy task and there are many hurdles and challenges which they have to deal with in order to achieve their objectives (Sarkis, 2017). Some of the challenges which are faced by Starbucks is discussed below:
- Global measuring system: There is a requirement that there has to be system in which the overall quality across all their outlets which are present across globe are measured which can help this brand in maintaining a fixed quality of their products in all their outlets. This is a big challenge as it becomes very difficult to manage large number of outlets and quality of their products to be same as many time there has to be modification one base done cultural differences and preference of customers prevailing in different countries.
- Continuous evaluation system: There has to be a system which can be used fir continuously management of quality department of he company (Rumble, 2019). Quality maintenance is not a one time activity or one time process but this is a function which has to be carried in in the company in a continuous manner. This acts as a big challenge as there is lot of resources in terms of financial and human which company has to continuously invest so that their overall procedure of quality maintenance is taking place.
- Similar suppliers worldwide: For having a similar quality standards to be followed it is also necessary that the raw material being used is also same. For this there is a requirement that same suppliers are supplying raw materials to each of their outlet again this is a very challenging task because it is very difficult for having same suppliers all through their outlets. Which leads to a situation of difficulties in maintain similar quality standards by Starbucks in their products.
Evaluation and Analysis
From above discussed points it can be evaluated that for Starbucks quality is everything and the most important aspect which is used by this brand so that they are able to attract more customers and have large share of market with them. Many efforts are made by this brand which is helping them in achievement of their objectives (Meredith Mantel and Shafer, 2017). They are spending a time period if approximately 18 weeks every year by visiting various coffee suppliers and growers to make suer that the coffee beans which they operating producing are according to the required quality standards of Starbucks. Evaluation of present process of quality improvement in case of Starbucks is understood based on below discussed points:
- Consideration of quality and cost: Starbucks is successfully maintain quality by also having cost control which means they are investing their resources in such a manner that they are able to utilise them in optimum manner. This leads to establishment of effectiveness in all the functions of company and achievement of their profits targets.
- Commitment: In comparison with competitive brands it is seen that the commitment level which Starbucks has is rarely seen in companies. All their stakeholders including their investors, shareholders, creditors, debtors, employees, top authorities are having a very strong level of commitment towards achievement of their objectives. This is a positive aspect of this brand which makes it feasible for them to achieve their objectives in the stipulated time.
- Development of strategies: Starbucks has always been very consistent in developing strategies for maintenance of quality so that they are providing genuine services, inviting atmosphere and a superb products which is fulfilling the expectation of their customers.
- System of random checks: Starbucks is a brand which is using a system of random checks which is done by various district managers where their major responsibility is to check the baristas, getting information from various customers, taking feedback from them and checking drinks so that they are able to ensure that required quality so being maintained in a particular outlet (Thomé, Scavarda. and Scavarda, 2016).
- Achievements: Maintenance of quality standards is a aspect which is used by Starbucks to get a larger share in market. Starbucks has been able to achieve a good brand image in the market because of quality of their products. They have achieved many prestigious awards & also recognized as “Best coffee” because of their quality standards which they are maintain in their products.
- Exceptional quality if raw materials: Starbucks is using a exceptional quality of coffee beans so that their customers can experience a unique and best taste of coffee flavour which is different from other similar brands. This is a differentiation strategy which is adopted by Starbucks so that they are having a differentiation advantage to survive in this competitive market (Bromiley, and Rau, 2016).
- Segmentation of market: This is also one of approach which is used by Starbucks in which they are trying to segment their target market and based on that they focus on heir product bundle. Schultz who is the founder of Starbucks always makes attempts that their are bringing innovation ideas which can help this brand in expanding portfolio of their products. Strategic quality ideas this coffee giant is showing no decline in their profitability percentage and is also expected that they will be able to successfully notch another consecutive sales growth in the year.
- Diversity of thought & approach: This is also a approach which is used by Starbucks in which they have are building teams which are very effective and with innovative robust ideas. This helps in motivating their employees as they can help in having a passion in their employees so that they can make efforts towards developing their brand. This will also help in sense of challenge which will lead to creation of a learning atmosphere in organisation (Heizer, 2016).
- Make time for coffee education: It is the responsibility of Starbucks that they have to make education experience fir their customers so that they are able to make them aware and create a enthusiasm amongst their target customers with reference to love for coffee. On of the most essential ways is to develop programs such as coffee master which can teach their customers how can they experience a innovative experience of coffee.
- Increase awareness of great things Starbucks has to do for local communities: many customers and partners do not posses information that Starbucks has local volunteering and anybody can find a project related with community service. Very few parameters & customers are having a knowledge that “community stores” share profit with some locval non profit. So it is responsibility of Starbucks to bring awareness with this regard.
Above discussed points are based on overall evaluation of Starbucks which this brand is doing in order to achieve their quality levels and then survive in the market while maintaining their profitability level for a longer period of time.
Recommendations
There are many recommendation which rae being made by analysis of above discussed factors such as:
- There is a need to adopt some of the services when there are large number of customers which is affecting their sales (Reid,and Sanders, , 2019). Such improvement in quality standards will help this company in improving their standards and process of supply chain.
- The overall appeal to customers has to be made better so that they ate able to increase their sales and market share. This is a tool which will help in having a category of customers who are educated, cultured and technologically interested in having a huge customer base. This will be helpful in increasing overall brand image of their Starbucks.
- Quality is maintained in Starbucks but this is not only enough apart from that there is a requirements that a system of continuous improvement is also adopted by this company which can help in having a consistent quality in all their outlets across world.
- There is a presence of threat from various competitors which can impact negatively the products of Starbucks such as they could develop beverages which are low in price and this may impact the sales of Starbucks. Hence, it is the responsibility of this brand that they have to analyse such factors which can posses a threat because of such small competitors present in the market. It is usually seen that all organisation notice strong and big competitors but they ignore such small competitors who may emerge and then create a threat for organisations (Slack and Brandon-Jones, 2018).
- It has also becoming important for Starbucks that they must start focussing on adding more time which is non coverage. This means that Starbucks is willing to see specifically time which is non-coverage for cleaning, coffee tasting, education training etc.
CONCLUSION
This report is based on different aspects of companies which is related with their process of management of their operations. There are many aspects which is having a affect on overall functioning of the company such process of supply chain management, improvement
& maintenance of quality standards this results into positive or negative brand image if a partui8culr brand. Quality management is a process which is very helpful for companies in improving their brand image and also for carrying of their functions in a more effective manner. So that overall objectives can be achieved in the specified time period.
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