Effective Management of Service Processes - Essay Example

? Effective Management of Service Processes Introduction A service organisation is an organisation which acts as a third party to a user organisationand provides services to it. Bellagio, a hotel and a casino is chosen as the service organisation in order to address to the pertinent issues in this assignment. The aim of this assignment is to show how the effective management of the service processes, its service, people and resource utilisation has contributed to the success of Bellagio. Management of Service Processes Bellagio follows focus strategy for its services. It is the first hotel in Las Vegas which has shown remarkable quarterly sales revenue and has set record for the same. Bellagio tries to attract the upper middle class of the society or the wealthy customers, by providing them with the best services. Las Vegas is a land for architects. This is because all the hotels here are built in such manner, that they appear to be unique in some or the other way. Bellagio being one of them is not an exception. The quality of its architecture attracts many customers. Bellagio portrays Italian Architecture (Bellagio, 2012a). Its goal is to create such an ambience so that the customers can sense the value of the hotel through its construction (Inland Architect, n. d.). The aim of Bellagio is to focus on the presentation in order to impress its visitors. The hotel should always offer the best infrastructure to its customers, so that they can feel the quality of services offered by the hotel owners. It is due to this reason that Bellagio always tries to advance itself in all aspects so that it appears to be unique to those, who are visiting Las Vegas for the first time. Gaming has always been an important centre of attraction for Bellagio. The main challenge for Bellagio was to attract those visitors who are non-gamers. Apart from its architecture and gamming section, Bellagio is also famous for its wonderful fountains. These fountains were designed by special designers (Bellagio, 2012b). Musicians and expertise performance artists were also invited to choreograph these fountains. In front of Bellagio’s building more than a thousand fountain dances are shown to the visitors. In order to provide satisfaction to the visitors, the hotel organises tours to different destinations. Guests feel the uniqueness of Bellagio as soon as they enter the hotel. The lobby is admirable in its design as well as in its scale. Throughout the hotel colourful flowers have been planted to provide a wonderful feeling to the visitors. The beauty of the garden attracts many visitors and guests. Moreover, Educational Wine Classes have also been introduced by Bellagio in order to provide a better knowledge about wine through different interactive sessions. The wine classes are led by Jason Smith who is the Director of Wine. The program was conducted with the help of various presentations including open discussions with the high profile industrial professionals. The conservatory and botanical gardens of Bellagio make it a holiday destination for most of the visitors (Bellagio, 2012c). The visitors are inspired to get rid of the heat of the East Coast by enhancing the seasonal ambience throughout the resort. The winter displayed at Bellagio is eye catching. Exposure to different seasons inside the resort was a new concept introduced by Bellagio. The rooms of the hotel are redesigned in an advanced way to enhance the guest experience. The entire remodelling of the hotel was done by the design group of MGM Resorts International. The rooms were designed with brighter lights and colours so as to bring a variation in them. It has renovated 2568 rooms in the main tower of the hotel. The approximate cost of remodelling of the rooms was $70 million. The availability of three different colour palettes has further enhanced Bellagio to be one among the world’s iconic resorts. (Source: Hospitality Net, 2012) An interesting fact is that Bellagio also organises art of cooking shows for its visitors. The kitchen is well equipped with proper arrangements for such shows. The visitors find it very interesting to attend these shows and learn from there. The restaurants of Bellagio provide high quality meals. The visitors will not have to visit long distances in search of quality food. Experienced chefs are invited to be a part of Bellagio. Thus there are a large number of services provided to the visitors and the guests. A systematic management of all the service processes is very essential for Bellagio to maintain its position in the market. The marketing strategy that Bellagio follows is to provide the best services to its visitors; but the pricing strategy has been set up in such manner that it suits the need of the upper middle class and the rich people of the society. It has also been seen that maximum visitors visiting at Bellagio belong to the high class society. So the targeted visitors of Bellagio belong to the wealthy sections. In order to provide them with comfort and satisfaction, unique services, programs and shows are arranged. This brings visitors from outside the country as well. Bellagio sets high rates as compared to other hotels in Las Vegas, but in spite of this fact, the visitors are interested to visit the hotel as their holiday destination because of the excellent services provided there, which are not found in any other hotels in Las Vegas. It is promoted among the tourists as one of the luxurious hotel destinations. The promotion of Bellagio is done through various advertisements by the travel agencies. Other media such as television, online advertisements, magazines and newspapers are also utilised. The aim of the hotel is to target the wealthy class and provide them with such attractive services so that they can fully utilise everything they have paid for. It provides luxury ambience and services to its guests and tourists. The aim of Bellagio is not only to meet the requirements of its visitors by providing with beds to sleep but something beyond that. Bellagio has succeeded in achieving its aim of setting itself among the luxurious hotels in the world. Targeting an aim has helped Bellagio to control its overall performance, make improvements whenever required and also to motivate its employees. The number of visitors coming to the hotel every year is remarkable. Gaming is a part of its business. MGM Resort International which is the holding company of Bellagio is a gaming company. So the introduction of gaming helped to attract more visitors. Bellagio is continuously increasing its services to attract more tourists. There are some other features which are added to improve the service excellence. The hotel suits, spa renovation and free spa services helped to receive excellent feedback from the visitors. The renovation of the entire hotel was necessary in order to maintain the reputation after receiving AAA Five Diamonds Award for 11 times. The rooms consist of eco friendly objects like LED lights, reusable towels etc. There are shopping centres in Bellagio which have introduced luxury brands so that the visitors can easily make an access to the luxury brand shops while visiting the hotel. The existence of luxury retailers in the hotel brings more customers. Giorgi Armani Boutique, Prada’s store, Tiffany & Co., Christian Dior are some of the names. Customers rely on the services provided by Bellagio. There are business service centre of Bellagio which helps the customers to communicate and make their preferable choices in an efficient and smooth way. The effective management of the service processes have helped Bellagio to be one of the most famous holiday destinations for the tourists in Las Vegas. The art and architecture of the hotel have always been a reason for its attraction. As the hotel serves the high class society and provides them with comfortable and luxurious experiences, it is beyond the reach of everyone and only invites people who are wealthy. This also helps to maintain its financial stability by earning good revenue. It is very important for the hotel to have a good source of income in order to provide quality service to its customers. It is due to this reason that it sets the wealthy section as its target. Thus the entire management of the service processes of Bellagio including its marketing and pricing strategies have helped it to achieve a remarkable position all over the world. The reputation and goodwill of the hotel is the reason for the increase in the number of visitors every year. One of the limitations of Bellagio can be the number of rooms. If the hotel fails to provide rooms to the interested visitors then it might be a cause of dissatisfaction for them. In order to maintain the position it has achieved, the hotel must get renovated every year and the number of rooms should also be increased depending upon the number of visitors. Bellagio also focuses on the fact that its environment is eco-friendly. The fountains in Bellagio are not only designed for its beauty, but it also helps in balancing the ecosystem. Some of the important measures are using recycle bins, avoiding paper wastage by using napkins and table cloth, installing water saver dishwaters to conserve water, replacement of the incandescent bulbs with LED bulbs etc. Bellagio takes the responsibility of recycling almost 50 percent of its wastes. The conservatory and botanical gardens help in the environment protection as well. There are green fairs where the employees are taught to conserve natural resources. Thus it not only focuses on its success but also is aware of the fact that their services should not cause any harm to the environment. Bellagio follows a focussed strategy by setting the hotel industry as its target market. It is very important for a company following focus strategy to provide quality services or products to its customers in order to achieve competitive advantage over its competitors. A systematic management of the service processes along with providing quality services is very important. Service People Bellagio possesses service people with good performance quality. The performance of the employees of Bellagio helps to bring in more visitors. It provides employment to a large number of people. If the performance of the employees is a cause of satisfaction to the visitors then it helps the hotel to retain these visitors. Bellagio motivates its employees to perform better and reach the target level. It guides its employees to improve their performance and build a good communication power. A good communication skill is very important for the employees of the hotel in order to bring in more business. Bellagio provides scope to various designers and artists and motivates them. For example, Bellagio invites special designers and artists to design and choreograph its fountain. Moreover, it conducts shows where the cooks show the art of cooking. In this way the employees are given opportunities to show their excellence. This brings more efficiency among its employees. Furthermore, Bellagio fixes rewards for its employees based on their performances. Rewarding the employees based on their performances motivates them to work more efficiently (Poster and Scannella, 2001). This encourages them to perform in an efficient manner and brings employee satisfaction which increases their level of commitment towards Bellagio. According to Hersey and Blanchard (1988), employee satisfaction and employee motivation are two opposite sides of the same coin. In order to make the employees perform in a better way they should be appreciated for their good performances and rewarded. This will motivate them to work better. It is their level of commitment that decides their performance level. Employee commitment can increase the performance of the hotel. If the work culture of a company is positive then employees find it comfortable to work for that company. The work culture of Bellagio enhances its employee engagement. A proper interaction between the management and its employees helps the employees to perform efficiently. Resource Capacity Research scholars such as Dierickx & Cool (1989), Grant (1991), Barney (1986) and Rumelt (1986) have said that resource capability of a company plays an important role in achieving competitive advantage over its competitors. It is the resource capability of a company which determines how effectively it can finance, to provide quality services to its customers. Apart from the service processes and the service people, the resource capability of Bellagio has helped it to achieve its target. The tangible resources, intangible resources and the capabilities of Bellagio have played an important role in its success. A combination of all the three resources is required to bring success to the company. Tangible resources are the tangible goods which help a company to operate its business. Tangible resources include raw materials, logistics capabilities, proper management of services and capital (Peng, 2010). Bellagio maintains sufficient amount of capital in order to continue its operations. It provides plenty of services to its visitors and has a planned and systematic framework for the management of its services. The infrastructure of Bellagio providing excellent services to its visitors, have played a significant role in achieving success to its business. Restaurants and different services provided by the hotel bring in a good amount of revenue for the hotel. Intangible assets are those which do not possess any physical existence. Intangible resources include goodwill, patent, brand equity, reputation, work force etc (Warren, 2009). Bellagio is built on the ground of Hotel Dunes which itself possesses a high brand name. Thus it can be said that the hotel has earned its goodwill before its formation. Moreover, MGM International, the parent company of Bellagio, had an aim of achieving a remarkable position in the world through its subsidiary. The excellent service quality of Bellagio has helped it not only to earn high revenues, but also to earn a high brand name and goodwill. The goodwill of a company depends on the excellent service which is spread through word of mouth (Cruz, 2006; EmporisGmbh, 2012). It also uses its human resources in providing the best services to its visitors. Bellagio has achieved the skills to provide innovative service to its customers and also improve its financial performance. The technological capabilities have helped it to provide new and unique services which are not available in every hotel. Bellagio uses its physical assets to finance its strategic decisions. Human resource capability of the hotel can be considered as another capability. Bellagio uses its human resource capability in an efficient manner to gain competitive advantage over its competitors. Employee capability is an inimitable resource. Bellagio employs more than 10000 employees. The efficiency of its employees has helped to achieve customer satisfaction. VRIO Framework Valuable Rare Difficult to imitate Exploited Sustainable comparative advantage Temporary comparative advantage Human Resource Yes No Yes No No Yes Infrastructure Yes Yes Yes Yes Yes No Financial Capability Yes No No No No N/A Service Mix Yes Yes Yes Yes Yes No References Barney, J. B., 1986. Strategic factor markets: Expectations, luck, and business strategy. Management Science, 32, pp. 1231-1241. Bellagio, 2012a. A Walk Through Bellagio. [Online] Available at: < http://www.bellagio.com/press-room/press-releases.aspx> [Accessed 14 February 2013]. Bellagio, 2012b. Fountains of Bellagio. [Online] Available at: [Accessed 14 February 2013]. Bellagio, 2012c. Conservatory & Botanical Gardens. [Online] Available at: [Accessed 14 February 2013]. Cruz, J., 2006. Desert Wars. [Online] Available at: [Accessed 14 February 2013]. Dierickx, I. and Cool, K., 1989. Asset stock accumulation and sustainability of competitive advantage. Management Science, 35(12), pp. 1504-1511. EmporisGmbh., 2012. Bellagio Resort & Casino. [Online] Available at: [Accessed 14 February 2013]. Grant, R. M., 1991. A resource based perspective of competitive advantage. California Management Review, 33, pp. 114-135. Hersey, P. and Blanchard, K., 1988. Management of Organisational Behaviour. London: Prentice Hall. Hospitality Net, 2012. Bellagio Begins Room and Suite Remodel in Resort's Spa Tower. [Online] Available at: [Accessed 14 February 2013]. Inland Architect, No Date. Big, Bigger and Bellagio. [pdf] Available at: < http://inlandarchitectmag.com/pdf/Bellagio.pdf> [Accessed 14 February 2013]. Las Vegas Review Journal, 2010. Bellagio Earns 10th Straight AAA Five Diamond Award. [Online] Available at: [Accessed 14 February 2013]. MGM Resorts International, 2012. Fountains of Bellagio. [Online] Available at: [Accessed 14 February 2013]. Peng, M. W., 2010. Strategic Management: Competitiveness & Globalization: Concepts. Stamford, Connecticut: Cengage Learning. Poster, C. Z. and Scannella, J., 2001. Total Rewards in an Ideal World. BENEFITS QUARTERLY, 3rd quarter, pp. 23-29. Rumelt, R. P., 1986. Strategy, Structure, and Economic Performance. Harvard: Harvard Business School Press. Saving America's Mustangs Foundation, 2012. SAM Welcomes Steve and Andrea Wynn to Advisory Board. [Online] Available at: [Accessed 14 February 2013]. Warren, K. C., 2009. Developing Employee Talent to Perform: People Power. New York: Business Expert Press. Appendix An Overview of Bellagio Bellagio was inaugurated on October 15, 1998. It was built by Steve Wynn and his company called Mirage Resorts. It was built after the demolition of a hotel and casino called Dunes (Saving America's Mustangs Foundation, 2012). It was designed by Atlandia Design and DeRuyter Butler. The construction cost of the hotel was $1.6 billion. The hotel was built on the grounds of Hotel Dunes. Hotel Dunes was suffering from huge revenue losses. It had to borrow money in order to continue its operations. It started conducting topless shows known as Minsky’s Follies in order to attract the customers. But the efforts made could not make the hotel survive for long. The hotel again started making losses and it was difficult to run the casino. It is due to this reason that the owner of the hotel, Minsky Follies was in huge debt and he decided to sell the hotel to Steve Wynn. The construction of Bellagio started in the year 1994. In the year 2000, MGM Mirage Resorts owned the property of Bellagio. In 2006 the casino was changed completely in order to give out a more elegant look. There was a remodelling done for 2500 rooms. The hotel not only provides satisfactory services to its own customers, but is also famous for its restaurants. The hotel succeeded in winning AAA five Diamond Award 11 times (Las Vegas Review Journal, 2010). It is currently employing more than 10000 employees and millions of people visit the hotel every year. The hotel is also well known for its fountains, popularly called ‘O’ (MGM Resorts International, 2012). The hotel also gains attractions of the customers because of its quality of architecture. This hotel provides one of the best infrastructures to its customers. Read More