Caffe NERO Performance Objectives - Case Study Example

Caffe NERO Contents Contents 2 Introduction 3 Performance objectives 4 Quality 4 Speed 4 Dependability 5 Flexibility 5 Cost 5 Most important 6 Demand fluctuation 6 How are they handled 7 Perception and expectation of quality 8 Issues might arise 9 Evidence of performance objectives and their improvements 10 Conclusion 11 References 13 Introduction Caffe NERO is an UK based coffee house brand. The store has expertise or specialization in creation of the high quality Italian coffee. The operation of the store is based on simple philosophy of providing good quality foods and superior services to the customers. The coffee house has a core belief of offering good atmosphere and state of the art facilities to their customers. The cafe was found in 1990. Headquarter of the store is in London. Ian Semp was the founder of the coffee house brand. In 1997 the company was sold to a consortium of investors. Over the years the whole organization has focused their business operations in the UK markets. Currently the organization has 600 stores across UK. Lincolns Caffe NERO is one of them. The cafe chain has international presence also. The company has branches in Cyprus, Middle East Ireland, Poland, Turkey, and the United States. It is a private organization limited by shares. In 2001 the organization was registered in the London Stock exchange. Over the years the organization has gained significant reorganization. In 2005 Business Week Magazine ranked the organization as the 20th fastest growing company in the European market. Lincolns Caffe NERO deals with lots of products like Coffee, Frappe, Espresso, Caffè Latte and Mocha. Over the years the store has managed its business operations quite remarkably. In the coffee shop industry there is cut throat competitions. But with their extensive business operations the Lincoln based store has managed competitive sustainability. According to annual report of 2013, revenue of the London based Coffee shop chain was £227.9 million GBP. Over the years the store has shown significant importance towards the arts and music. Performance objectives Quality Quality is an important performance objective for Cafe NERO. The store spends significant time, money and energy for the selections and buying process of the coffee beans. Selecting and buying highest quality coffee beans is an integral part of the organizational performance objectives and it is properly reflects in the Lincoln store also. Due to the highest quality the organization as well as the store have award winning Caffè Nero blend. To manage the high quality coffee beans the store uses experts and experienced persons. The organization has ISO and BRC certification. All these certifications are indicating quality related focus of the store. This performance objective is highly taken care of by the store in their business operations. Speed Lincolns Caffe NERO takes care of the speed of the services. Customers of the local communities come to the shop of the Lincolns Caffe NERO in high street to spend their time in jovial way. The shop believes in the speedy services to the customers. Waiting time in the shop is reasonable. On time speedy service delivery is one of the most important performance objectives for the High Street shop. Over the years the shop has improved its service speeds significantly. The store is trying consistently to reduce its lead time to serve the customers. Dependability Caffe Nero shop of High Street has significant dependability on its staffs. The shop has fantastic dedicated people to run it. The store has enough scopes of manual operations. So dependency on the staffs is quite obvious. Apart from the staffs the store has to depend on the various suppliers and vendors of the different raw materials. Vendors and suppliers maintain the supply for the store to run the business operations. Billing and other order related processes are being done with the help of computers and internet. So the shop has substantial dependency on various technologies also. Flexibility Flexibility is also an important performance objective for the shop. In their services the store provides lots of flexibilities. Taking order, adjusting orders and order cancelations are being done in flexible ways. In their store atmosphere also the shop provides lots of flexibilities. Due to its informal nature the store offers lots of flexibilities in terms of sitting arrangements. The branch has flexibilities in terms of payment systems also. Both cash and cards are being accepted inside store for the payment purposes. In weekends opening and closing time of the shop is little bit different than the weekdays. Cost Costs of the products are little bit on the higher side. Prices of the coffee and cakes of the stores are on the higher sides than the other competitors. As far as the cost effectiveness of the operation is concerned, Lincolns Caffe NERO gives significant focuses towards the optimum utilization of the resources. With their state of the art operation procedures and experienced workforces the store has able to reduce its operating costs significantly (Nahmias, 2009). The store has introduced latest modern coffee makers to reduce their energy related costs. Most important Quality of the products and dependability are the most important performance objectives for the stores. Quality products of the store are significantly responsible for the revenue earning of the store. It increases customer loyalty for the High Street store. Quality of products encourages revisits from the side of the customers. Without the supply from the vendors or suppliers the store cannot operate, it has made dependability one of the most important performance objectives. Demand fluctuation In any business demands fluctuate from time to time. Being a business store Caffe NERO also experience demands fluctuations. It is often being noticed that during the evening time of weekends the store is heavily crowded. Customers from the local areas and outskirts of Lincoln come and spend their leisure times over there. During that period of time demands of the various products are quite high. Numbers of orders are also high during that period of time. On the other hand during the early morning time of the weekday’s demands is less because customers at that point of time remain busy for attending their workplaces. During the time of Christmas and on the eve of New Year’s generally footfall of the customers are on the higher sides than the normal time of the year. The store experiences high demands of the products in those days. Demands of the products fluctuate according to the preferences of the customers as well. Young people generally like hot chocolate, cakes and Mocha of the store. When young customers are more in number in the store then demands of all the above products are significantly high in compare to other products. Elderly people generally like Coffee, Frappe and Espresso. So when there are high numbers of elderly people in the store then automatically all these products are having high demands. During the time of any natural calamity demands are significantly low. Demand fluctuation is a common thing in this case. But it is not at all drastic in nature. All the above situations are significantly indicating various situations under which demands of the store fluctuate. How are they handled Handling demand fluctuation is an important factor as far as the Caffe NERO is concerned. Over the years the store has managed its demand fluctuation proficiently. During the time of busy hours the store handles high numbers of customers without making them wait for the longer period of time. During the busy time when the demand is high then the store uses all of resources both human and technological for catering the demands of the customers online. The organization follows FIFO systems. It helps the store to offer the services and products on time. Whatever may be the demand situation the store follows its standard operating procedures all the time. It helps the shop to manage the demand fluctuation. Quality of products and services is the most important factor as far as the Caffe NERO is concerned. Offering quality products and services is a core competency for the store. Even during the busy hours of the weekends or during the festive seasons also the above two core competencies are taken care of properly. The store manages highest level of readiness. The demands fluctuate on the basis of demography also. Preferences of the young people are significantly different than the preferences of the elderly people. To manage this kind demand fluctuation the organization always maintains higher level of preparedness for any kind of possible orders at any quantity. They manage enough inventories and raw materials for handling increasing demand. During the morning time of the weekdays the store does not use all of its technical resources like coffee machines and other operational instruments. The store keeps less stocks of the raw material during the time of any natural disaster. Perception and expectation of quality Being a reputed store in the Lincoln area, expectations from the store is quite high. Prices of the products are on the higher side, so customers of the store expect high quality of services and products from Caffe NERO. Store atmospheres are important factors as far as the customer expectation is concerned. Customers generally expect quality ambiences from the store. Being a coffee house comfortable feeling inside the store is a fundamental expectation. Feeling of comfort related with the sitting arrangements and lighting is also important expectations for the customers (Zeithaml, 2010). Polite and helpful behaviours of the staffs are also basic expectations from the store based in High Street. Less waiting time for the order is one of the highest priority expectations from the stores (Ma, 2014). Overall cleanliness is also an expectation that the customers have from the store. As far as the quality of the products and services are concerned customers of Lincoln’s Caffe NERO have high regards for the services and products that they come across inside the store. (Source: Tripadvisor, 2014) The above ratings are providing perceptions of the customers related with the various expectations. The above picture is clearly indicating that as far as food, services and atmosphere are concerned customer’s perceptions are significantly high and customers have high regards for the store (Caffe NERO, 2014). The above picture is categorically indicating that as far as the value creation is concerned customer’s perception for the store is also on the higher side. Customer’s perceptions related with the staff’s behaviours are also high. Chairs and sofas inside the store are quite comfortable in nature. It is absolutely suitable with the expectations of the customers. All the above discussions are clearly indicating that there are very less gap between the customers’ expectations and their real perceptions. Issues might arise If there are big gaps between customers’ expectations and real perceptions then lots of issues might arise. It might reduce the popularity and image of the store. It can reduce the number of customers. If the customers are reduced then automatically revenue of the store will reduce. If behaviours of the staffs are not up to the expectation levels of the customers then the customers will not get satisfaction out of their services (Grigoroudis and Siskos, 2009). If the customers are not satisfied then they will never revisit the store. Customers are paying higher money for getting quality products and services in the store. If they do not find worth values for their money then automatically their interests related with the store will go down. It can result into sale loss for Lincolns Caffe NERO. If gap related with service delivery time expectation and real perception is high then it can increase the waiting time for the customers inside the store. Once the waiting time is increased, it may irritate customers because they generally have other schedules as well. High gap between expectations and perceptions related with sitting arrangements inside the store is not at all desirable (Kellow, Costain and Beeken, 2011). If high gap exists between these two that means customers cannot enjoy their coffee or foods comfortably. It can be a dangerous issue that might arise for the High Street based store. Level of happiness is significantly important for the shop. But high gap between expectations and real perceptions reduces that level of happiness. Level of happiness is significantly responsible for consumer buying behaviours. If customers of Lincolns Caffe NERO do not get satisfaction or happiness during their stays in the store, it can create lots of additional concerns and issues. Evidence of performance objectives and their improvements Performance objectives are highly evident within the boundary of the operation of Lincolns Caffe NERO. All the previous questions have highlighted the quality related factors that the organization is managing. The study has shown that the quality related gap between expectation and perception is low. There is no shadow of doubt that quality is such a performance objective that is highly taken care of by the store. Caffe NERO as group has got several quality related certificates including ISO, BRC and CSC (Ellis, 2011). Being a branch of the mother group that quality factor is clearly evident in the Lincoln store also. The report has categorically pointed out towards the prompt services of the staffs. It has also given significant focuses towards the less waiting time during the time of demand fluctuation. Experiences and expertise of the staffs are also been discussed. In terms of speed of the services gap between expectations and the perception is less. All these arguments are clearly indicating that this performance objective is also evident in the operation. The study has clearly highlighted various operational dependability’s in terms human resources, suppliers and technologies. Being a coffee house store in every step of value addition the store has significant dependencies on various factors. In every stage of their operation those dependencies get shifted from one factor to another. So dependability is quite evident in the operation of Lincolns Caffe NERO. The Lincoln based store has enough flexibilities. The study has indicated how the store manages demand fluctuations with the help of flexibility. It has also indicated that after ordering something the order can be adjusted and cancelled easily and payments can be done with the help of cash and cards. All these are clear cut examples of operational flexibilities. Even sitting arrangements of the store is also significantly comfortable and there is enough scope of flexibilities in this factor also. So this performance objective is really present in the store. It has very less gap between expectation and perception level. Cost is last but certainly not the least performance of objective for the company. The report has categorically indicated that in their business operations Lincolns Caffe NERO always tries to manage cost effectiveness. Highly experienced workforce and usage of the less energy consuming technologies are the evidences for this performance objective. The study has shown that during the time of natural calamities the store keep less inventories which has been significantly fruitful and cost effective for the High Street based store. From the customer’s point of view they get expected values for their money from the products and services of the store. All these arguments are clearly indicating that cost as a performance objective is highly evident in the overall operations of the store. The store should try to improve the quality with the help more advanced technology. Advanced technology can reduce the manual dependency of the store also. It can increase its sitting capacities inside the store. Its weekend opening and closing time should be similar with the weekdays timing. For further reducing the operating costs the store can go for more cost effective suppliers without compromising with the qualities of raw materials. Conclusion Modern business is ever-changing. This ever-changing nature of the business has made performance objectives significantly important for Lincolns Caffe NERO. Like others players in the market, all these performance objectives are having great significance in the business operation of the High Street based store. The report has suitably depicted evidences of the various performance objectives. All the above performance objectives are highly important for the store but among them quality and dependability are most important. Importances of these two performance objectives are higher because they have more impacts on the whole operation. During the course of this report one thing is clear that in various factors customers’ perceptions are suitably matching with the customers’ expectations. It has helped the organization to manage its business operations in a suitable way. The report has clearly indicated that in most the business operations of Lincolns Caffe NERO customers find significant satisfactions and happiness. Demand fluctuation is a serious matter of concern for all the stores related with the industry. This report has clearly stated that the store has managed demand fluctuation perfectly. The report has given significant focuses towards the potential issues that Lincolns Caffe NERO may face in case of potential high gap between customers’ expectations and perceptions. In the course of this report each and every performance objectives of the store have been analyzed critically. One thing is significantly clear from the above report i.e. in Lincolns Caffe NERO all the performance objectives are taken care of properly. References Caffe NERO. 2014. Premium Italian Coffee. Good foods. Great Service. Available at: http://www.caffenero.co.uk/story/philosophy.aspx. [Accessed on 31st October 2014]. Ellis, M. 2011. The Coffee-House. London: Hachette UK. Grigoroudis, E. and Siskos, Y. 2009. Customer Satisfaction Evaluation: Methods for Measuring and Implementing Service Quality. London: Springer Science & Business Media. Kellow, J., Costain, L. and Beeken, L. 2011. The Calorie, Carb and Fat Bible 2011: The UKs Most Comprehensive Calorie Counter. London: Diet and Fitness Resources. Ma, T. 2014. Professional Marketing and Advertising Essays and Assignments. London: Tony Ma. Nahmias, S. 2009. Production and Operations Analysis. London: McGraw-Hill/Irwin. Tripadvisor. 2014. Caffe Nero. Available at: http://www.tripadvisor.in/Restaurant_Review-g186336-d5321207-Reviews-Caffe_Nero-Lincoln_Lincolnshire_England.html. [Accessed on 31st October 2014]. Zeithaml, V. A. 2010. Delivering Quality Service. New York: Simon and Schuster. Read More