Service Operating Strategy in Italian Restaurant Outlets - Case Study Example

?Running head: SERVICE OPERATING STRATEGY Service Operating Strategy Scenario- based Individual Project      SM2037 U1036408 Seminar Group 8 01 March2012 Service Operating Strategy Introduction A business organization strives to ensure that tasks are completed in order to achieve predetermined goals. A strategy can be defined as a direction the organization adopts, whose aim is to achieve a long-term competitive advantage in the business environment. According to Anon (2007, p.21), a business’s main concern is its sustainability in the competing market in the future; therefore, the need for quality actions is always vital for the future success of a business. Needless to say, a business’s operations are important, as they comprise daily activities; these activities contribute to the success or failure of a business organization. Therefore, a business’s operations and strategy determine its ability to achieve success and survival in a competitive market (Anon, 2007, p.21). Boyer, Hallowell & Roth (2002, p.176) emphasize that, in a business, customer loyalty and retention can improve profitability for the business; as a result, an effective operating strategy is vital in a business. Needless to say, a service operation strategy should be well managed for it to succeed in improving customers’ satisfaction, and as a result, achieving competitive advantage. In addition, a service operating strategy must align with the targeted market requirements (Boyer, Hallowell & Roth, 2002, p.176). This research involves a case study of a reputable Italian restaurant, whose decision to launch new outlets yields to a concern on poor customer experience in the new outlets, which may tarnish the restaurant’s image. As a result, the creation of a service operating strategy for the new outlets is required, which is the main aim of this paper. Italian Restaurant Outlets; Service Operating Strategy This Italian restaurant (Bel Cibo’) has a 25 full service outlets; its decision to look for expansion opportunities has led management to consider new mini-outlets with limited menus and low cost. However, the main concern lies in the poor customer service experience that may occur, and as a result, tarnishing the restaurant’s successful brand. Therefore, the need for a service operating strategy has emerged; when service level and costs are well balanced, they can lead to sustainable competitive advantage. Hawkes, Bailey & Reid (2011) add that, it is important to match service requirements with the needs of customers; for instance, some customers may prefer self-service, for example when using the banks ATMs or in a grocery shop when selecting their preferred greens. However, in a restaurant, a customer expects to be served, “matching the customer’s expectation with the service delivery method will increase the customer’s satisfaction and the revenue as well” (Hawkes, Bailey & Reid, 2011). In addition, there is need for continuous monitoring of the service processes, which foster service improvement. For instance, in the Bel Cibo’ restaurant outlets, management can ensure that the monitory role is delegated to a qualified personnel, capable of identifying errors and suggesting improvement strategies. Employees of Bel Cibo are the main determinants of the quality of customer services, and as a result, leading to high or low productivity. It is therefore necessary for management to consider the employee’s labor hours and avoid employee burnout, which will result to poor customer services. At the same time, full-time and part-time workers are necessary as well as the shifts strategy, which allows workers to break after some hours of working. Moreover, it is essential to ensure that employees are well motivated; this can be in form of training, promotion, reward and ensuring good working conditions among other activities. Hawkes, Bailey & Reid (2011) emphasize on the use of rewards in improving quality customer service. When employee motivation is achieved, employees will be in a position to improve the business’s productivity. This company can adopt a reward system, which may be either formal or informal, which defines an employee’s performance. Moreover, “the rewards are associated by high levels of performance, whereby an employee is motivated to work harder,” (Griffin, 2011 p309). In addition, employee training and development can be used to motivate employees, whereby they gain skills, which are necessary for success, as a result, developing positive attitudes, (Fink & Fink, 1996 p167). Therefore, the human resources department should be available in this restaurant, which will aid in ensuring that employees’ welfare is met. While implementing a service operating strategy, it is important to determine the service capabilities of a business, as a well as developing a strategy that addresses the needs of customers. Services can be influenced by a number of factors including, reliability, surprise, fairness, and recovery; these factors determine the quality of a service (Berry, 1995, p.65). Services should be reliable, such that, it is dependable and accurate, and as a result, fulfilling its promise to a customer (Yang, 2007, p.36). Indeed, businesses that continuously nurture their values of dependability are in a position to avoid errors. Service surprise is another factor, which involves surprising customers via incredible services. Service recovery involves regaining the customer’s trust, whilst service fairness involves business being conducted ethically between an organization and customers. In a restaurant, customer satisfaction is very important; not only are customers keen on the customer service offered, but also on the type of cuisine and its quality. According to Lombard (2009, p.73), the main aim of any business is to ensure that customers continuously buy their products or services and achieve satisfaction as well. If a service matches or exceeds a customer’s expectation, customer satisfaction is achieved. According to Lin, Vassar & Jones (1999, p.2), the restaurant industry is among the competitive businesses. With such businesses operating on a daily basis, there is no room for mistakes. Bel Cibo’ Italian restaurant is among the successful businesses, and as a result, it seeks to expand by launching outlets. Nevertheless, the management must ensure that this move will foster the already existing success. The service operating strategy is vital for any business. According to McGraw Hill (N.d, p.33), customers require services that symbolize the value for their money. Therefore, when the benefits of a service exceed the cost, the higher will be the value of that service. As a result, the perceived customer value will be equal to total benefits less total costs. Needless say, for Bel Cibo’ restaurant outlets to be successful, quality service operations should be evident. Curtis (2009) adds that, the key to good customer service is hiring of candidates who enjoy interacting with the public. As a result, good customer service will be evident because the employees have effective listening skills such that, the customer does not have to repeat his request. In addition, this Italian restaurant management should provide training for its employees. Training will enable employees achieve quality customer service abilities, which will result to increased revenues because of customer retention. Friendly and approachable employees attract customers. According to CCH (2004, p.774), achieving good customer service from the employees requires training them. Improving on listening skills, being responsible, responsive, knowledgeable, timely and accurate are some of the traits necessary in customer service. Poor customer service spreads like bush fire, and as a result, customer loyalty is lost. Needless to say, for a service operating strategy to be successful, it must encompass quality, such that, it is reliable and dependable. Flexibility is necessary for this strategy; customer tastes and preferences change, and as a result, “this strategy should be capable of adjusting and meeting the customers’ changing needs,” (Potter, 2001, p.18). In addition, a successful strategy incorporates speed in its operations; how long a customer waits especially in a restaurant is a big deal. This strategy should be in a position of addressing customer service in term of speed; when customers receive their services on time, they are delighted. However, if the customers are forced to wait for a long term before they are served, they will prefer another competing restaurant (Potter, 2001, p.19). When the delivery speed is high, the customers highly depend on the business. In addition, Bel Cibo Italian restaurant is already cost friendly; however, the cost charged has to match with the services provided. Advantages of a successful service operating strategy Attracting customers in Bel Cibo is the main goal of this restaurant business. Therefore, attracting and retaining customers is very important. When customers receive good customer service, the probability of gaining customer retention and customer loyalty is very high. Curtis (2009) emphasizes that all businesses are customer driven. In addition, customer care in today’s competitive business environment is very important, mainly because of the stiff competition that exists among businesses. Customers desire to cling to a business if they are provided with the best customer care services; however, they will avoid a business associated with poor customer services. In a restaurant, the waiter, cashiers, and other staff members represent the restaurant as a whole, and therefore, incase they render poor customer services at one outlet, the whole restaurant’s image is tarnished. The ability to provide exceptional customer service leaves a business at a competitive advantage. Customers will always return for more services once they achieve satisfaction. However, customers can relocate because of poor customer service. If this was to happen in one of Bel Cibo restaurant’s outlet, the whole business chain will be affected, and decrease in revenues would be evident. When one small error is left unchecked, it can lead to a disaster. Therefore, a good strategy will ensure that the Italian restaurant’s management identifies any customer service problem, hence dealing with it beforehand. Bel Cibo’ Italian restaurant is not only concerned with its survival, but also on how to stay in business for a long time. Therefore, developing a service operating strategy is advantageous in this case for the business to be in a position to attain a competitive advantage. According to Potter (2001, p.15), competitive advantage is evident with increase of profits; in this case, the restaurant’s outlets are expected to operate on low cost, which is an added advantage. Differentiating its customer services with those of competitors by ensuring that its customers receive good customer service leaves the restaurant at a competitive advantage. The quality advantage of customer service that responds to customers’ needs is a competitive strategy for the restaurant. Finally, the restaurant has to spend in order to achieve results. Training of its employees requires expenses; however, once the employees are adequately trained, their knowledge on customer service increases. As a result, they are in a position to serve the customers better, which leads to increased productivity and customer satisfaction. Recommendation Bel Cibo Italian restaurant is very successful, evident in its 26-full service restaurants located in high streets. In addition, it seeks to expand by launching several outlets along busy regions at reasonable prices. However, poor customer service could lead to a tarnished image. Therefore, implementing a successful service operating strategy is the main goal. It is rather evident that the main aim of businesses is to ensure survival and generate profits by attracting and retaining customers. According to Forgang (2004, p.20), providing timelier and quicker responses is vital in any business. Bel Cibo restaurant outlets’ aim is to provide quality food at affordable prices. Nevertheless, they need to upgrade their customer service. The first step in creating a successful service operating strategy is to communicate the restaurant’s customer service vision to the employees. Employees should understand their role in assisting to achieve this vision. As a result, training in this stage is necessary in order for the employees to be well prepared in handling customer issues. Secondly, the organization needs to assess the needs of customers; this can be done through customer surveys and customer feedback. Hiring the right kind of employees plays a huge role in customer satisfaction, and such employees are in a position to provide quality customer service. Employees need to be motivated for them to be productive. Hertzberg’s motivation-hygiene theory argues that, hygiene needs are satisfied by good working conditions, job security, and good pay (Lauby, 2005, p.1). “The existence of hygiene needs does not yield satisfaction, however their absence, results in dissatisfaction,” (Koontz and Weihrich, 2006 p292). This theory emphasizes that if the hygiene needs are not met, workers will be dissatisfied. Needless to say, this restaurant needs to prioritize the needs of their workers as well as those of its customers in order to achieve a balance in productivity. In addition, achieving differentiation strategy as well as the cost strategy will be an added advantage for this business. Currently, the business has planned to offer low cost services to customers, and as a result, customers may prefer this restaurant compared to the rest. Differentiation strategy can only be achieved through unique services or products. The restaurant may choose to surprise its customers via unique & friendly services. Needless to say, continuous training for employees is necessary. Moreover, training will enable employees achieve excellent skills on how to handle customers. Conclusion Generating of profits and achieving customer satisfaction is the main aim of any business. Customers will only return for more services or products if they are satisfied with the previous experience. Therefore, determining the customers’ needs enables a business to meet or exceed the customers’ expectations. Having a unique service strategy that is not prone to vulnerability puts the business at a competitive advantage. In this case, Mel Cibo restaurant is concerned about poor customer experience that could cost the overall business dearly. An effective service operating strategy has the four elements - service reliability, service surprise, service recovery, and service fairness. When a service has the above characteristics, it is easier to attract and retain customers. Needless to say, employees contribute to the productivity of the business; therefore, it is important to motivate these employees through promotions, quality pay, and good working conditions. Continuous training is also a necessity; an employer should be willing to spend in order to gain more. When employees are well trained, they are in a position of understanding and serving customers better, hence achieving customer satisfaction. Reference List Anon. 2007. Operations, strategy and operations strategy. (Online). Available at: http://cws.cengage.co.uk/barnes/students/sample_ch/ch2.pdf (accessed 14 February 2012). Berry, L., 1995. 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