Contemporary Hospitality Management: KFC Franchisee Chain - Term Paper Example

___________ ____________ ____November 2007 Contemporary Hospitality Management Introduction Any hospitality offering business thrives well under well defined business conditions. These may include a well-established name, brand, and reputation. The hospitality business tends also to provide a strong brand or trademark of the fast food concept-a common adjunct to bundled hospitality offerings now days. Moreover in order to be a success the hospitality business nowadays relies on a proven business system, extensive training and further product development, along with a number of initial and on-going managerial support services. It is also likely that the franchisor brand name, if hospitality joint is operated as a franchisee business would help the hospitality operator secure funding and offer benefits, including discounted supplies. A franchise hospitality business would have the additional advantages in that it would have reduced research and development costs, more access to training, more access to franchisor's marketing and advertising campaigns and guaranteed quality control and standards. However clinching fact is the customer service and its perception by the customers and retention of a customer segment that is a returning customer segment indulging in substantial repeat purchases. This paper examines a few of the important aspects that must be taken into account in order to run a contemporary hospitality business successfully. It takes the case of the famous KFC franchisee chain and examines the difficulties that may be encountered in putting together a smooth franchisee arrangement and running it smoothly. An Hospitality organization0Examination of Major Issues The KFC has had an evolved history. From its very beginning it sought perfection in delivery of its hospitality offerings. This perfection was extended to both "finger lickin' good" food and warm, friendly hospitality. These same standards continue today with our goal of excellence for every eating experience in KFC restaurants. In the beginning of KFC, there was nothing-save a chicken recipe and a promise. "The recipe was, of course, Harland Sanders' special blend of eleven herbs and spices cooked in his own secret way. There was no striped red building, no cardboard bucket with the illustrated icon known as "the Colonel." There was no fiberglass replica of the diminutive and rotund man standing in the corner in a string tie"(Howell, 2000). Sanders' signed up his first franchisee in 1952. KFC changed management several times and was under John Y. Brown and Jack Massey, Heublein and R. J. Reynolds. By the time KFC was acquired by PepsiCo in 1986, it had grown to approximately 6,600 units in 55 countries and territories. Now it is under Tricon.It is important to observe that despite frequent management turnover the KFC continued to have very detailed and effective franchisee agreement which allowed substantial leverages to franchisee units to improve the group working by their innovative methods. This unit would like to attempt the same by taking special initiatives in use of technology and dcor as detailed below. The modern day hospitality business planning has become no non sense and carefully planned for important business variables. In case of potential franchisee the first aspect that is examined is the possible organization plan. This business plan has the objective of opening a full KFC restaurant in the target location. It is first examined if the present outlet would not double the serving to the local population as may be the case when more nearby outlets are present. In case reasonable distance is there then organization plan is given a go ahead. Then the core hospitality offers of the outlet are taken up for firming .The proposed KFC restaurant would offer all the products that KFC is known globally for. These would include fried chicken products and non-fried chicken-on-the-bone products items sold in pieces under the names Original Recipe, Extra Tasty Crispy and Tender Roast. It would also sell Chunky Chicken Pot Pies, Colonel's Crispy Strips, and various chicken sandwiches. KFC restaurant would also offer a variety of complementary items, such as biscuits, mashed potatoes and gravy, Cole slaw and corn, as well as desserts and non-alcoholic beverages. Their dcor being characterized by the image of the Colonel and distinctive packaging includes the "Bucket" of chicken. The quality orientation in hospitality industry should be first of all tackle the issue of understanding the consumers. This alone would help in improving the service quality as delivered and as perceived by the customers.Consumers may search for brand and outlets in combinations (Hawkins et.al, 1983). Most consumers are influenced by various groups in the decision-making buying process. Consumer choices are nested and interlocked across the assorted contexts of daily life (e.g., First and Dholakia 1982; Huffman, Ratneshwar, and Mick 2000).These contexts can be classified as demographic,socio-cultural,motivational,learning and family contexts.One can examine and analyze buying roles in complex buying situations by breaking them into smaller questions like: who first suggests buying the product or service, who uses the product, who advises on the buying decision, who makes the actual purchase and who makes the choice on a component of the buying decision (whether to buy, what, how, where from).Similarly one can study buyer behaviour using two criteria of buyer rationality and buyer involvement in the purchase decision. While rationality can be 'low' or 'high' the involvement can be 'low',' medium' and 'high. This gives out 6 types of behaviour when organized in a matrix form. It would be easy to observe and place buyers in one of these categories. These six types of buying behaviour can be categorized as sensual, image, routine problem solving, impulse, limited problem solving and extensive problem solving. Any service provider can aim to build customer value by identifying elements of customer value and deducting there from elements to customer cost to arrive at customer delivered value. As Michael Hammer puts it, "MVA (More Value-Added) means that you give the customer more, perhaps far more, than you ever have before. It goes beyond simplifying your customers' interactions with you to delivering solutions to your customers' problems, of which your products and services in their native forms are but small pieces... You can visualize the principle of MVA as a ladder with your product at the bottom and the solution to your customer's problems at the top. The more help you provide your customers to fill that gap, the more value you add to them, which, of course, differentiates you from your competitors who are still scrambling around at the bottom of the ladder. Also, it is to your advantage to control as much of the ladder as you can - customers will be less likely to abandon you in favor of someone else, lower down the ladder, who offers less value. At the same time, your opportunity for margin and profit increase"(Hammer, 2001).These aspects can contribute effectively to the overall build up of the marketing strategies like overall Low-Cost Leadership Strategy, broad Differentiation Strategy, focused Low-Cost Strategy, focused Differentiation Strategy and Best-Cost Provider Strategy. The organization structure of the KFC outlet are normally standardized. They can be replicated from the nearest KFC outlet. This is another distinctive aspect of the modern day hospitality business organization. Primary training of the new staff in franchising concepts would also take place at the nearest KFC outlet. Organization structure would be divided into two layers. One comprising of management layer and the other comprising of front office and customer dealing 'crew'. The management layer would have in charges of functional units such as restaurants and fast food floors/counters. These would have overall functional responsibility for smooth running of their units maintaining quality and service standards as per the franchisee contract. These would be designated as deputy managers. Employees will look up to these people to get decisions regarding customer service, team training and development of business and ensuring operational controls. In short these mangers would be responsible for day to day work of the outlet. A support manager would take up the primary task of managing shifts of crew and liaise with the kitchen. This manager should have flexible approach in working and communicating with in different crew teams .He should have excellent interpersonal communication and be very alert to the cause of customer service. There would be Kitchen manager who would have the entire responsibility of ensuring that the kitchen runs so as to ensure best quality KFC food is produced with least wait time for customer. This manager needs to be conversant with all product specifications of KFC and ensure adherence to them. There would be a stores and facilities manager who would ensure that all the supplies are sourced from best places at competitive rates and inventory management is such so as to reduce waste to minimum. This manager would also be in charge of interiors, ambience and dcor of the outlet; though this role can be assigned to a separate marketing manager. There would be a finance manager who would manage daily finances of the outlet and run up the financial statements of the franchisee at year end. Maintenance of all books of accounts within a proper system of accounting will be his responsibility. In addition he would manage all the banking interfaces of the outlet including working capital and/or term finances. A general manager would be overall in charge of the entire franchise operations. He would have additional responsibility of advertising and area development. He should be able to leverage parent promotion support with his own local efforts. All deputy mangers/managers would have direct reporting relationship with the overall in charge. It is important to realize that in KFC kind of hospitality business most of the staff would have direct interface with the customers and the training, skilling, reskilling, motivation, empowerment and leaderships needs of this category of staff becomes primary and all important. Major portion of the staff would comprise of customer attending "crew" staff.Approrpriate crew must be hired because customer service directly depends on how crew delivers. Such staff should have a modern day approach to customer servicing. As Hedden says, " Twentysomethings, Generation Xers, post-boomers - no matter what label you apply, these workers will be the primary labor supply for the next 10 years, so you better learn how to manage the. Generation-X employees make up approximately 56 percent of the foodservice work force, according to the National Restaurant Association's Foodservice Employee Profile-1994, which means most restaurateurs probably employ twentysomethings in their operations. The good news: These young people may be some of the hardest working, most loyal, most techno literate employees you have ever hired - if you learn how to bring out the best in them"(Hedden,1996). "A year ago, Claire Raines, an organizational consultant in Denver and co-author of TWENTYSOMETHING: Managing and Motivating Today's New Work Force, conducted focus groups with twentysomething employees in five cities across the United States and discovered what they wanted from their managers. Astonished by the consistency of their responses, she coined the term "X Requisites" to describe what Generation Xers desire from the workplace. She has given a 7 point managerial help charter in the above book dealing specifically with this category of "crew" staff. This comprises of appreciation ( Reward-and-recognition programs are great, but if they aren't supported by management's sincere attitude of appreciation, they are meaningless),flexibility(effective managers administer policies and schedules with regard for how they affect each individual),creation of a team(many twentysomething employees did not grow up in close-knit families, so they seek to find family on the job - a group of people who support and encourage each other),developing them(baby-busters see themselves as marketable commodities. Effective managers make sure that they are gaining new knowledge and skills, which will make them more marketable),involving them(people tend to do a better job when they feel they have ownership, and when they feel their opinions and ideas are valued), lighten up(these employees want to have a good time. Fun on the job is a priority for them) and walking your talk (Generation-X employees are keen observers, and they watch to see if managers practice what they preach)" (Hedden, 1996). Contemporary hospitality management also lists out that it is crucial to have a free working atmosphere that is imbued with cooperation, confidence, trust and more in the realms of teamwork than in the nature of disparate individuals mechanically going about their individual business tasks. It is important to manage the various disputes that crop up in the course of running a restaurant. "Conflict is going to happen whenever people care about what they're doing....The more passionate people are and the more they care, the greater the potential for conflict...No, conflict itself isn't good or bad - it's just inevitable. Because it's so common in the workplace, however, it does have to be managed. Three principles can help you manage conflict: prevent employees' conflicts from coloring customers' perceptions of your restaurant. Make conflicts work to your advantage by resolving them in ways that improve the long-term strategies of the restaurant. Set policies that minimize the nagging, negative conflicts that plague poorly run businesses"(Moomaw, 1996). An additional important tool for resolution of conflict at all levels and for role clarity is the practice of writing job descriptions for all employees. A preset job description results in saving a lot of time in the long run. Every job description should contain the following items: Job title, Title of immediate supervisor, Position summary (provide a general description of the job, its responsibilities and the required skills. Tasks and competencies. (outline the job's tasks and competencies/skills needed to accomplish the tasks. Be sure to include a line that says, "Other duties as assigned." This gives the flexibility to adjust an employee's duties as needed and provides the worker with the opportunity to grow in the position) and prerequisites (list the required education, experience and physical abilities needed to perform the job)"(Defining, 2000). Thus it can be concluded that only careful planning of the business potential, organizational structure and interpersonal relations can ensure that the customer interface is served in a manner so as to lead to full customer satisfaction. This is the common refrain across the literature that is advocating such approaches in contemporary hospitality management. Works Cited Howell,Webb." Power to the People." The QSR interview.QSR.September 2000. Hawkins, Del I., R. J. Best, and K. A. Coney .Consumer Behavior: Implications for Marketing Strategy. Plano. Texas: Business Publications Inc. 1983. First, A. Fuat and Dholakia,Nikhilesh. Consumption Choices at the Macro Level. Journal of Macro marketing.Fall.6-15. 1982. Huffman, Cynthia, S. Ratneshwar, and David Glen Mick .Consumer Goal Structures and Goal Determination Processes: An Integrative Framework. in The Why of Consumption: Contemporary Perspectives on Consumer Motives, Goals, and Desires, eds. S. Ratneshwar, David Glen Mick, and Cynthia Huffman, London: Routledge, 9-35. 2000. Hammer, Michael. Agenda, Retrieved November 22 12, 2007 from http://www.1000ventures.com/business_guide/differentiation_strategy.html. 2001. Hedden, Jenny.(1996). " Twentysomethings: Managing the New Breed of Employee ". Restaurants USA. September 1996. Moomaw,Paul.(1996)." Managing Employee Conflict: Be a Coach, Not a Cop". Restaurants USA. June/July1996. "Defining an Employee's Duties". (2000). Bread & Butter, May 2000 Read More