Service Operations in Blackshop Restaurant - Case Study Example

Blackshop Restaurant Name Institution Date Introduction Services are always at the core of any economic activity worldwide. The service jobs represent about 80% of the total employment in several countries, hence bringing about service economy in them. Coupled with desire to exist and motives for competitive advantages over other companies, various companies consider effective service operations an integral part of their competition strategy, as already experienced in Blackshop restaurant. As such, effective and resourceful customer service is always considered to be beneficial in client acquisition, customer retention and also cost management. The service operations tailored to meet the expectations of the main customer segments while also balancing quality as well as cost objectives, are quite crucial to the success of a company. In restaurants, the service concept includes the service perception as well as its expectations in the thoughts of lenders, shareholders, employers, and customers. Service operations involve service systems, which are basically the procedures, layout, and equipment applied in the provision of service and maintenance of quality as well as delivery standards. In line with this, the essay seeks to discuss service operations in restaurants, mainly Blackshop restaurant, while also bringing out the positive and the negative sides. This will further give a direction on the best way forward for a more successful Blackshop restaurant. Service Operations in a Restaurant There is no doubt that restaurant industry is among the major competitive industries worldwide currently. At the moment therefore, restaurants use colossal amounts of money in order to open up for business. Great inputs in addition to much working time invested here renders this industry much prone to failures incase its service operations are not only effective, but efficient (Hill, 2000). The service operations in restaurants have their classification in relation to the service degree experienced by the clients as well as the quality of their products, no only food, but also service. This is the main reason as to why reputation in the service industry, especially in the restaurants, is crucial. Service degree may have a wide range right from walk-up counter to that large and complex sit-down restaurant having a maitre d’ as well as wine steward. Food quality as well service quality comprises freshness, ingredient quality, presentation, service manner as well as the relative item cost in relation to other items in the menu ( Feffer, 2003). However, it is quite crucial to note that services are always time perishable, indicating that, in the case of restaurants, unoccupied seat will not be available anymore. This gives an insight as to why a majority of service industries, including restaurants, rely largely on the client location, hence utilizing the decentralized facilities close to the clients. Service classifications may be through labour skills as well as capital intensity; hence services can be grouped to equipment-based or people-based. People-based comprise utility of the skilled (accounting and computer services) and unskilled (cleaners) labour. The equipment-based involve major use of machines, including automated machines. Restaurants therefore can be categorized accordingly, though most of the restaurants are people-based (Lewis, 2003). Service Operations for Blackshop Restaurant Blackshop is a restaurant mainly dealing with products ranging from wine, items made in house to traditional cooking. It is located in hespeler road, in a premise considered as real Cambridge eyesore due to the previous occupants (Irish and gentleman pub). It won an award of excellence from wine spectator magazine. It also employs 120 workers. It has two main competitors, charcoal steak house and keg. Its motto is “casual dining with European flair” it uses manual reservation currently, and therefore concerning open table, the following recommendation is crucial. Open table. Open table is an example of online reservation companies and as such Cerny should be in a position to critically evaluate the requirements, benefits and the demerits of online reservations in relation to the current and expected position of blackshop restaurant before embarking on adopting online reservation method. Open table, which caters for independent restaurants, various restaurant groups, restaurants, as well s hotels, serves 8000 clients in its expansive network. The company offers online reservations to its clients in addition providing software services, bonus services and advertising services to its clients. The company also has an efficient way of getting the desired tables in terms of price restaurant location and food within the specified time. It as well connects the restaurant with the other table systems that are computerized. Through OTconcierge.com, the restaurant can also tap into the other active concierges. All these, however, come at a price. The cost a restaurant incurs during for installation is $1500. There is also monthly charge of $350. Due to the fact that the company claims to increase revenue while decreasing cost, it’s crucial to consider the challenges faced by blackshop, as well as pros and cons of Open table. Operational challenges in blackshop in relation to manual reservation The current manual reservation strategy is still successful and applicable in the restaurant, except for issues like: Filling seats and profitability: due to the fact that restaurants do have a cost structure that is fixed and high, their profitability relies on maximum seat occupancy. Table inventory is greatly perishable, with empty seats creating a major revenue loss. Blackshop can not accurately plan for maximum seat occupancy, timely food service, and excellent customer service (Anderson, 2009). Lost prospective businesses: the restaurant losses business opportunities due to inefficiencies caused by phone reservations. This is because just like other restaurants, it is open only six days of every week; hence this may not suite the convenience of clients calling at the closed day. Also, there are costly no-shows when reservation cancellations are not done because of inconveniences in calls. Guest information is difficult to manage and preserve. This is quite crucial since, by offering exceptional service, the restaurant gains competitive advantage. This may be achieved through recognizing the clients’ repeat dinners, while also recalling the preferences and special occasions of the clients. Losing an employee having such advantages is therefore quite detrimental to the restaurant. There is need for information to be easily stored and transferred (Kimes, 2009). Immeasurable marketing results: is experienced because, in as much as the restaurant uses various advertisements, tracking clients who have come as a result of the advertisement is difficult, therefore their is difficulty in measuring effectiveness of the advertising method. Open table implications Benefits Occupancy of seats which may have remained unoccupied Creation of operational efficiencies through automating the reservations as well as table management (Florini, 2003). Improvement in guest recognition as well as the general guest service Marketing the restaurant to the audience targeted and receiving measurable results Controls reservation process, eradicating costly errors while increasing profitability Offers security by limiting feature access on a per restaurant and per user basis. The diners may also find available tables and book instantly (Bartlett, 2007). Demerits The main disadvantage is the costs incurred, which may be high for businesses that have not yet stabilized, or the starting businesses. For instance, the cost of installing open table is $1500 and a monthly charge of $350. This could constrict the available financial resources of any given business at the verge of development. There are limited resources of Information technology necessary for installation and support of the computer-based systems. Not many restaurants posses the technical know-how, time or the resources needed for installation of computer systems, internet connectivity or troubleshooting of occurring problems through computer systems. Further still, rapid business operations imply that the restaurant will not tolerate interruptions of its service due to a networking failure or equipment failure (Ghoshal, 2005). Solution The restaurant clients often welcome the convenience of ability to conduct online reservations in restaurants, but, as well, they appreciate a lot the personalized service (touch) offered through telephone reservations. A study conducted on 696 restaurant clients indicated that almost 33% had online reservations. The majority in this group were mainly younger clients as compared to the ones who didn’t make online reservation. The study further noted the tendency of majority of clients with online reservations frequently attended the restaurants. The online reservations were viewed by the clients using them as necessary, more convenient and more significant than the telephone reservations. Others even had the notion that internet gave them much information concerning a restaurant than they have, and could learn from using phone calls (Schmenner, 2008). These online users, as well, claimed the realization of much individual connection with restaurants through making telephone reservations. This tradeoff existing between the efficiency and the service perceptions indicates the necessity of providing reservations through both methods. Emphasizing on the convenience offered by online reservations can encourage clients to employ the use of the website, hence providing restaurant much information concerning their clients. Therefore, whether the reservation service is done through a third party or a restaurant builds its individual website, a great way of ensuring and experiencing a successful process of reservation is ensuring that the given electronic process is as straightforward as can be. Therefore, for blackshop to maximize benefits related to its operation, Cerny needs to accept Open table and be among the restaurants with a competitive edge. This is also quite crucial considering the trends in various businesses operating globally and who have resorted to online services for better position in the industry (Steve, 2006). Service Operations Strategy After collective consideration of the products as well as services customers demand, strong points and weak points in competitors, the operating environment, and the strengths, resources, cultures, and weaknesses of the restaurant, the skillful restaurants may formulate its given vision as per its mission statement (Neilslen-Englyst, 2003). The statement communicates the values and the aspirations of the restaurant; basically the reason for existence. With the basis on the mission statement, the restaurant will devise its proper business strategy. The business strategy mainly is a long-term based plan for achieving the mission indicated in the statement of mission. Every business function then obtains its individual strategy supporting the restaurant’s general business strategy, including financial strategy, operations strategy and marketing strategy). Likewise to manufacturing, the service operations need a clear strategic approach. Gupta (2003) describes the process of strategic planning as that hierarchy comprising strategic positioning, the service strategy, and the tactical execution. Therefore, blackshop needs to consider the given steps in order to execute its operation strategy successfully. Strategic Positioning Strategic positioning entails the definition of the restaurant’s target market, in blackshop the target is upper income individuals aged 35-65 years. This signifies the target group the firm expects to have on board and serve. The second step involves the restaurant identifying its key competence, an area not easily attained by other competitors and which will also distinguish the company from other competitors. According to Levitt (2002), this may include focus, cost leadership, or differentiation. At this actual moment, the restaurant has to make clear and concrete decisions in relation to its high-level aims, objectives and mission. The restaurant has a motto of “casual dining with European flair” Service Strategy At the level of service strategy, the restaurant has to define the service concept, the operating system as well as the system of service delivery. Service strategy is valuable in linking the strategic position of the restaurant with the tactical execution. The restaurant initially begins by identifying its competitive priority. This continuously extends to identifying its order qualifiers altogether with order winners. The competitive priorities can be deemed as the restaurant’s characteristics that make it better than others, or its activities done better compared to other restaurants. An instance here could be low cost, better quality, excellent service, or flexibility. The competitive priorities of the restaurant have to be order qualifiers as well as order winners. Order qualifier can be considered as that characteristic the service is required to have so as to be able to compete effectively in a given market. On the other hand order winner indicates that quality that will enable a client to buy or buy into the service of the restaurant over other competitors. As such, the service concept indicates several competitive priorities valued by the given target market. Operating strategy gives the description of the way the different functions in the restaurant, including finance, marketing and operations, will enhance service concept. Incase the competitive priority in order winning is quality, then what are the necessary operations’ undertakings fundamental in ensuring and improving service quality, and in what ways will this characteristic be promoted by marketing? The system of service delivery will determine the system components valuable in the execution of the given service concept. Instances of the required variables entail capacity requirements, systems of quality management, and policies of management. All these should individually support the competitive priorities of the restaurant in order for the particular firm to be clearly differentiated from other competitors like keg restaurant (the strongest) and charcoal steakhouse (Punnett, 2004). Tactical Execution At the end, the restaurant will reach the issues regarding tactical execution. Tactical execution comprises the daily activities needed for the function as well as the support of the service strategy. This, according to Wheelwright (2005), includes management of capacity, location of the facility, management of the inventory, facility layout, selection of suppliers, scheduling of operations, staffing, as well as productivity improvement. Decision reached at in regards to the above process of strategic planning is greatly affected by the way they are located in the model of service maturity developed through Marc McCluskey. McCluskey (2004) also indicates that a majority of firms are mainly in the first stage and gearing to move to the second stage. The model splits the maturity of service into four phases: Stage 1: involves baseline service, with the focus primarily on timely response to requests. Stage 2: involves operational efficiency, with the focus being on reduction of costs Stage 3: involves excellence in customer support. Its focus is mainly on efficiency Stage 4: its focus is concerned with changing of the service concept as well as increasing market opportunity Conclusion Operation strategies are at the core of every business and play a pivotal role in their daily activity, just as in the case of blackshop restaurant. This restaurant, however, in its efforts to improve service quality and increase its market share, has to adopt necessary measures and be very vigilant on the way it reaches at its decisions. A better way is to adequately plan for the necessary activities before implementing them according to the mission of the restaurant. Reference Garvin, D. (2007). "Competing on the Eight Dimensions of Quality." Harvard Business Review, November-December, 101–109. Kimes, S. (2009). “How Restaurant Customers View Online Reservations”. Cornell Hospitality Research Briefs, Vol 9 No 5. Hill, T. (2000). Manufacturing Strategy: Text and Cases 3rd ed. Irwin: Homewood, IL. Anderson, C. (2009). “Search, OTAs, and Online Booking: An Expanded Analysis of the Billboard Effect”. Cornell Hospitality Research Briefs Vol 11 No 8. Levitt, T. (2002). "Production-Line Approach to Service." Harvard Business Review, vol 9. 41– 52. McCluskey, M. (2004). "How Mature is Your Service Operation?" Supply Chain Management Review 8, no. 5: 17–20. Steve, W. (2006). Successful Service Operations Management. Thomson South-Western, Mason, OH. Lewis, M. 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