Importance of Strategic Operations Management - Case Study Example

Topic: PRODUCT DESIGN STRATEGY OF KFC Insert Insert Insert TABLE OF CONTENTS Introductionof KFC…………………………………………………………………..3 Importance of strategic operations management…………………………………....4 Product Design Description…………………………………………………………. 4 Characteristics of KFC Product Design..……………………………………………5 Benefits of KFC Product Design to Its Company……………………………………7 Recommendations……………………………………………………………………..8 Conclusion…………………………………………………………………..................9 Appendices……………………………………………………………………………10 I HAVE FOCUSED ON STRATEGY NO 1 OF OPERATIONAL MANAGEMENT STRATEGY THAT IS PRODUCT DESIGN. I CHOOSE KFC FOR THIS. I GIVE THE BRIEF INTRODUCTION OF KFC, WITH IMPORTANCE OF STRATEGIC MANAGEMENT IN ANY BUSINESS. THEN GIVE A DETAILED PRODUCT DESCRIPTION OF PRODUCT STRATEGY OF KFC. I FURTHER ADDED THE ADVANTAGES THE COMPANY GAIN FROM ITS DESIGN PHILOSOPHY AND LAST I GIVE RECOMMENDATIONS TO IMPROVE THE PRODUCT DESIGN OF KFC. AND CONCLUDED FINALLY. INTRODUCTION: Operational management is considered to be the heart of the business as its control all the system and operations of the company. Operation management basically deals in designing and operation of the system, with continuous improvement in the existing system. It is a department which is responsible for monitoring the process in which the company resources are converted into final products. These products can be goods or services. It is simply the core responsibility of the manager’s operations to ensure that the product is produced/ delivered with minimum cost, of high quality and on time. For such a huge operation it is important for the manager to keep in touch with the entire functional department in any organization. Since its incorporation, KFC has been developed tremendously. The organizational structure of KFC has undergone with several changes. In 1986, KFC was takeover by Pepsi Co. Pepsi Co worked drastically to change KFC in quick serve restaurant sector. The style and strategies of Pepsi were entirely different from KFC. Pepsi Co observed that the design strategy of KFC product is very much similar to soft drinks and snack foods. The difference is the division of Product as goods or service. Pepsi Co is also dealing the Pizza Hut, Bell Taco etc. Pepsi Co World wide Restaurants created an image of quality food at reasonable prices in restaurant industry. Presently KFC has operating 4,258 restaurants in 68 countries world wide. KFC is the biggest chicken restaurant in the world. It is also the third biggest chain which serves quick to the customers in the world. International expansion of KFC is critical to increase its profitability and growth due to market saturation in United States. At present the strategy of KFC is to provide fast and friendlier service to customers, with continued high product quality, and cleaner restaurants. The operations team focuses on improving operational efficiencies. Another feature, on which management focus is elimination of overhead costs. This in result brings high yields for the company. To gain such benefits by the company, the management has eliminated 250 management positions and gave such responsibilities to marketing and franchises. IMPORTANCE OF OPERATIONAL MANAGEMENT DECISIONS: The importance of operational management has significantly increased in the service industry. Any service providing company faces many challenges and problems which can be solved by operational management strategies. In most organizations, it comprises a drastic percentage of physical assets and human resource. The Manager operations decided what should be produced/ delivered, how to produced, when to produce. He is also responsible for all the sensitive issues like Planning for capacity, material management, purchases and logistics, scheduling and maintaining the quality. Now in this fast moving and rapidly changing business environment, the operational managers face high pressures. This is because shorter service life cycle, competition is significant, the market is full of conscious consumers. All such pressures lead to high expectation from manager operations. He has to improve productivity while providing high quality services. In this way, he can bring high yields for the company. PRODUCT DESIGN OF KFC Basically KFC is the chain of restaurant which offers goods and services to the consumers. The Goods offer by KFC is a huge variety of chicken based products and fast food items. The service includes the quick and friendlier service to its clients in a restaurants industry. The base of service design of KFC is self service and quick response to the customers. We will focus on the both aspects of KFC product design. The interesting feature of KFC chain is that it only serve chicken based products but are highly successfully world wide. They have introduced a huge variety of chicken products in different forms. But before discussing the product design of KFC let us know about the general product design of any company and its important features. It is basically concerned with improving the service which is providing to the valuable customers. Like for a restaurant, by changing the menu or layout we can change customer’s experience. To use a technique to design the service, there are certain plans which are prepared. The managers have to consider people, material requirements, basic infrastructure and communication means to design a service. The service must be accurately design to gain a competitive edge in the market and appeal more customers. It is very important to develop right design for the personnel employed and for the financial growth of a company. The service design basically involves re-organizing the activities in delivering service to the clients. It could be by receiving mails from the customers or in person, telephone or website. This could be done either by improving the existing service or creating new. The concepts and ideas are basically stored in prototypes. With strong visual element and chance to test it drastically improve the service and adds real value to compete in markets. In order to provide reasonable service to the customers, the manager operations have to focus on cost reduction technique and improving efficiency of the employees. Where the price competition is low in the market, the operation manager should focus on providing premium quality with increased varieties. It is also important to focus on the availability of service. The speed of producing a service and reliability should also be considered in provision of quality service. Moreover, service market wants immediate response. So it is important to provide quality service on time and precisely on quality specifications. DIFFERENT CHARACTERISTICS OF KFC PRODUCT DESIGN: KFC FOOD VARIETY: The first and foremost design characteristic of KFC product is its huge variety of chicken products offered to its valuable customers. The basic variety of food items served by KFC chain is burgers, fried chicken, nuggets, potatoes wedges, crispy fries, and huge variety of desserts including ice-cream. The product is designed with a target to cover all ages of customers and to target consumers which are health conscious and wants variety of good and quality food. Other important characteristics of KFC product design is it offers to its value customers a variety of menu a part of their basic menu according to the taste and preferences of food lovers in different countries. Like in Middle East and Some Asian countries they offer sharwarma which is hot and spicy. This product is specially designed for Asian countries which prefer hot and spicy food in their food choices. In Hispanics and its majors cities fried plantains, flans and tres leches is being served as part from their regular products. Where as in many African countries the major the KFC offers greens, macaroni and cheese, red beans & rice and Peach cobbler apart from their regular products. Another important feature of KFC products is it offers different varieties for different patients and health conscious people. Like recently KFC offers a low calorie, trans fat free for diet conscious or patients of high blood pressure, diabetes and heart diseases. KFC further offers different varieties of all age groups like for babies they are not only offering special meal. But their meal contains all important dietary requirements needed for the growing age of the kids. KFC is continuously expanding its food design and style and caters globally according to different nation’s food choices, class of customers and brings new flavors in the fields of chicken based restaurants. Another important feature is KFC is redesigning its product line with new and interesting features like Honey BBQ Chicken, Popcorn Chicken, and Rotisserie Chicken. Further more KFC launches its regular buffets of lunch and dinners to promote its product line and attract new customers. KFC SERVICE DESIGN: One of the most promising features of KFC Service design is it is customer friendlier and very quick. The product service design is specially focuses to give its customers the spontaneous response as per requirement of service industry. Another important feature of KFC service design is its self service. It helps and facilitates to get a quick response from the staff and gets the fresh and delicious food within 10 minutes of order being served. Another important feature of the Service Design of KFC is it gives home delivery service to its valuable clients. Upto the limit of certain value order, KFC deliver its food products to its customer at any time with in a very short period of time. KFC always has a special connection with its clients specially children and babies. Now KFC offers fun area to its special class of customers with in the premises of the restaurants. Moreover the service design of the KFC is its management has now introduced a franchise concept to increase its profitability and products. Now in most of the countries franchise trend is increasing tremendously. It offers high yields for the company. KFC is experimenting with its product design and now offering its services to non traditional places. They are testing their services at shopping malls, airports, hospitals and high traffic areas. ADVANTAGES OF PRODUCT DESIGN STRATEGIES OF KFC TO THE COMPANY: The product design strategy is the bases of any company to excel in the market. If the products design strategy is well designed, with a vision of deep market analysis and well executed and implemented strategies brings high results for the company. The Product Design of KFC is such a strong and sharp that it initially gains the attention of its customers and did tremendously well in the market. This brings huge potentials for the company and now the KFC is operating its business in more than 120 countries around the world. The Basic theme of KFC product was to give its valuable customers a quality and healthy food, with friendlier service, in an appealing environment with reasonable costs. The main focus is to design a product of chicken items which are healthy as per medical science and it is famous in all countries and class of customers. The product design of KFC has increased the sales of the company tremendously. With rapidly increasing the food menu and varieties, they get successful to get a huge share of restaurant business from the market. Furthermore, it attract new customers, and people in this fast and rapidly changing environment, want something to eat which is delicious, handy, and can be affordable. KFC proves to be the best brand in meeting the consumer’s requirements and catering them in a best possible way. Moreover, now in this health conscious consumer based market. People are more conscious of food they are eating. KFC redesign its product and removed “fried” word from their logo and now giving its consumer a quality and healthy food which again helps the company to gain a competitive advantage. The basic advantages the company gains from such a splendid design strategy are: It reduced the overhead costs which results in high yield for the company. It increased the sales growth of the company drastically during last few years. This is because constantly changing and redesigning its product. Gained globally a huge market share which brings high profitability ratio for the company. Gains a good repute in terms of quality goods and service at economic prices. RECOMMENDATIONS: Though KFC is already doing a great job in terms of business and rapidly growth but here are few recommendations given which helps the company to boost up its sales remarkably and attract more customers. The KFC should now focus more in its product design of regular chicken based items. They should bring sea food varieties and other kind of meat so that people get new flavors under one brand. In this competition world, every day people wants new flavor to taste because it’s a human nature that a person feels less attraction towards the thing he already experienced. KFC as brings taste according to the culture and tradition of the countries, it should focus on introducing international cuisines in their outlet. Which it is already preparing locally. But it can change the preferences and introduce international cuisines. It helps the customers to get the variety of different cuisines under one roof. This helps the company to gain a competitive edge as well. KFC should give focus on giving discounts to its regular customers. It helps them to gain a loyal customer market and which brings ultimate results in terms of growth to the company. KFC a part from their regular food items should introduced a variety of seasonal juices and drinks according to the seasons and tastes of the customers in their respective areas.   CONCLUSION: The effective and efficient operations of all the areas of the business need a clear understanding of overall strategies of operational management. All operations managers’ responsibilities are to achieve high quality service standard, meet the deadlines and respond to the valuable clientele in the shortest period of time as per requirement of service industry. So the best operational management strategies work in best favor of the company. I am of the opinion that KFC has gained tremendous success from its basic designs concepts. Its operational management is constantly working hard to reshape and redesign it strategies which brings better results for the company. KFC design philosophy sets an example for the others competitors to gain advantage of such examples. Its basic design strategy now gives company global popularity and repute which people enjoys no matter where they are. APPENDICES: Vidler, Chris. Operations Management. Edition: illustrated. .Published by Heinenmann, 2001. Hazier, Jay & Render.- Operational management strategy and analysis. Edition: 2 Published by, Allyn and Bacon, 1990 Vonderembse, Mark & White Gregory. Operational Management, Concepts, Methods & Strategies. Published by Wiley, 2004. Clow, Kenneth & Kurtz, David. Services marketing, operational management and Strategy. Edition: 2. Published by: Thomson Custom Solutions, 2003 Hope, Christine & Muhlemann, Alan. Service operational management ,strategy design & delivery. Edition: 2. Published by: Wiley, 2003.   Krajew, Oleary. Operation Management and Strategy. Published by: Princeton Hall, 2001. Krajewski, Lee & Ritzman Larry .Operational Management –Strategy and Analysis. Edition: 5 Published by: Addison Wesley, 1999. Brooke, Michael, International Management a Review of strategies and Operations. Edition: 3. Published by: Nelson Thrones, 1996. Cohen, Marshall & Deutsch John. Capital Management Vs Operational Management. Published by John Deutsch Institute for the Study of Economic Policy, 1987 Muhlemann, Alan & Witt Christine, & Hope Christine. Service Operations Management-Strategy, Design & Delivery. Published by Financial Times Prent.Int, 1995 Journal Articles: JSTOR, “Management science,” Vol,39, PubsOnLine, Publisher: Institute of Management Sciences, ( 1993). 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