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Group C
James Lee
Ibi Ogungbade
Avery Green
Dejie Li
December 11, 2012
EUPHORIA VS. INDULGENCE
Operations Strategies
UK ICE CREAM Market Information Market Penetration in UK >80% Market Segmentation- take-home sector and
wrapped impulse sector Value > £1.22bn in 2010 an increase of
10.4%since 2006 Sales > 95% from supermarket and 22% from
Ice cream Parlours Tubs and blocks > 40% of the Ice cream
market Premium and Luxury > 12.2% growth in 2010 Supper Premium/luxury brand > Ben and Jerry’s
and Haagen Dazs Premium brands >Carte D’ Or (Unilever),
Wall’s(Unilever) Others >Kelly’s of Cornwall (R&R Ice Cream),
Make's (Mackie’s of Scotland), Baskin-Robbins, Farmhouse Fair, Frederick’s Dairies, Premier Foods, and Yoomoo.
Total UK Expenditure on Ice Cream (£m), 2006-2010
UK Take-Home Ice Cream Subsection
Standard Ice Cream: 15.5%
Luxury/Premium: 35.6%
Multipacks: 48.9%
Source: Consumer Trends, Q4 2010, National Statistics website
Order Qualifiers
QUALITY: (Conformance, Consistency, Aesthetics - taste)FLEXIBILITY: (Mix - product range) DEPENDABILITY: (Ability to keep the promise-Availability)
Brand Shares in UK Tubs and Blocks Ice cream Market in 2011
Source: Mintel
Source: Key Note
Companies Overview Ben & Jerry’s Haagen -Dazs
Founded 1978 Burlington Vermont 1961 ,Bronx, New York
Opened in UK
1994 1987
Countries 26 Countries 54 countries
Parent Company
Unilever (in 2000) General Mills ( in 2001)
Products Sold (Product Mix)
Ice cream Tubs(500ml &150ml) ,sorbets, frozen yogurt, stickbars, cones, sundaes, shakes, In shops[hot drinks & blends –espresso, cappuccino, teas)
Ice cream, Tubs(500ml &100ml) , sorbet, frozen yogurt, sundaes , stickbars ,cones smoothies, (waffle and crepe creations) .In shops[hot drinks & blends –espresso, cappuccino, tea s)
Sales Channel
Supermarkets, groceries stores, convenient stores, B&J Branded vending machines, Petrol Stations, restaurants, Cinemas , franchise and Company owned ice-cream shops , Mail order B&J franchise “scoop shops” (244UK),
Supermarkets, convenient stores, food service channels , HD Branded freezers ,HD shops (flagship)(4UK)
Market Position
Luxury /Super premium (Ranges from children to Elderly )
Luxury /super premium (target 20-39 middle income-wealthy)(wide r 5-59)
Franchise shops
B&J franchise “scoop shops” (244UK), 750 shops worldwide
HD shops (flagship)(4UK) over 650 shops worldwide
Both companies have franchise retailing networks in the UK which will be the main focus of this presentation
The focus will be on business to consumer market
Cost Value Added
Speed NPD Speed
Flexibility New Product
Development
Flexibility New Product
Development Modified Product Resource Mix
Quality Perceived Quality Aesthetics (Taste) (appearance-product
& servicescape)
Quality Perceived Quality
Aesthetics(appearance, Taste)
Ben &
Jerry’sHaagen-Dazs
Order Winners
Ben &
Jerry’s
Flexibility
>NPD
Cost>Value Added
Quality>Perceived
Quality>Aesthetics (Taste and
Appearance
Speed>NPD Speed Haage
n Dazs
Quality>Perceived
Quality>Aesthetics
(Taste, Appearance and Servicescape)
Flexibility>NPD
>Modified Product
>Resource Mix
Order Winners
4 V’s 4 V’s Ben & Jerry’s
Overall Haagen –
Dazs Overall Ben & Jerry’s
ShopsHaagen-Dazs
Shops
Volume Market share 18%, 67.98 million liters in 2011.
Market share 11%,39.71 million liters in 2011.
244 shop , majority in Odeon
4 shops in UK
Variety 41 flavours Ice Cream, tubs(500ml &150ml) ,sorbets, frozen yogurt, stick bars
24 flavor Ice Cream, Tubs(500ml &100ml) , sorbet, frozen yogurt, smoothies, stick bars.
16 Flavours (cups & waffle cones)sundaes, shakes, frozen yogurt, hot drinks & blends –espresso, cappuccino, teas )
24 flavours-(Cups &cones)sundaes, sorbet, frozen yogurt, smoothies,( waffe and crepe creations) , brownies, sundaes . Custom creations, hot drinks & blends –espresso, teas )
Variation In supermarkets and stores demand is more stable
In supermarkets and stores demand is more stable
Higher demand in Summer (good weather) and Christmas. Demand driven by Cinemas. Higher demand on weekends (evening)
Higher demand in Summer (good weather) and Christmas. Dependent on good weather. High demand on weekends (Saturday full)
Variability Standard package products (low in supermarkets )
Standard package products. (Low in supermarkets)
Standard products .Create & custom desserts, choosing from selection of flavours and toppings
Standard products .custom desserts, choosing from selection of flavours and toppings ,special creations
Operations Operations Ben & Jerry’s Haagen-Dazs Difference
Process: Service shop Service shop
Infrastructure: Location
Mainly in Cinemas (Odeon) and Malls with Cinemas (244 in UK)Access to customer
In middle to upper class shopping & entertaining districts (4 in UK)NOT in discount stores/ areas High Traffic areas to build it stores
B&J use the Cinemas to attract customers. HD use the volume of people in middle to upper class shopping Entertaining districts .
Site Cell Layout : small neat site compact sometimes shared with other shops (B&J Costa), Mills cookies) . Inside a cinema complex or Mall .
Individual branded site lager site accommodate both take away (Cell layout) and Restaurants (seats – Fixed layout & Kitchen- Process layout)
HD has a large facility to accommodate restaurant (only 4 in UK).B&J has various (244) facilities at cinemas across the UK
Facilities Cell Layout : Mainly Take away, Ice- cream displayed (Dipping Cabinets) and prepared/customized in front office . Back office used for storage (walk-in freezer) Seats available sometimes but shared with other shops
Both sit-in Restaurant and take away. (Cell Layout) Ice- displayed (Dipping Cabinet) and prepared/customized in front office Back office used for storage (walk-in freezer) and creations. Restaurant: Exclusive Comfortable Seating (Fixed layout )( over 80 ) available with service.
HD has a back office with Kitchen facilities for both storage and making their HD creations. HD –Cell, fixed , process layout) B&J –Cell layout. HD has Resource Mix (staff facilities products)
Capacity :Chase Demand
B&J has 41 flavours , but usually sells 16 based on demand. In off peak periods staff usually multitask
More staff usually work in peak times and other staff multitask in off peak times. Ice cream is restocked when there is an increase in demand.
HD has more staff in their Shops
Demand Management
B&J uses Cinemas to target customers (martini and afternoon performances)
HD has limited edition available for six months to attract new customer to the brand .
B&J -HD – Limits on product offering .
Operations cont’dOperations Ben & Jerry’s Haagen –Dazs DifferenceCustomers:Service encounter
Good service, fun friendly .Not specifically B&J share staff with other brands
Extravagant service : host at entrance waiters service , Friendly and enthusiastic (Feedback survey for service experience ). Focus on couple s
HD has extra focus on service experience (feed-back mechanism). HD has their own staff. B&J Shops share staff with other brands .
Queuing system
Unlimited, FCFS (two cash points in Odeon Guildford when busy)(London one cash point)
Unlimited (FCFS) in take away, (3 cash point-same area)but limited for sit-down restaurant Multiple channels – Waiters about 4 cash points
HD in sit in Restaurant has multiple channels (flexible)
Quality:Inspection
Taste and visual inspection every two days, change stock every 2 weeks. Dipping Cabinets(-14-
17°C) Walk in freezer (-21-
22°C) Back office
HD test Dipping Cabinets(-14-
17°C) Walk in freezer (-21-
22°C) Back office
No major difference
Assurance Use SQC pack (Statistical process control software ) to analyze air into ice cream , mix , volume etc – Ensure uniform high quality
QA– standard procedureQC – from material selections HD test all production steps , ingredients , and taste . ISO 9001
HD put more emphasis on raw material control
Continuous improvement
More flavor s- based on customer taste. Flavours combination
Product Quality and Service level , customer experience Feedback from customer (survey)
HD- service and qualityB&J –flavours –differentiation
Business Model
Super premium markets, focus on children and families (wide coverage)
Speedy transaction process Vast shop coverage, most located in
cinemas and malls Easy accessibility Small sized shops usually Cobranded High level of CSR (Fair Trade)
Franchised shops: smaller servicescapes in convenient locations
Dipping cabinets ( -14-17°C) Walk-in freezers (-21-22 °C) Storage Effective Ordering Process (CRM) Produce and distribute natural ice creams
Novelty, innovative and many selections of Ice Creams
About 41 flavors, In shops 16 flavors Ice cream (tubs, cups, cones) sorbets, frozen yogurt, stick bar, sundaes, shakes, frozen yogurt , hot drinks & blends (espresso, teas)
.
Friendly service and quick service
Fun and relaxing customer experience (Quirky, fun & vibrant, delicious)
Network Architectu
re
Technology
Mark
et
Off
erin
g
Business Model
Luxury/super premium markets, focus on middle class and above
Easy accessibility, convenient and shops are luxuriously decorated
Shops are well staffed (Professional) Effective service capacity Customer feedback program to
keep good customer relationship
Shops : Lager servicescape located at up scale shopping centres and entertainment districts
Dipping Cabinets(-14-17°C) Walk in freezer (-21-22°C) storage Effective Ordering Process (CRM) Limited flavours selections Products are crafted by the purest and finest ingredients
Finest & purest Ice creams
24 flavors ice cream (tubs, Cups & cones) sundaes, sorbet, frozen yogurt, smoothies, sundaes (waffle & crepe creations, Custom creations, hot drinks & blends(espresso, teas)
Extravagance service and interaction (comfortable & elegant seating)
Memorable, fine, customer experience (Exclusive , connoisseur, indulgent, engaging)
Network Architectu
re
Technology
Mark
et
Off
erin
g
Strengths: Donates towards social and environmental causes (CSR) A wide sales coverage providing easy access to customers Novelty flavours NPD, (quirky, fun) New flavors are launched frequently (NPD Speed) Good quality (natural ) and more product offerings Aesthetics –attractive packaging Weakness Focus on delivery rather than service and customer buying experience Health concerns (High milk content) High commodity prices–inputs to ice cream are volatile – high production
cost (but cheaper than Haagen-Dazs) – higher retail prices or reduction in operating profit margin
Strengths: Increased NPD (limited editions), Aesthetics packaging to improve brand recognition Customer focus -customer needs drive strategy –market research
>customer value Luxurious shops atmosphere which improves brand image and loyalty-
customer experience High level of quality of products and service as well as a customer
experience Weakness High commodity prices –inputs (purest and natural ingredients) are
volatile – very high material and production costs - higher retail prices or reduction in operating profit margins
High cost of ice cream - Limited price flexibility to adjustment in customer buying behaviour in challenging economic times
Relatively lower sales coverage in the UK compared to Ben & Jerry’s
Strengths & Weakness
OQs OWs OperationsProcess:• Professional Service • Service shop/Job shop• Mass service
Network Architecture:• Super premium and
luxury market • loyalty customers• Easy access Shops• Professional staff
Market Offering:• Finest and purest Ice
Creams• Extravagant service • Memorable, Exclusive
experience
Technology:• Good Infrastructure-
Larger size facility• Dipping Cabinet • Walk-in freezer • CRM• Limited editions
BusinessModels
+ = Operations Strategies}
Quality:• consistency• Conformance• Aesthetics-
(Taste)
Flexibility• mix – (Product
range)
CI and innovation
Conclusions
Flexibility:• output quality• modified product• volume• resource mix• mix• deliverability• new product• material quality
Dependability:• delivery performance• ability to keep promises• safety• price performance• schedule adherence
Dependability:• ability to keep
promises-(Availability )
Quality:• consistency• conformance• serviceability• perceived• value• Aesthetics
(taste& Appearance)
• technical • performance• features
Infrastructure:• location• site• facilities
Supply chain:• tiers and networks• supplier relationships• procurement policies• integration• logistics
Inventory:• nature of demand• production planning• production control
Capacity:• Level capacity• Chase demand• Demand management
Customers:• service encounter• queuing system• failure and recovery• self service
Quality:• inspection• control• assurance• total quality management• continuous improvement
OQs OWs Operations
Network Architecture:• Super premium
customers • Quick transaction process • wide coverage shops
efficient staff• CSR (Fair Trade)
.
Market Offering:• Novelty , innovative and
Many selections -Ice creams
• Quick service• Fun and relaxing
experience
Technology:• Smaller but convenient
facility • Dipping Cabinet • Walk-in freezer • CRM• Natural Ice creams
BusinessModels
+ = Operations Strategies}
ubiquitization
Conclusions
Quality:• consistency• Conformance• Aesthetics-
(Taste)
Flexibility• mix – (Product
range)
Dependability:• ability to keep
promises-(Availability )
Cost:• manufacturing• service• running• selling price• Value added
Quality:• consistency• conformance• serviceability• perceived• value• Aesthetics
(taste& Appearance)
• technical • performance• featuresFlexibility:• output quality• modified
product• volume• resource mix• mix• deliverability• new product• material qualityDependability:• delivery performance• ability to keep promises• safety• price performance• schedule adherenceSpeed:• delivery speed• production speed• NPD speed• delivery frequency• quote generation
Process:• Professional
Service • Service shop/Job
shop• Mass service Infrastructure:• location• site• facilitiesSupply chain:• tiers and networks• supplier
relationships• procurement
policies• integration• logisticsInventoy:• nature of demand• production
planning• production controlCapacity:• Level capacity• Chase demand• Demand
managementCustomers:• service encounter• queuing system• failure and recovery• self service
Quality:• inspection• control• assurance• total quality
management• continuous
improvement
References:
Business model definition available at:http://www.investopedia.com/terms/b/businessmodel.asp#axzz2ESsbHFy3 (accessed at
Nov 20,2012) Ben and Jerry’s information available at:www.benjerry.co.uk ( accessed : Nov.20,2012) Haagen-dazs information available at:http://www.haagen-dazs.co.uk/UK_Home/ ( accessed: Nov.20,2012) Logos of Ben and Jerry’s available at:www.google.co.uk ( accessed: Dec.2 ,2012) Franchise shops information available at: http://www.discoverindulgence.com/en/Global/Find/Europe/United+Kingdom/London/Leicester+Square.aspx
(accessed: Dec 2, 2012) Slack et al.,1995 Operations strategy model available at:http://www.emeraldinsight.com/journals.htm?articleid=850851&show=html ( accessed:
Nov 25,2012)