st0023 sumission

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STRM023 – Assignment 1

1 Introduction

The phrase “Total quality management” (TQM) has been more

widely-used in the business world today when the competition has

been fiercer than ever and especially when the quality is positioned as

one of the leading factors to create comparative advantages of an

organization. Recognizing its importance in the operation, many

organizations have been deeply researching and putting more efforts

to apply TQM in reality with a view of increasing efficiency and

effectiveness. Then what is TQM and what is its power to enable

organizations to enhance their performance? This paper, with its

range, would have a look at some fundamental concepts of TQM and

explain how it acts in reality by illustrating the case of Megastar

Cinplex – a cinema chain in Vietnam.

2 Overview of the company

Megastar Cineplex is a chain of cinema by Megastar Media limited

corporation (MSM) – a $8 million joint venture between Phuong Nam

Corporation (PNC) and Envoy Media Partners (Envoy) of British Virgin

Islands. Though newly established in 2005, MSM with its world-class

chain present in 6 biggest cities along Vietnam has become the market

leader in the cinema sector by providing customers with the latest

movies by the biggest entertainments in the world, bringing themunique experiences in a warm, friendly and modern space. Currently,

Megastar occupies up to 30% of market share all over the country and

the total box office revenues accounts for $15 million in 2009 and

reaches at the number of $25 million in 2010 (lookatvietnam.com,

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2010)The success that MSM has achieved for only a short time of

operation can be traced back to high quality services they provide to

their customers.

2.1 Megastar’s key products and services

Although getting involved in other activities like on-screen

advertising, marketing activations for Vietnam's leading brand and film

distributions, MSN mainly focuses on running the supply chain of

cinema with brand name Megastar Cineplex (MSC) across Vietnam. It

offers a wide range of movies from domestic to imported ones, from

classic 2D to updated 3D movies for customers to choose. The theatersare smartly and modernly designed with great sound and screens.

Even the seats are designed at customers’ convenience with single,

couple and family choice to enjoy the movies. Depending on the

position, each Cineplex is at different size and capacity. On average, it

offers 8 theaters with the capacity up to 1400 seats which can meet

the demand of customers at the peak time of weekends in the big

cities. Other than that, food and beverage with a variety of choices are

made available outside. Fabulous Café area and waiting space are also

specially designed to give added value to customers.

2.2 Megastar’s targeted customers

The targeted customers of Megastar are the middle and high-

class who are ready to pay much higher for great quality. Due to its

big investment in theaters, importing the latest film from overseas…

ect….the ticket price of Megastar even when classified into different

types is set double higher than the other cinemas in the country. The

tickets are changing upon the position and even the peak time.

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However, the goal of benefit can be achieved as Megastar has strategy

to attack the big cities where the customers’ incomes are quite high

and with metro lifestyle for entertainment, they can easily pull the

money out for better quality.

2.3 Megastar’s Order qualifiers and winners

Megastar was established not long ago but it has both order-

qualifiers and order-winners. In terms of order-qualifiers, it offers a

variety of movies to satisfy customers’ need. When order- winners are

calculated, it is even one step ahead in comparison with other

competitors. The first thing that draws customers to Megastar is thefirm always updates the latest films that the world longs to see and on

screen at the same time as announced or even earlier. Avatar for

example was on the theater even 12 hours before America, which

never happens before in Vietnam. Other than that, Megastar was the

first to launch Digital 3D in 2009 and continues to be the leader with 5

Dolby Digital 3D screens across the country. It is Megastar where

customers can enjoy the newest cinema technology. Another reason is

its high-class theaters located in the most crowded shopping centers at

the heart of the big cities. This can be considered as the huge

competitive advantages in terms of geology.

2.4 Megastar’s main running processes

Running a huge firm like MSM requires many steps to be taken,

from importing films, editing them (if in other languages other than

Vietnamese), then doing other PR activities to attract

customers….Within its frame, firstly this paper will describe the main

operational process at the cinema spot as shown in figure 1 below:

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Figure 1: The main processess in Megastar Cineplex

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The process starts when customers enter the cinema and line up

to buy or to get tickets booked and also ends when the movies come

to an end. It includes selling tickets, selling food and beverage,

checking the tickets, guiding customers into the theater, guaranteeingthe security during the movie time. Those stages sound simple but

they will affect directly the customers’ impression on the cinema and

their decision to come again. Thus, those steps are supported by other

ones in the cinema which will be shown in figure 2 below.

Figure 2: Supporting process for Megastar main process

• Management in Capacity and scheduling

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The capacity management aims at coping with the change in an

effective way in cost (Namkung, 2008). This means the arrangement to

make sure that everything goes smooth at any time. It guarantees

that the film resources are stable; the staffs are well distributed intoships: the food and drinks are made available. It is utmost important

especially on the peak time of weekends. Capacity must be adjusted to

serve the customers and the whole process running properly.

• Management in Training

Cinema is a kind of service which requires a strong connection

between staffs with customers. That’s the reason why a

comprehensive training should be given to the whole staffs to achieve

a certain standard and more importantly, they must understand the

culture of the firm, hence releasing positive attitudes with high

recognition towards the brand. Finally, it is necessary that training

sessions should be designed for staffs before they start their real

performance.

• Customer care

A database of customers should be established to inform them on

new launched movies, special offers. In this field, Megastar has

performed quite well. They created a membership club whom are

given with priorities on booking, ticket price and invited to the first on-

screen of the hottest movies with the appearance of many famous

actors and actresses in entertainment industry. This is highly

appreciated by customers as they not only are the first one to enjoy

the movie but have chance to be exposed to star world as well

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• Management in Purchasing And Inventory

This process plays a very important part as it is directly related

to the benefits of the company. Hence, this should be conducted on

the basis of careful calculation on which film should be bought,

prediction on the rate of viewers (Barlow, 1997)

3 Literature review

3.1 The definition of Quality and Total Quality Management

(TQM)

High qualified products and services are among the top objectives

that every single business firm longs to bring to their customers

because those help them to achieve competitive advantages in the

market. Nevertheless, in fact, it is not a simple task for one to do

especially when there still exists different opinions on the definition,concept and framework of the term “TQM” due to different ways of

approach. Some of them are viewed from customer perspective, the

others from the aspect of operational process.

Garvin (1988) sees quality as multi-faceted concept based on

transcendent, products, users, manufacturer and value while Deming

(1982) and Crosby (1979) agree at one point that quality can meet the

customers’ needs and satisfy them.

Among the continuums of quality such as inspection, quality

measurements, quality assurance, TQM has an important part to play.

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Thoroughly understanding the definition of quality makes it easily

approachable to the concept of TQM.

TQM is also an arguing topic which includes in it a variety of

opinions but the majority reaches an agreement that TQM is the wayof monitoring the whole operation process to create first-rate products

and services to the consumers (Nixon, n.d). Although TQM could

appear years earlier, those 3 words was first introduced in the United

state by Feigenbaum in the year of 1957. Feigenbaum (1983) defines

TQM as an outstanding system which can help to enhance the quality

among individual parts of an organization, hence accomplishing higher

productivity and customer satisfaction. From his view, quality is not

the best but best for customers use and selling price. In his theory,

quality management includes setting up the standards, evaluating

conformance based on the standards, acting when standards are

exceeded and improving the standards. However some incomplete can

be found in his theory, which considers the involvement of all

employees within an organization to be equally significant.

After the first introduction of TQM by Feigenbaum, many scholars

and researchers continues to supplement and complete the models

and frameworks of TQM. Among them, Deming and Crosby are

supposed to be guru. Crosby, in his research, puts emphasis that

prevention from any defects should be considered as the key point to

enhance the quality, not correcting those (Nixon, n.d). It means that

once the product is rightly made from the beginning, it would not

cause any cost other than what has been necessarily put in and at this

point, quality is free. Nevertheless, when error occurs and the product

is in poor condition, the cost would be much increased due to rework

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or even elimination of that product (Pryor, n.d). Also, on recognizing

the role of employees in improving the quality, he gives advice that

motivation should be given to the staffs among the organization.

Furthermore, the cost quality is assessed as one of new key point inhis theory. Yet, some people suppose that his zero defect theory is the

prevention of risk. Crosby’s quality philosophy can be illustrated

below:

Source: Wells, 2011

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TQM, from Deming’s opinion, is directly related to good

management in which it is the responsibility of the manager to

enhance the efficiency of the system as for the employees to perform

better. He thinks that with higher quality achieved, the cost would bedecreased which leads to higher productivity thanks to less rework,

fewer delays and better usage of time and money (Pryor, n.d). The

definition given by Deming is supposed to provide an effective

approach which clearly defines each level from quality improvement to

quality control. Not like Feigenbaum and Crosby, Deming insists that

management has to go with technology and that leadership and

motivation is the key factor. Moreover, he recognized that quality

improvement would depend on the different contexts and therefore,

issued suitable concepts for Japan and then America (Satpathy, 2008).

However, some political issues coercive factors are not mentioned in

his theory.

In general, Satpathy (2008) reaches a conclusion that TQM is a

method through which the leaders and the employees can get involved

in the continuous process of quality improvement of goods and

services.

3.2 TQM models and frameworks.

TQM is a mission in the long run. That’s why the organizations in

reality need model and framework to perform rightly. In fact, there are

a lot of models/ frameworks but those of Deming, Juran and Crosby

stand out among them.

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W. Edward Deming approaches the management by giving a

framework of 14 points in which the customer is positioned as the

most central part. Less waste and rework meaning saving effort,

money and time, together with utilizing cross functional team canenable the organization to get efficiency in operation. This model

draws a way for company to survive and have competitiveness in the

market (Reed et al, 2000).

While Phil Crosby gives out 14 steps heading for improvement.

Juran offers ten steps to approach the goal of the quality

improvement. Those researchers’ opinions cross at points that TQM

framework should go around boosting customer satisfaction and

decreasing the cost. Also, the organization should focus on training

their staffs on the quality and skills to use quality techniques. Deming

and Juran think that most of the quality problems roots from

management level, hence it is necessary to make breakthrough in

managing activities (Zhang, 1997).

All of those frameworks have been described in the Simple framework

of Oakland.

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Figure 3: Simple form of TQM framework

(Source: Oakland, 2003)

Customers and suppliers are at the heart of the framework

enforced by communication and commitment of the staffs within the

organisation. Cooperation and resolution among the staffs to achieve

good quality are highly appreaciated in this model (Oakland, 2003)

Besides, other frameworks have been developed to be suitable for

different kinds of organisations and various contexts.

Deming establishes a continuous sequence of management skills

that the leaders should follow to get the quality improved:

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Deming Circle

Source: Witcher et al (2007)

However, there are some points that need to be improved such

as the circle only focuses on the profits in the short time and rarely

mention on intangible factors…ect….

The EFQM Excellence Model is divided into 2 main factors:

enablers and results, which gives an overview on what an organization

does and what they achieve as the outcome of their performance. This

is an effective tool to assess how well the organization performs and

find out where the improvements should be made and can be

achieved. Thanks to this, an organization is capable of making balanceon its resources and creating realistic plans for development

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Source: Cabinet Office (n.d)

Next, Oakland, on the basis of many earlier frameworks,

introduces new one which emphasize on the importance of 3cs:

Culture, Communication and Commitment and 4Ps: People, Process,

Perfomance and planning.

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Figure 4: Oakland New frame work

(Source: Oakland, 2003)

3.3 What is the future of TQM in the next 5 years

Enhancing the method of managing quality will benefit an

organization in many ways both from the internal and external

aspects. Internally, a good practice will lower the cost failure, at the

same time amplify concentration in work among staffs and create

motivation in working places ….Externally, there will be a higher-

appreciated view towards the image/brand of the company which also

means improve the positive perceptions of the customers towards the

company (WTO, 2001)

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Though TQM has been witnessed to be very beneficial in enabling

organisations going well in business recently as mentioned above,

there is a fact that currently there exists many a model and framwork

about TQM, some of which get outdated and no more practical in thebusiness world today like Baldrige Model (Garvin, 1991). Hence,

upcoming models should be built in more details and adaptable like

Business Excellence Model (BEM), “real world” model…(Leonard and

McAdam, 2003). Mc Adam (2004) also give the idea that Six sigma can

be the answer in long run.

In conclusion, though there are many models and framework

existing, the company should update new methods and study in depth

to find the most suitable ones to apply equivalent to its context and

strategy of development.

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3.4 Applying the concept of TQM in the case of Megastar

To become the market leader, Megastar has partly proven its

success in applying quality management tools in reality. The modelused here is PDCA:

Figure 5: PDCA process

Sources: Bateman (2002)

a. Plan

MSM was newly established in 2005 and right after 1 year

launched Megastar across the countrywide and achieved immediate

success. This can be traced back as the fruit of careful planning based

on data collection and analysis to do the market research. Thanks to

that, MSM really found a blue ocean in Vietnamese cinema market. It

is the high-class Cineplex chain located in the centre of big cities.

Recognizing that demand, MSM strongly invested 5 billion dollars only

on the first theater in the capital of Hanoi and with only 3 months’

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operation, it welcomed 100.000 visitors with the highest revenue in

Hanoi (tin247.com,2008)

b. Do

During the operation, MSM continues to create improvement in

the quality of the services that it provides. The thing firstly taken into

consideration is that MSM always updates its cineplex with the latest

tehnology of cinema, 3D for example which helps to satisfy customers’

need and hence increase its reputation as the leading one.

c. Check

Measuring and confirming the results are the next steps taken by

MSM. After a short time of performance, recognizing the potential of

this market, it continued to expand to Ho Chi Minh and other 4

provinces to make the service more easily accessible and at this time,

it accounted for 30% marketshare (source). However, it went too far

on opening one more cineplex in Ho Chi Minh city, revenue of which

was not good. As Plan – Do- Check- Act is a continuous process,

hence after evaluating, balancing the cost and benifit, MSM gave out

assessment and decided to close this cineplex.

d. Act

MSM standardlizes its quality of services from the appearance of the cineplex, all are in conformance. The operation process at thecineplex and the workstyle of the staffs are also made homogeneous.This step continualy promotes the improvement.

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3.5 The challenges of Megastar in operation.

It is no doubt that the competition in the market becomes much

fiercer each day in which it is customers that have power in their

hands to decide the survival and thriving of a company. As for anemployee in manufacturing sector, it is easy for them to realize the

quality of the product because it is visible. However, in service sectors,

the staffs are not always aware of what they produce and can not give

out the stable quality all the time (Graham, 1992). That is why it is the

role of management level to standardlize and aware them. In Megastar

cineplex chain, typically the one that located in Hanoi, on the high

peak time, the situation of lacking selling staffs often happen. This will

cause an inconvenience for customers and leave fairly bad impression.

Other than that, ethic working of the staffs here is not quite high

which has bad effect on the image of the company. Currently, with the

appearance of Loteria cineplex by Korea, Megastar, to keep its position

in the market, needs step by step improve the quality of its service by

researching and apply the suitable model of quality management.

4 Conclusion

The business world today regards TQM as an effective tool.

Though many arguments still exist around TQM but most reach an

agreement that TQM is a method of management used to enable an

organization to achieve high quality via the efforts to createcontinuous improvement by all staffs. Megastar is the first premium

Cineplex in Vietnam with a lot of comparative advantages. However,

together with the appearance of new competitors with strong

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investment, Megastar should continue to improve its services quality

from the attitudes of the staffs to proper scheduling among them.

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