Operations Management (1)

“Controlling the resources of the business to make a product or provide a service efficiently and to a satisfactory level of quality.”

Why OP is important to a new business?

New businesses have operational needs. The owner will require:

·      Premises (location)

·      Machines, computers or other equipment

·      Stocks of supplies (e.g: raw materials for factory or stationery for insurance company).

Operational constraints on a new business:

·      Budget (limited)

·      Expertise (may not be able to afford skilled workers for all activities)

·      Access to ICT & other technology (limited by cost & the level of production of a new business might not justify the cost of the latest technology).

Production methods:

Production means using resources of land, labor & capital to produce goods & services.

Job production:

Job production: Making one-off specialized products for each customer.

(E.g: architects, tailors, & wedding-cake bakers)

Main features	Advantages	Disadvantages
Each product/service is aimed to satisfy the particular needs of one customer.	One-off products/services allow customers’ special requirements to be meet.	Production cost can be high. It is often a slow process as the business must plan & design each individually.
It is a flexible production process – no two needs to be the same.	High prices can often be charged as customers may be prepared to pay extra for specially designed products.	Labor costs can be high, as skilled workers are usually needed.
	Easier & cheaper to set up compared to other methods, thus used for small businesses.

Batch production:

Batch production: Groups of identical items that pass through different stages of the production process at the same time.

(E.g: paint manufacture, school uniforms, soft drinks & takeaway food).

- Might be suitable for some new & small business such as a takeaway restaurant, in which large quantities of dishes could be made in advance & reheated)

Main features	Advantages	Disadvantages
Groups of identical products can be made at the same time.	Cost of each unit produced is likely to be lower than job production as it is more efficient to make a lot of similar items.	Less scope for customizing products – consumers must be prepared to buy similar goods.
Different designs & styles can made in different batches	Different consumer tastes can by supplied by producing different products in different batches.	Can take longer to switch from making a batch of one product to a batch of a different product.
To be profitable there must be demand for the same style, design or flavor of product.		Stocks of finished goods from each batch may take some time to sell.

Operational efficiency:

Operational efficiency: Producing goods/ services to an acceptable standard with as few resources as possible to keep costs per unit low.

Unit costs: The average cost of making each unit.

Specialization: Work is divided into separate tasks/ jobs that allow workers to become skilled at one of them.

Advantages of being operationally efficient:

·      Lower prices to make force competitors business to make a loss if it reduced prices too. This could eventually drive competitors business out of business altogether.

·      Expand business to employ other workers who work as efficient as possible & achieve a high- quality product/service to be as competitive as possible.

How can one firm be more operationally efficient than another?

·      More efficient machinery (by using the latest technology, although this can be expensive).

·      More highly motivated (workers work quickly & well).

·      Minimum wastage (virtually everything produced can be sold, means making sure everything that is produced is ‘right first time’).

·      More effective management (faster production methods, such as encouraging worker specialization - good managers are at the heart of an efficient business).

Business Coursework - Exemplary Work - Part Five

- FINAL RECOMMENDATIONS

Overall, to iterate my earlier recommendation I think their marketing function needs to be improved immediately as without this they are not reaching their full potential and if Rock ‘N’ Sole Plaice follow my recommendations above they will be able to reach the owner’s aim to increase their revenue by 5% (see appendix F7). I believe the one area in marketing that needs to be addressed is their promotion because other factors such as product, price and place all resulted in mixed opinions which must mean a percentage of the population is happy with them (see appendix A). Therefore, perhaps if they expose themselves to a wider customer base through a variety of promotions they will be able to bring in new customers, in which a proportion of them will be satisfied and thus become loyal customers. As a result, it will increase their performance as a business because they would generate higher revenues to reinvest in expanding the business.  

Business Coursework - Exemplary Work - Part Four

- STRATEGIES FOR IMPROVEMENT?

To improve this area, the sub sections of marketing need to be dealt with separately. Below I have identified some strategies for improvement in each area: 

-Product

To improve their product, which is the food at Rock ‘N’ Sole Plaice I would advise them to perhaps fire their current chef and hire an experienced chef who has previous work experience at a reputed fish and chips place in Britain. An advantage of this would be that the new chef will be able to make food that tastes like it does back home with good flavor thus resolving the complains stated that they lacked from my research which stated the food lacked taste (see appendix G, E). Although, a disadvantage would be that if they fire the current chef, morale may lower in the business as the employees would be afraid that they might lose their jobs. Alternatively, if Rock ‘N’ Sole Plaice do not wish to take such drastic measures they could sign their chefs up for some cooking classes so that food can be improved upon, this would have significant advantages; firstly, in comparison to my first suggestion this is less extreme, secondly, it would also increase morale as the chef would be happy to gain more experience. Although, this could have disadvantages; they chef could feel insulted and thus his morale could actually lower and another disadvantage of this is that it will definitely add to the businesses expenses.  Also, I think they need to start sourcing their food from another company as many complain the food is not fresh. The advantage of this will be that they will have resolved the complains of the food not seeming fresh, however a disadvantage would be that a disturbance in trade and change of suppliers may actually lead them having to increase prices to cover costs, which some may not be willing to pay and thus Rock ‘N’ Sole Plaice may lose some customers in the short term, but in the long term it would be beneficial. Moreover, they also need to improve on their range of food, they simply need to do this by adding more variety to their menu, perhaps they could look at some of the competitor’s menus and borrow their ideas, and also they could take a suggestion from their customer and expand their drink variety (see appendix A13). The advantage of this would be that they will become the dominant competitor and will be able to steal customers from their direct competitor, however as a result of Rock ‘N’ Sole Plaice doing this they would have increased competition, which may result in their competitor fighting back and thus improving their marketing functions too which would affect negatively on Rock ‘N’ Sole Plaice. Lastly, they also need to improve their food packaging, by paying attention to detail, perhaps they could use environmentally friendly packaging as one customer suggested (see appendix 15). An advantage of this would be that they would be becoming an ethical company and could establish themselves as environmentally friendly to gather more customers, although a disadvantage of this would be the high cost to use environmentally friendly packaging. 

-Price

Although, pricing was generally rated positively, it still has space for improvement. For instance, although they have taken into account their target market of students by providing a student menu, it still seems like 40% people do not feel it is affordable (see appendix A8). However, I do understand if they lower their prices more they would probably not be able to afford to be in business anymore, therefore I would suggest that they start giving small promotions to students such as giving 10% off if the customer presents a valid student ID or giving out cards where if you collect a certain amount of points you will be able to a discount or free meal. An advantage of this would be that it would motivate customers to eat more often at Rock ‘N’ Sole Plaice thus build customer relationships and as a result help reach the owner’s aim to increase revenue by 5% this year (see appendix F7). Although, a disadvantage of this would be that they would be losing on its full potential revenue as they are giving discounts and free meals, however I think this extra expenses would be balanced by the numerous customers this strategy would attract.

-Promotion

In regards to the marketing function, this area is the one that could be improve significantly and have the most impact on marketing. Firstly, they need to start advertising in magazines such as Timeout or newspapers such as 7DAYS or even a popular radio among students such as Virgin Radio. An advantage of this would be that they would be able to establishing themselves and attract more customers, although a disadvantage would be the high cost of advertising, which will add to their expenses in the short term. Alternatively, if they do want to take a cheaper option they could place advertisement in school newspapers of its surrounding schools (see appendix H1); an advantage of this would be that it will reach its ideal target market of students and perhaps their families too and it would be cheaper than my first recommendation, what’s more is that each of these schools have approximately 1000 students and therefore if it places advertisements on each of the seven surrounding schools newspaper Rock ‘N’ Sole Plaice would be exposing itself up to potentially 7000 students. However, a disadvantage would still be the costs and also that its reach would be limited within the school families only. In addition to this, they could improve on promotion by sponsoring events in schools such as International Day or Sporting events, where they could sponsor the food for Britain stalls, an advantage again would be the exposure to more customers however a disadvantage would be that again their reach would be limited within the school families only and also some parents may object to this for ethical reasons. Lastly, I think in order to reach their target market efficiently Rock ‘N’ Sole Plaice need to increase their social network strategy by firstly opening a Twitter account and also by promoting this new Twitter account and their current Facebook account on a large scale in the café by perhaps dedicating a chalkboard just to advertise their social networks. An advantage of this would be that by interaction through social networking could cause an increase in their customer base by encouraging people to share their pages and interacting with customers to create better customer relationships. The only disadvantage would be that they would need to get someone experienced to manage these accounts, as it can be very time consuming and perhaps complicated. 

-Location/Place

Even though the location appeared to be a slight problem, as 10% voted it not suitable (see appendix A9) I think any changes would be too expensive and risky for a business to do in only their second year of business. Therefore, I think Rock ‘N’ Sole Plaice need to start taking full advantage of their location by using the promotion strategies I have mentioned above. However, instead of changing its location I think they should expand their café, an advantage would be that by increasing the number of tables inside and reducing the number outside, they will be taking advantage of the space they have available and discarding complains of it being cramped.  Alternatively, a disadvantage would be the cost to rebuild infrastructure to expand. Regarding the actual interior, they should put up a more noticeable sign of Rock ‘N’ Sole Plaice by increasing its size and using brighter colors than just plain white as its background and adding a splash of color inside the café. The advantage of doing this will be that the ambiance would be improved, as Rock ‘N’ Sole Plaice would appear more appealing and noticeable. However, a disadvantage of this would be the cost to redecorate which will add to their expenses in the short term.  

India's Economy - Part 2

FUTURE

India has one of the fastest growing economies in the world, with growth rate of 8.3% in 2010.

•India is fast on its way to becoming a large and globally important consumer economy.

• The Indian middle class, estimated to be 50 million people, is catching up with the Western culture.

• If current trends continue, Indian per capita purchasing power parity will significantly increase from 4.7 to 6.1 percent of the world share by 2015.

•In 2006, 22 percent of Indians lived under the poverty line. India aims to eradicate poverty by 2020

•To sum it up, India is approaching a strong economy – although some parts of India remain poor.

India's Economy - Part 1

•Tenth largest nominal GDP in the world. 

•Fourth largest in terms of purchasing power parity.

•At a rapid growth of 8.5 in 2010-11.

•The GDP is split into services (55.2%), industry (26.3%), and agriculture (18.5%).

PROBLEMS

•Even after so much growth, approximately 27% of Indians still earn under $1000 per year

•This causes a massive differences between the incomes of people in India.

•

• There is also a high rate of unemployment, reaching nearly 10.8% in 2010

•These problems can be blamed on corruption.

•Corruption has caused many business to not choose India as a location to set up.

•

•The inflation is at 9.22%, but this isn’t worrying people as much as it is in china.