PGDAB 806 Advanced Operations Management-The Tangible Resources
Research this New Zealand business or organisational setting and critically evaluate the key theories and models that underpin various contemporary resource integration management practices and make informed choices with regard to their validity and reliability for general adoption.You will then be required to critically analyse key strategic concept or factors guiding or affecting planning, policy development, implementation and management of resource integration in this chosen organisation. Your discussion should make reference to relevant advanced operations management theories, models and practices.
The evaluation report should present logical, sequential and persuasive arguments, justified or supported by secondary sources of evidence.
2. Your introduction must provide an overview of the paper's purpose, scope, and limitations.
3. The body/paper paragraphs must cover: i. key theories and models that underpin various contemporary resource integration management practices and make informed choices with regards to their validity and reliability for general adoption. This may include but is not limited to the following: a. Tangible resource b. Intangible resources c. Human resources ii. key strategic concept or factors guiding or affecting planning, policy development, implementation and management of resource Integration.
Answer:
According to Heizer (2016), Operation management can be said as the management of the all the activities and actions for enhancing the business process that is required to convert the inputs (raw material, human resource, and others) into output (goods and services). These goods and services are made to meet the needs and desires of the consumer. According to Anderson and Eshima (2013), resources can be said as the source to attain the competitive advantage. The optimum utilization of the resources determines the success of the organization in the tough competitive market. How the resources are utilized in the organization determines the efficiency of the operation of the organization and performance of the organization. The resources can be classified between tangible and intangible resources. Furthermore, tangible resources are those physical items that an organization possesses. The tangible resources include lands, facilities, raw material, buildings, equipment, and machines. The tangible resources can be
There are various tangible resources continually used by the Starbucks to meets its orders and to perform its business activities. Land and building, furniture and fixtures, tools and equipment are the fixed assets of the organization. Starbucks has its coffee shops at the best places in New Zealand (Starbucks, 2016). The company had launched its business in New Zealand in 1998 but it was hit by the customers in the market of New Zealand as people in New Zealand did not like the coffee of Starbucks. The company has its corporate office where from it manages its overall business over the world. Along with this, the retail stores or outlets are the tangible resources of the organization that it uses to deliver the final products to the customers. It has a number of retail outlets in the New Zealand. The Starbucks has more than 30 stores across the country that helps the organization in meeting the needs and desires of its customers across the country. It operates large size hubs and spoke models as outlets. Apart from this, it operates over 40 countries including 9000 cafes.
Furthermore, Starbucks focuses on the high-quality coffee and for meeting that purpose it uses highly technologically advanced machines and equipment for making coffee. That helps in making ensure the quality of coffee as well as timely delivery of an order of the customers. The raw material may be coffee beans, milk, and water (TermPaperWarehouse, 2017). The Starbucks uses high-quality coffee beans (Robusta and Arabica). At the same time, highly knowledgeable and efficient staffs work in the Starbucks. The competency of the employees ensures the effectiveness of the organization. The workforce of the Starbucks is very affluent.
Apart from this, the financial resources are also very necessary to meet the financial need of an organization. Financial resources mean the resources wherefrom the organization takes financial help. The financial resources may be cash or cash equivalent assets, marketable securities, and banks loans and others. The sales revenue of Starbucks in 2015 was USD 19.16 billion and the net income was USD 2.76 billion (Starbucks, 2016). Apart from this, the financial resources can be used to compensate the employees and others. Starbucks provides competitive pay, insurance, bonuses, paid leaves, retirement savings plan, a free pound of coffee every week, and emergency finance facility to the employees to keep qualified and proficient employees in the organization.
Intangible Resources:
Intangible resources are those resources that cannot be measured, seen, and quantified like the tangible resources. Intangible resources are important equal to the tangible resources for the success of the businesses. The intangible resources help in determining the competitiveness and uniqueness of the organization. The intangible resources are immaterial in nature that an organization cannot measures. The intangible resources wear down unlike tangible resources. The value of the tangible resources decreases or depreciates over the years (Alipour, 2012). On the other hand, the value of the intangible resources remains same over the years also. Intangible resources obtain good quality and value over the years. The intangible resources must be given more weight for the successes of the organization. The intangible resources provide support into meeting the customer's desires using tangible resources.
The intangible resources are those assets of the organization attracts a large number of the customers. It is very challenging task for the organization to manage its intangible resources. The intangible resources are embodied by the organization in the products or services by the quality of products and services. There are different intangible resources that determine the success of an organization (Kumlu, 2014). The intangible resources include patent and trademark, brand reputation or goodwill, copyrights, relationship with customers, technology know how, and innovation and creativity. The intangible resources in Starbucks include:
The knowledge of the know-how can be said as the intangible resource at Starbucks that make it more innovative and unique from others. The Starbucks Corporation uses best techniques for roasting and brewing coffee. Along with this, the Starbucks focuses on establishing the relationship with its employees. The effective relationship with employees improves the morale of employees and motivates them to perform better (GuruFocus, 2017). Therefore, this works as a resource for improving the productivity and performance of the organization. Apart from this, the Starbucks has a large number of customer’s base that shows how loyal customers are to the Starbucks. The relationship with customer helps the Starbucks in achieving competitive advantage in the market. At the same time, brand reputation of Starbucks is very good in the market that supports the Starbucks in achieving the objective of competitive advantage in today’s competitive environment. Starbucks is known for its coffee. Trademarks can be said as the asset of brand reputation. The trademark infuses the trust into customers for the brand.
Human Resources:
Human resources can be defined as the people required completing the project and task of the organization. Moreover, according to Armstrong and Taylor (2014), human resources are the people required at the different level of the organization to perform activities and task in the organization to achieve the organizational objectives. The human resources provide their service to the organization in lieu of certain payment as salary or wages. Without human resources, an organization cannot be run anyhow. The efficiency and productivity of the human resource determine the success of an organization. How efficiently and effectively the human resource in the organization is used plays a vital role in determining the growth and success of an organization in the competitive market.
The companies use skills, knowledge, and ability of the human resources (Hendry, 2012). Any organization seeks to learn flexibility and skills in employees or human resources rather than qualification. Furthermore, the management of the human resources in the organization is most important and most critical activity of the organization. The management of human resource required as skills and ability of the human resources have an influence on the performance and productivity of the organization. The utilization of human resources can be better if they are motivated, satisfied at the job, and provided with the proper facility at the workplace.
Starbucks has more than 238000 employees over its 24,424 locations cafes across the world. It employs a great competent and young workforce that helps the organization in meeting the tasks and orders of Starbucks using other resources on time. The Starbucks establish a good relationship with employees and provide them training timely that improve the skills and knowledge of employees, which in turn improve their productivity at the workplace (Starbucks, 2017). It provides training to employees to teach them how to identify a different kind of beans, how to smell and taste the coffee, how to describe the taste of coffee, and types of coffee, and others. Starbucks follows the culture of 5 Be's :
- Be involved
- Be welcoming
- Be genuine
- Be considerate
- Be knowledgeable
The proficient employees and staff members working in the Starbucks support the brand reputation of the organization in the market (Starbucks, 2016). The CEO of the Starbucks says the happy employees can only the resource for achieving the competitive position in the market. Starbucks provides a good working environment to the employees with effective remuneration system.
Key strategic factors in business Operation:
There are different factors that put influence on the operation of the businesses. These factors include business process, quality control procedure, sustainability standards and others.
Coffee making process description:
The coffees in Starbucks’ restaurants are prepared by following the given steps:
Grind and Measures:
Here the coffee beans are ground before brewing the coffee. Starbucks uses a grinder to grind the beans coffee in small and equal pieces. The coffee beans are ground as such that it resembles sea salt. Along with this, Starbucks puts only 2 tablespoons of coffee per six ounces of water (Starbucks, 2016).
Add Hot Water:
After grinding and measuring, the hot boiled water is added. The water boiled off just before a while is poured into the press in such a quantity that the ground of the press became saturated. Starbucks uses filtered water to make the customers experience effective and tasty coffee in the different flavor.
Place Plunger and Brew:
This is the third stage of preparing coffee. The plunger is put on the press and let the coffee brew for 2 to 4 minutes.This is the last step in preparing coffee. The plunger put on the press must be gently depressed unless it reaches to the ground of the press. Then the coffee is poured into a vessel to make it serve to customers (Starbucks, 2016).
Coffee quality control:
According to Perez-Aleman (2012), the quality of products and services are most important for the success of any business as the customers have become more sophisticated and more quality centered. This can affects the operation and business of any organization. Today, quality has become must for achieving the competitive advantage and for ensuring long term sustainability in the market. The quality is a factor that gives reputation and cost of the product that influences the behavior of the consumer (Orth et al, 2015). Today, Starbucks is famous as a global brand in every corner of the world. In New Zealand as well, Starbucks has become famous due to the quality of coffee and brand name.
An attribute control system is used at Starbucks which measure the quality of the coffee. It identifies in a process that which item is defective or which items are good. The managers at Starbucks check the ingredient regularly to identify how many ingredients, what types of ingredients have been sold till. If the ingredients are used in too much quantity then the workers are notified about the mistake and told to reduce the quantity. If the ingredients are used in a lesser amount, the managers generally stern to the workers. If the workers use ingredients in much quantity then they could be fired (Orth et al, 2015). Apart from this, the customer survey is also an important tool in the controlling the quality in the products. The Starbucks uses customer survey to get their views on its products and services. It is because the feedback of customers can be used for improving the products and services of the company. The company review on customers among 25 customers. This helps Starbucks in improving the quality and taste of its coffee. Apart from this, Starbuck introduced FlavourLock Technology to ensure the quality of coffee (Jimmy, 2015). Apart from this, Robusta and Arabica coffee bean are used by the Starbucks that make sure the quality of the coffee. The Starbucks meet all the local food and drink standard in New Zealand as well as the international standards to ensure supply of high-quality coffee.
Starbucks believes that the exceptional coffee can only be prepared from the exceptional beans. The Starbucks has a group of employees that consists of both men and women aging from 20 to 50s who assess the beans of coffee effectively that provides almost 75% judgment whether the company should purchase the beans or not. The Starbucks has seven cuppers that test the exceptionality of the beans of coffee (Sprudge, 2017). A team of 7 cuppers in lab determines the quality of 500 million pound coffee per year. The procedure of maintaining high quality in coffee, the Starbucks follows following steps:
The best coffee beans can be grown at the place of higher altitudes. The warm day and cold night creased more dense beans of coffee, which has a complex flavor. The Starbucks Corporation takes steps to help and support the farmers in growing best beans of coffee. Our support centers test the soil and provide advice to the farmer free of cost (Starbucks, 2016). The Starbucks Corporation puts efforts on nurturing a deep relationship with the farmers of coffee as the farmers nurture the beans. The corporation purchases coffee beans from farmers at a fair price. After this, the coffee cherries are picked up at the time of harvesting the coffee. The coffee cherries are sorted many times based on their color, size, and density. The corporation has the target of testing 1000 cup of coffee every day to verify and assure the quality of the coffee.
Sustainability Standard for Coffee:
A sustainable standard refers to the standards for measuring the quality of production of coffee beans and chain of processing. The Starbucks introduced a sustainability standard that is called as C.A.F.E (Starbucks, 2016). C.A.F.E standards for Coffee and Farmer Equity that help the Starbucks in ensuring the supply of coffee of high quality along with support and guidance to the farmers. The Starbucks Corporation has invested more than $100 million in the farmer support centers, farmer loans, collaborative farmer programs, and global farmer fund programs (Ashworth, 2016). For sustainability, the Starbucks ensure the compliance with its economical, social, and environmental responsibilities. The Corporation cares for the people, planet, and product to ensure the sustainability.
Conclusion:
From the above analysis, it can be concluded that Starbucks is enjoying a good position in the competitive market of New Zealand. The Starbucks Corporation has efficient resources and uses all the tangible, intangible, and human resources in an integrated manner. The management of integration of these resources leads competitive advantage to Starbucks. The tangible resources assist Starbucks in executing the business processes and activities while intangible resources support in achieving the objectives of sustainability in the competitive market using tangible resources effectively.
The Starbucks follows some steps in preparing a coffee. The Starbucks has a robust business process for producing coffee. The Starbucks Corporation focuses on the quality of the coffee. The Starbucks employs a team of 7 cuppers that test the coffee beans to ensure the quality and different kind of coffee flavor. The Starbucks complies with local and global standards to ensure the quality in its products and services. The Starbucks Corporation invests into farmer support center, global farmer fund program, collaborative farmer program, and others for meeting the standard of C.A.F.E. Furthermore, it can be said that Starbucks focuses on the differentiation that can make by combining all the resources in the production house. The combination of tangible, intangible, and human resources is necessary for the company to achieve a competitive advantage that is crucial for the long term sustainability and growth of Starbucks in New Zealand.
References:
Alipour, M. (2012). The effect of intellectual capital on firm performance: an investigation of Iran insurance companies. Measuring Business Excellence, 16(1), pp.53-66.
Anderson, B. S., & Eshima, Y. (2013). The influence of firm age and intangible resources on the relationship between entrepreneurial orientation and firm growth among Japanese SMEs. Journal of Business Venturing, 28(3), PP.413-429.
Armstrong, M., & Taylor, S. (2014). Armstrong's handbook of human resource management practice. UK: Kogan Page Publishers.
Ashworth, D. (2016). How Starbucks Brews Up Sustainable Products. Retrieved from https://marketrealist.com/2016/11/how-starbucks-brews-up-sustainable-products/
GuruFocus (2017). Starbucks Corp: Intangible Assets. Retrieved from https://www.gurufocus.com/term/Intangibles/SBUX/Intangible-Assets/Starbucks-Corp
Heizer, J. (2016). Operations Management, 11/e. UK: Pearson Education.
Hendry, C. (2012). Human resource management. UK: Routledge.
Jimmy, K. (2015). Worldwide Innovation Practices-Adoption, Adaptation and Implementation Review. Scholedge International Journal of Business Policy & Governance ISSN 2394-3351, 2(6), pp.32-40.
Kumlu, Ö. (2014). The effect of intangible resources and competitive strategies on the export performance of small and medium sized enterprises. Procedia-Social and Behavioral Sciences, 150, pp.24-34.
Orth, R., Scheumann, R., Galeitzke, M., Wolf, K., Kohl, H., & Finkbeiner, M. (2015). Sustainable corporate development measured by intangible and tangible resources as well as targeted by safeguard subjects. Procedia CIRP, 26, pp.630-634.
Perez-Aleman, P. (2012). Global standards and local knowledge building: Upgrading small producers in developing countries. Proceedings of the National Academy of Sciences, 109(31), pp. 12344-12349.
Sprudge (2017). Quality Control At Starbucks: A Team Of 7 Decides On 400 Million Pounds Of Coffee Year. Retrieved from https://sprudge.com/fast-co-starbucks-cupping-51732.html
Starbucks (2016) Resources. Retrieved from https://solutions.starbucks.com/resources
Starbucks (2016). Ethical Sourcing: Coffee Quality. Retrieved from https://www.starbucks.in/coffee/ethical-sourcing/coffee-quality
Starbucks (2016). Ethical Sourcing: Coffee. Retrieved from https://www.starbucks.com/responsibility/sourcing/coffee
Starbucks (2016). How to Brew: Coffee Press. Retrieved from https://www.starbucks.in/coffee/how-to-brew
Starbucks (2016). Our Company. Retrieved from https://www.starbucks.in/about-us/company-information
Starbucks (2017) Human Resources. Retrieved from https://starbucksrohan.wordpress.com/human-resources/
TermPaperWarehouse (2017). Identify the Resources, Capabilities and Distinctive Competencies of Starbucks. Retrieved from https://www.termpaperwarehouse.com/essay-on/Identify-The-Resources-Capabilities-And-Distinctive/88219
