Lesson 1 - Introduction to Quality PDF

LESSON 1 - INTRODUCTION TO QUALITY AND SERVICE QUALITY Quality means that the products meet and exceed all requirements, standards and specifications. 1. "Fitness for use". 2. To do a right thing at first time. 3. To do a right thing at the right time. 4. Find and know what customer wants....

LESSON 1 - INTRODUCTION TO QUALITY AND SERVICE QUALITY Quality means that the products meet and exceed all requirements, standards and specifications. 1. "Fitness for use". 2. To do a right thing at first time. 3. To do a right thing at the right time. 4. Find and know what customer wants. 5. Features that meet customer needs ang give customer satisfaction. 6. Freedom from deficiencies or defects. 7. Conformance to standards. 8. Value or worthiness for money, etc. DEFINING QUALITY FROM VARIOUS PERSPECTIVES 1\) Employees\' perspective Employees define quality as their perception of the overall value they get from working in an organization. This includes the following aspects: - Knowing clearly what is expected of them - Feeling proud of the work ([job satisfaction](https://www.qualitygurus.com/job-enrichment-vs-job-enlargement/)) - Ability to earn more money than elsewhere. - Ability to improve processes and ability to make changes (empowerment) 2\) Organization\'s perspective Organizations define quality as the level of customer satisfaction, leading to higher profits and market share. They also consider the following aspects when defining quality: - Long term profits - Being market leader - Meeting specifications - Better [client satisfaction](https://www.qualitygurus.com/factors-affecting-customer-satisfaction/) - Cost-effectiveness - [Reliability](https://www.qualitygurus.com/link/re/) 3\) Customer\'s perspective The customer defines quality as the extent to which they get what they want from the organization. Customers consider the following aspects: - Getting a good product or service - Low maintenance - Free from deficiencies - Aesthetics - [\"wow\" effect](https://www.qualitygurus.com/kano-analysis/) - Safety 4\) Supplier\'s Perspective Suppliers define quality as the degree of conformity between the delivered goods and the required specifications. They consider the following aspects: - Technical compliance and acceptance by the buyer - Re-orders - Reduced variation - Doing it right the first time - Timely delivery 5\) Society\'s perspective Society defines quality as the extent of social benefits derived from the organization. It considers the following aspects:  - Less waste - Durable products - Employment opportunities - Low pollution - Social responsibility - Environmental [sustainability](https://www.qualitygurus.com/what-is-sustainability/) - DEFINITION OF QUALITY BY "QUALITY GURUS" Philip Crosby Quality is conformance to requirements. ------------------- ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- W. Edwards Deming Quality is predictable degree of uniformity and dependability, at low cost and suited to the market. Dr. Joseph Juran Quality is fitness for use/purpose. RJ Mortiboys Quality is synonymous with customer needs and expectations. Mike Robinson Quality is meeting the requirements of the customer-now and in the future. Armand Feigenbaum Quality is the total composite product and service characteristics of Engineering, Marketing, Manufacturing, and Maintenance through which the product and service in use will meet the expectations of the customers Definition of Quality in Hospitality Industry Quality in the hospitality industry is defined as *"the consistent delivery of products and guest services according to expected standards".* Increasingly, guests are willing to pay more when they visit hospitality properties offering service that meets or exceeds their service expectations. By creating value for the guest, the hospitality business can manage successfully to retain its guests. Managers must recognize the importance of client retention, since the attraction of a new customer is regarded to be more expensive and time consuming. Dimensions of Quality for Service Products There are eight dimensions of quality that was defined by David Garvin, who passed away in 2017 at the age of 64. [David Garvin](https://www.hbs.edu/news/releases/Pages/david-garvin-dies-at-64.aspx) was a Professor of Business Administration at Harvard Business school and his publications on quality were based on his research on U.S. manufacturers. 1\. Performance Performance has to do with the expected operating characteristics of a product or service. Does a service or product do what it's supposed to do? The primary operating characteristics involve measurable elements, which makes it easier to objectively measure the performance. 2\. Features What the dimension 'performance' doesn't focus on are the features, the characteristics that decide how appealing a product or service is to the consumer. Such features are the extras of a product or service and complement its basic functioning. This means that the ones designing a product or service should be familiar with the end-users and should be updated on developments in consumer preferences. 3\. Reliability The focus of the dimension reliability is more on how long a product will perform consistently according to the specifications of that product. This is important to customers who need the product to work without any errors and contributes to a brand or company's image. The dimension reliability shows the probability of the product having signs of error within a specific time of period. For measuring reliability you should measure the time to the first failure, how much time there is between failures, and the failure rate per a specific time of period. 4\. Conformance This dimension is closely related to the dimensions performance and features. The dimension of conformance is about to what extent the product or service conforms to the specifications. Does it function and have all the features as specified? Every product and service has some sort of specifications that comes with it. 5\. Durability Out of the eight dimensions of quality, the dimension durability is about how long a product will last or perform and under what conditions it will perform. Estimating the length of a product's life becomes complicated when it's possible to repair the product. For such products, the durability will be counted until it is no longer economically beneficial to use it. This is when the repairs and the costs of repairing increase. 6\. Serviceability Serviceability reflects on if the product is relatively easy to maintain and repair. This becomes important for consumers who are more focused on the total cost of ownership as criteria for selecting a product. Serviceability reflects on how easy it is for the consumer to obtain repair service, how responsive the service personnel is, and how reliable the service is. It also focuses on the speed with which a product can be repaired and also the competence and behavior of the personnel. 7\. Aesthetics The aesthetics dimension is all about the way a product looks and contributes to the company's identity or a brand. Aesthetics is not only about how a product looks but also about how it feels, tastes, smells or sounds. 8.Perceived Quality The perception of something is not always reality. Meaning that a product or service can have high scores on each of the seven dimensions of quality, but still receive a bad rating from customers as a result of negative perceptions from customers or the public. Customers sometimes lack information about a service or product and for comparing brands will rely on indirect reviews. Defining and Understanding Service Quality Service quality is a key determinant of an organization\'s reputation and profitability. Companies that want to improve their reputation and generate more profits must constantly measure and improve the quality of their services. So, what is service quality? Service quality measures a company\'s service delivery against customer expectations. This service quality definition confirms that customers have certain expectations and standards of how the company should deliver services to fulfill their needs. Firms with high service quality match or exceed customer expectations. Service quality is measured by considering five key dimensions. These dimensions are: 1. Reliability Reliability denotes the firm\'s consistency in providing services to satisfy the needs of its customers. Elements considered under this dimension include: - The customer interaction process - Mode of service execution - Problem-solving strategies - Price stability 2. Assurance The knowledge and courtesy of employees and their ability to inspire trust and confidence -- creating trust and confidence will gain the customers' loyalty The excellent reputation and high levels of trust based on previous experiences with the company. 3. Tangibles Tangibility is a service quality dimension that measures how the organization presents the quality of its services to customers. Service tangibles include factors such as: - The employees\' attire and conduct - Effectiveness of the customer service department - Nature of marketing materials - Appearance of the company\'s building - Cleanliness of the facilities 4. Empathy Caring, individual attention paid to customers by the service firm to meet each customer's demands properly. Employees' high emphasis on customer requests to achieve higher satisfaction 5. Responsiveness The willingness of the service provider to be helpful, be prompt in providing services, and to respond to customers' requests, problems or complaints The speed of helping customer online or by telephone. **SERVICE PRODUCT: GOOD AND SERVICES** In the world of economics, there are two fundamental concepts that form the basis of any transaction: goods and services. While both goods and services are essential components of our daily lives, they differ in several aspects. Understanding these differences is crucial for individuals and businesses alike. In this article, we will delve into the disparities between goods and services, highlighting their unique characteristics and outlining their advantages and disadvantages. **Points** **Goods** **Services** --------------- --------------------------------------------- ---------------------------------------------------------- Definition Tangible, physical products Intangible, non-physical activities Nature Can be seen, touched, and stored Perishable and consumed at the time of production Production Manufactured or produced Generated or performed Ownership Can be owned and transferred Cannot be owned or transferred Evaluation Tangible attributes (quality, quantity) Intangible attributes (customer experience, expertise) Distribution Physical distribution through channels Delivery through personnel or digital platforms Customization Limited customization possibilities High degree of customization Time Produced before consumption Produced and consumed simultaneously Examples Cars, furniture, clothing Education, healthcare, transportation services Value Dependent on physical features and scarcity Dependent on expertise, convenience, and customer demand THE QUALITY GURUS W. EDWARDS DEMING - One of the pioneers of quality management - known for his work in Japan after World War II, where he helped Japanese companies improve their quality and productivity. - best known for his \"14 Points for Management,\" which outlines the key principles of quality management, and his emphasis on the importance of statistical process control and continuous improvement. JOSEPH M. JURAN - He is considered one of the pioneers of the modern quality management movement - known for his development of the \"Juran Trilogy,\" which consists of three critical components of quality management: quality planning, quality control, and quality improvement. - He is also credited with introducing the Pareto principle in the quality field, which states that 80% of the effects come from 20% of the causes. - author of several books on quality management, which continue to be used as reference works in the field, including Juran\'s Quality Handbook. PHILIP B. CROSBY - known for emphasizing the importance of prevention over inspection in quality management. - He introduced the concept of \"zero defects,\" which aims to eliminate defects and errors in a process or product. - known for his Four Absolutes of Quality: 1. The definition of quality is conformance to requirements. 2. The system of quality is prevention. 3. The performance standard is zero defects. 4. The measurement of quality is the price of non-conformance. - introduced the idea of \"quality is free,\" which is the notion that the cost of preventing defects is always lower than the cost of dealing with defects after they occur. KAORU ISHIKAWA - a Japanese quality management expert known for developing the cause and effect diagram, also known as the \"Ishikawa diagram\" or \"fishbone diagram.\" This tool is used to identify the root causes of a problem and is a critical tool in root cause analysis. - known for emphasizing the importance of involving all employees in the quality management process. - introduced the concept of \"total quality control,\" involving all employees in the quality control process and using data and statistical analysis to drive continuous improvement. SHIGEO SHINGO - a Japanese industrial engineer and business consultant. - known for his contributions to lean manufacturing, including developing the \"Toyota Production System.\" - emphasized the importance of eliminating waste and increasing efficiency in the production process. - credited with introducing the concept of \"poka-yoke,\" which prevents defects in a product or process by designing it so that mistakes are difficult or impossible to make. - developed the Single Minute Exchange of Die (SMED) concept. ARMAND V. FEIGENBAUM - Feigenbaum is known for developing the concept of total quality control, which focuses on integrating all aspects of an organization\'s operations to achieve quality. - introduced the idea of the \"cost of quality\" as a way to measure the impact of poor quality on an organization. **WALTER SHEWHART** - credited with developing the concept of \"statistical process control,\" which involves using statistical methods to monitor and control manufacturing processes to produce goods of consistent quality. - introduced the idea of \"control charts,\" which are graphical tools used to monitor process performance over time and identify when a process is out of control. - His ideas have been widely adopted by industries worldwide and have played a significant role in developing modern quality control techniques. **TAIICHI OHNO** - a Japanese industrial engineer and businessman known for contributing to the Toyota Production System (TPS) development. - considered the father of the TPS, a manufacturing methodology focusing on maximizing efficiency and minimizing waste. - He is credited with developing the \"just-in-time\" production method, which involves producing only the amount of goods needed at a given time, and the \"kanban\" system. - This visual signalling system helps coordinate the flow of materials within a factory. Ohno\'s ideas have been widely adopted by companies worldwide and have helped to transform the way goods are produced. GENICHI TAGUCHI - a Japanese engineer and quality control expert known for his contributions to the statistics and quality control field. - He developed the concept of \"loss function,\" which measures the deviation of a product from its target specification. - He also introduced the idea of using \"robust design\" to create products insensitive to variations in manufacturing processes. Taguchi\'s methods are widely used worldwide to improve the quality of products and reduce manufacturing costs. **LESSON 2: GUESTOLOGY** Many establishments and organizations are doing everything to improve the level of quality service through the performance of the employees. Others develop their systems. Some also embed the concept of corporate culture and environment in their setups. All of these are deemed effective, but sometimes, what we often forget is that the center of the service concept is our guests. This would be the focus of our study- the concept of Guestology. **GUESTOLOGY** is a term originated by Bruce Laval of The Walt Disney it means that all the organization's employees must treat customers like guests and manage the organization from the guest's point of view "GPOV". The concept that Bruce Laval, the father of guestology, introduced has now become a science that deals with understanding the guest. Dickson (2010) defined guestology as the scientific study of the behaviors, needs, and expectations of people in a service environment, and how to use that knowledge to optimally manage a service organization. Klein (2014) mentioned in her study that guestology involves knowing the guests or clients and their needs and wants, perceptions, and expectations. Her approach toward guestology entails involving every person with whom the service provider has in the workplace. Guestology changes the way traditional thinking operates. Instead of focusing on maximizing organizational efficiency, guestology approach forces the organization to start everything it does by looking systematically at the guest experience from the customer's or guest's point of view. The goal is to create and sustain an organization that can effectively meet the customer's expectations and still make a profit. This practice implies that the organization's strategy, staff, and systems are aligned to meet or [exceed the customer's expectations](http://linkedin.com/pulse/importance-guest-experience-wow-gerard-d-manresa?trk=prof-post) regarding the three aspects of the guest experience: [service product, service setting and service delivery.](http://linkedin.com/pulse/habits-make-successful-general-manager-gerard-d-manresa?trk=mp-reader-card) **Importance of Guestology** It has been proven that guestology makes good business sense; actually, it is the standard in the service industry. When put in practice guestology makes it possible to increase guest satisfaction, which leads to more repeat visits, which in turn drives revenues up.\" **CUSTOMER EXPECTATIONS** are any set of behaviors or actions that individuals anticipate when interacting with a company. Historically, customers have expected basics like quality service and fair pricing --- but modern customers have much higher expectations, such as proactive service, personalized interactions, and connected experiences across digital channels. **Factors influence customer expectations** 1. **Product or service quality:** This refers to the level of performance that customers expect from a company based on their prior experience with the product or service. 2. **Brand reputation:** This is how customers perceive your brand, which is based on their past interactions with you or other people's opinions of your brand. 3. **Price:** The price of your products or services usually sets the bar for what customers expect from you. The more expensive your products, the higher your customers' expectations will be. 4. **Fast Customer Service.** The first thing that customers expect from businesses is fast customer service. Customers want their issues resolved as soon as possible rather than waiting hours to get a response. 5. **Accurate Data by Self-Service.** Customers expect to be able to find the information they\'re looking for quickly and efficiently, without the need to contact customer support every time they have a query. 6. **Easy-to-Use Websites and Apps.** The user experience is a major factor in customer satisfaction. Customers expect rapid loading of websites and easy navigation. If your website and digital [platforms](https://corefy.com/) are difficult to navigate and confusing, your customers will get frustrated and leave. 7. **Personalized Experience.** Customers want to be treated as individuals and receive customized service. They want you to remember their names, preferences, and what they like. 8. **Innovative Product or Service.** Customers not only expect companies to deliver quality products or services that work as advertised, but they also expect better and better offerings. They're always on the lookout for innovative products and services: something unexpected, fresh, new, and exciting. **What is the hotel guest experience?** The hotel guest experience, ***also known as GX, is the sum total of a guest's interactions with a property and its team members during their stay.*** While the bulk of the guest experience happens on property, beginning with arrival and ending with departure, it also includes pre-stay and post-stay experiences. At each touchpoint in the [customer journe](https://www.cloudbeds.com/articles/traveler-guest-journey-mapping/)y, guests form an impression of their experience that helps them decide whether to recommend the hotel to others and return for future stays. It's, therefore, a top priority for accommodation operators to ensure that all these interactions are pleasant, efficient, and seamless **Stages of the guest experience** How do you ensure your guest experience stands out from competitors? Start by breaking it down into stages that touch on different points in the guest journey. - **Pre-stay** This is a critical time when guest expectations are set through the property's marketing messaging and pre-stay communications. Pre-stay can even include the booking process when potential guests are still evaluating your property, which is why it's so important to have an online booking engine on your website so you can own the booking experience from start to finish. - **In-stay** The moment of truth -- when expectations meet reality. This stage includes the guest's arrival right through to departure and everything in between. Here the experience can vary broadly by property type and services offered. - **Post-stay** After departure, the guest experience continues with [post-stay feedback](https://www.cloudbeds.com/articles/guest-feedback/) and communications, special offers to return, and hotel management responses to reviews. This is also an opportunity to encourage guests to continue to engage with your property by joining your loyalty program or following your property on social media channels if they haven't yet. **Six key components of the guest experience** 1. **Convenience.** For most travelers, convenience is about location and proximity to the places they will visit. But it can also mean in-room amenities such as Wi-Fi and entertainment and facilities such as a restaurant, bar, and function space. 2. **Comfort.** Notions of comfort tend to vary by traveler, but everyone wants a comfortable bed and a good night's sleep. Extras may include bathrobes and fluffy towels or a spa and hot tub. For many, comfort is also shaped by how the hotel and its staff make them feel. Do guests feel welcome and safe? 3. **Service.** Service encompasses the helpfulness, efficiency, and attitude of employees and their availability to accommodate guest needs. With great service, hotels can overcome shortfalls in other areas, but it's hard to overcome a negative service experience. 4. **Quality.** Quality refers to the state of the room, facilities, furnishings, food, technology, and equipment. Is it well-maintained and functional or worn out and neglected? If quality is poor, overall impressions are likely to be negative. 5. **Cleanliness.** All travelers expect a clean, tidy environment. During the pandemic, cleanliness became even more important because it was associated with sanitation and safety. 6. **Value.** To assess value, guests weigh pricing against fundamentals like service, quality, and cleanliness. If guests think the property offers good value, they tend to view everything more favorably. If it feels overpriced, they are more critical. **Technology Trends and The Hotel Guest Experience** Technology is transforming the guest experience. ***"In the post-pandemic world, hotel operations are leaner, guests are more self-sufficient, and everyone is more tech-dependent,"*** reports the Cloudbeds' e-book. **Here are just a few [new technology trends](https://www.cloudbeds.com/articles/tech-based-hotel-trends/) that are changing guest experience management:** - **Automation.** Automated features are built into most technology today, enabling software to handle tasks normally performed by employees. This helps ease the burden on hotel staff and improves efficiency and productivity, freeing up employees to handle more complex tasks and dedicate more time to guests. - **Self-service.** During the pandemic, hotel guests became a lot more self-sufficient. At an increasing number of hotels, guests can now check themselves in, enter their rooms, and order a meal using just their smartphones. All without needing assistance from employees. Many guests now prefer to have self-service as an option. - **Contactless services.** The pandemic also accelerated demand for contact-free services like remote check-in and checkout and contactless payments - **Operational tools**. Behind the scenes, hotel technology helps streamline the guest experience by facilitating communications among the front desk, housekeeping, and maintenance teams and replacing manual checklists with automated alerts. - **[Guest messaging](https://www.cloudbeds.com/articles/guest-messaging/).** Guest service has shifted from in-person and phone calls to digital channels like web chat, SMS, and mobile apps for messaging. Today, you can integrate guest engagement and add other integrations to power your guest communications with AI and chatbots, providing guests with instant answers to frequent questions. Another benefit to using a guest messaging platform is you can use it to send upselling notifications such as upgrades or add-ons to increase your revenue opportunities -- a win-win for your guests and your business! - **Cloud-based property management systems (PMS).** To connect all these applications, more hotels are turning to a cloud-based, integrated PMS platform that consolidates data and technology, empowering staff to provide a friction-free guest experience **Here are seven ways to leverage the latest trends and technology to deliver excellence at every stage of the guest experience.** - **Send a pre-arrival message** Get a head start on the guest experience by sending automated pre-stay emails inviting guests to start planning their stay and sharing their guest preferences. - **Provide remarkable experiences** It's often the little details and personal touches that guests remember most. Train and empower hotel staff to go above and beyond to provide remarkable experiences, like paying attention to guests' special requests or special occasions**.** - **Perform quality checks** Implement safeguards to ensure quality and consistency, whether it's digital checklists, room inspections, spot checks, or silent shoppers. - **Check in with guests** Don't wait to hear about guest disappointments in an online review. Check in during the guest's stay with a [text message](https://www.cloudbeds.com/guest-engagement-software/) or brief survey and ensure any concerns receive immediate attention. - **Practice service recovery** When things go wrong, the real test is how well you manage the situation. Listen to the guest, empathize, apologize, offer solutions, and follow up to ensure the matter is resolved to the guest's satisfaction. - **Solicit feedback** Guest sentiment in reviews and surveys will tell you exactly how guests feel about their hotel experience and what it will take to entice them back -- and others like them. Respond promptly, if only to thank the guest for a fabulous review**.** - **Invest in technology** Stay current with hotel industry tools that enable you to provide the services travelers expect today, whether it's an online check-in process, contactless payments, or self-service, and consolidate technology under one integrated platform. **CUSTOMERS, WHO ARE THEY?** Wikipedia defines a **customer** (sometimes known as a client, buyer, or purchaser) as the recipient of a good, service, product or an idea - obtained from a seller, vendor or supplier via a financial transaction or exchange for money or some other valuable consideration. **Five Major Types of Customers** Customers play a significant role in any business. To understand [customer behavior](https://corporatefinanceinstitute.com/resources/economics/consumer-surplus-formula/) and better allocate resources to different customers to generate the highest profit, it is necessary to identify and segment different types of customers. By better understanding the different types of customers, businesses can be better equipped to develop successful strategies. **Five Main Types of Customers** Customers can be segmented into five main types: 1. **Loyal customers**: Customers that make up a minority of the customer base but generate a large portion of sales. 2. **Impulse customers**: Customers that do not have a specific product in mind and purchase goods when it seems good at the time. 3. **Discount customers**: Customers that shop frequently but base buying decisions primarily on markdowns. 4. **Need-based customers**: Customers with the intention of buying a specific product. 5. **Wandering customers**: Customers that are not sure of what they want to buy. 1. **Loyal Customers** Loyal customers are the top priority customer groups and an important segment to appease. Usually, these customers represent 20% of the customer base and also contribute to the major portion of revenue for the company. Loyal customers purchase products or services over a longer period of time and are likely to be brand advocates for the company. The businesses should also obtain feedback from the customers in order to grow the business to a next level. 2. **Impulse customers** These are the second most attractive segment of customers identified by the businesses. You can effectively upsell or cross sell to these customers. Impulse customers buy products and services spontaneously triggered by an impulse. They don't have a shopping list at hand while purchasing. Impulse customers respond to the recommendations and offers. You need to devise strategies to capture these customers in order to make impulse purchases. 3. **Discount customers** Discount customers play a key role in upbringing the company's inventory. The discount customers contribute to the cash flow of the company. These customers look for discounts, seasonal offers and festive offers. Upselling or cross selling to these customers would be a bit difficult and they are considered to be less loyal towards the company. 4. **Need based customers** Need based customers buy products or services driven by a particular need. They come with a shopping list based on their needs and quickly purchase those products from the store. It is quite difficult to upsell to these customers and they are also less loyal to the business. If their need is satisfied better by the competitor's products they will switch to substitute products easily. In order to retain such customers, you need to develop interaction and a positive 5. **Wandering customers** Wandering customers are those customers that make up the crowd in the mall or a shopping complex. They have no specific need/ preference in their mind and just wander the stores for some enjoyment or relaxation. They in particular do not contribute to the profitability of the company. The customers might love the ambience of the store and might stay there just randomly looking for products. These customer segments do not contribute much to the profit of the business. **Focus on Excellent Guest Experiences:** - The Ritz-Carlton: Crafting a Culture of Personalized Service - Disneyland: Where Magic Meets Exceptional Guest Experience - Zappos: Building a Brand on Customer Delight - Airbnb: Revolutionizing Hospitality Through Community and Trust - The Four Seasons: Delivering Unforgettable Experiences Through Attention to Detail - Apple: Creating a Seamless and Intuitive Customer Journey - Starbucks: Building a Loyal Following Through Personalized Connections - The Peninsula Hotel: Embracing Tradition and Modern Luxury - The Dorchester: A Legacy of Timeless Elegance and Service - The Mandarin Oriental: Cultivating a Culture of Personalized Luxury **Focus on Guest Complaints and Recovery** - United Airlines: From Crisis to Recovery - Learning from a Public Relations Disaster - Domino\'s Pizza: Turning a Negative Reputation into a Success Story - Southwest Airlines: How to Handle Delays and Disruptions with Grace - Amazon: Navigating Customer Complaints in a High-Volume E-commerce Environment - Netflix: Addressing Subscription Cancellations and Maintaining Customer Loyalty - Uber: Responding to Safety Concerns and Maintaining Public Trust - The Marriott: Managing Guest Complaints in a Global Hotel Chain - The Ritz-Carlton: The Art of Apology and Compensation - The Peninsula Hotel: Handling Guest Complaints with Discretion and Empathy - The Mandarin Oriental: Restoring Trust After a Service Failure **LESSON 3: STRATEGIES FOR QUALITY SERVICE** To bridge the gap between the expectation and perceptions of a guest in the tourism and hospitality setting, it is a must to plan the experience carefully. With these critical planning is very much important to properly design and ensure that the best experience is the only experience a guest will receive. In order to bridge the gap between a guest\'s expectations and perceptions in a hospitality or tourism setting, the experience must be carefully planned. A successful guest encounter is anticipated to result in the best possible experience. With this, critical planning is required to create and ensure that a guest\'s best experience is the only one they will have In order to bridge the gap between a guest\'s expectations and perceptions in a hospitality or tourism setting, the experience must be carefully planned. A successful guest encounter is anticipated to result in the best possible experience. With this, critical planning is required to create and ensure that a guest\'s best experience is the only one they will have To bridge the gap between the expectations and perceptions of a guest in a hospitality and tourism setting, it is a must to plan his/ her experience carefully. A productive guest encounter is expected to yield optimum experience. With these, critical planning is very much important to properly design and ensure that the best experience is the only experience a guest will receive. **The Concept of Strategy** In order to bridge the gap between a guest\'s expectations and perceptions in a hospitality or tourism setting, the experience must be carefully planned. A successful guest encounter is anticipated to result in the best possible experience. With this, critical planning is required to create and ensure that a guest\'s best experience is the only one they will have The word "strategy" is derived from the Greek word "strategos"; stratus (meaning army) and "ago" (meaning leading/moving). **Strategy** is an action that managers take to attain one or more of the organization's goals. Strategy can also be defined as "*A general direction set for the company and its various components to achieve a desired state in the future. Strategy results from the detailed strategic planning process*". A strategy is all about integrating organizational activities and utilizing and allocating the scarce resources within the organizational environment so as to meet the present objectives. **Strategy is the blueprint of decisions** in an organization that shows its objectives and goals, reduces the key policies, and plans for achieving these goals, and defines the business the company is to carry on, the type of economic and human organization it wants to be, and the contribution it plans to make to its shareholders, customers and society at large. **Features of Strategy** 1. Strategy is Significant because it is not possible to foresee the future. Without a perfect foresight, the firms must be ready to deal with the uncertain events which constitute the business environment. 2. Strategy deals with long term developments rather than routine operations, i.e. it deals with probability of innovations or new products, new methods of productions, or new markets to be developed in future. 3. Strategy is created to take into account the probable behavior of customers and competitors. Strategies dealing with employees will predict the employee behavior. **Strategy is a well-defined roadmap of an organization**. It defines the overall mission, vision and direction of an organization. The objective of a strategy is to maximize an organization's strengths and to minimize the strengths of the competitors. Strategy, in short, **bridges the gap between "where we are" and "where we want to be"**. **COMPONENTS OF A STRATEGY STATEMENT** The strategy statement of a firm sets the firm's long-term strategic direction and broad policy directions. It gives the firm a clear sense of direction and a blueprint for the firm's activities for the upcoming years. The main constituents of a strategic statement are as follows: 1. **Strategic Intent** An organization's strategic intent is the purpose that it exists and why it will continue to exist, providing it maintains a competitive advantage. Strategic intent gives a picture about what an organization must get into immediately in order to achieve the company's vision. It motivates the people. It clarifies the vision of the vision of the company. 2. **Mission Statement** Mission statement is the statement of the role by which an organization intends to serve it's stakeholders. It describes why an organization is operating and thus provides a framework within which strategies are formulated. It describes what the organization does (i.e., present capabilities), who all it serves (i.e., stakeholders) and what makes an organization unique (i.e., reason for existence). **Features of a Mission** a. Mission must be **feasible** and attainable. It should be possible to achieve it. b. Mission should be **clear** enough so that any action can be taken. c. It should be **inspiring** for the management, staff and society at large. d. It should be **precise** enough, i.e., it should be neither too broad nor too narrow. e. It should be **unique** and distinctive to leave an impact in everyone's mind. f. It should be **analytical**,i.e., it should analyze the key components of the strategy. g. It should be **credible**, i.e., all stakeholders should be able to believe it. 3. **Vision Statement** A vision statement identifies where the organization wants or intends to be in future or where it should be to best meet the needs of the stakeholders. It describes dreams and aspirations for future. An effective vision statement must have following features- a. It must be **unambiguous**. b. It must be **clear**. c. It must **harmonize** with organization's culture and values. d. The dreams and aspirations must be **rational/realistic**. e. Vision statements should be **shorter** so that they are easier to memorize. In order to realize the vision, it must be deeply instilled in the organization, being owned and shared by everyone involved in the organization. 1. **Goals and Objectives** A goal is a desired future state or objective that an organization tries to achieve. Goals specify in particular what must be done if an organization is to attain mission or vision. Well-made goals have following features: a. These are **precise and measurable**. b. These look after **critical and significant** issues. c. These are **realistic** and challenging. d. These must be achieved within a **specific time** frame. e. These include both **financial as well as non-financial components**. **Objectives** are defined as goals that organization wants to achieve over a period of time. These are the foundation of planning. Policies are developed in an organization so as to achieve these objectives. Formulation of objectives is the task of top level management. Effective objectives have following features- f. These are not single for an organization, but **multiple**. g. Objectives should be both **short-term as well as long-term**. h. Objectives must respond and react to changes in environment, i.e., they must be **flexible**. i. These must be feasible, **realistic and operational**. **What is Strategic Planning?** Strategic planning is an organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended outcomes/results, and assess and adjust the organization's direction in response to a changing environment. A strategic plan is a document used to communicate with the organization the organizations goals, the actions needed to achieve those goals and all of the other critical elements developed during the planning exercise. **STRATEGIC MANAGEMENT PROCESS** The strategic management process means defining the organization's strategy. It is also defined as the process by which managers make a choice of a set of strategies for the organization that will enable it to achieve better performance. **Strategic management process has following four steps:** 1. **[Environmental Scanning](https://www.managementstudyguide.com/environmental-scanning.htm)-** Environmental scanning refers to a process of collecting, scrutinizing and providing information for strategic purposes. It helps in analyzing the internal and external factors influencing an organization. After executing the environmental analysis process, management should evaluate it on a continuous basis and strive to improve it. 2. **[Strategy Formulation](https://www.managementstudyguide.com/strategy-formulation-process.htm)-** Strategy formulation is the process of deciding best course of action for accomplishing organizational objectives and hence achieving organizational purpose. After conducting environment scanning, managers formulate corporate, business and functional strategies. 3. **[Strategy Implementation](https://www.managementstudyguide.com/strategy-implementation.htm)-** Strategy implementation implies making the strategy work as intended or putting the organization's chosen strategy into action. Strategy implementation includes designing the organization's structure, distributing resources, developing decision making process, and managing human resources. 4. **[Strategy Evaluation](https://www.managementstudyguide.com/strategy-evaluation.htm)-** Strategy evaluation is the final step of strategy management process. The key strategy evaluation activities are: appraising internal and external factors that are the root of present strategies, measuring performance, and taking remedial/corrective actions. Evaluation makes sure that the organizational strategy as well as it's implementation meets the organizational objectives. **WHO IS MICHAEL PORTER?** Michael Porter is the founder of the modern strategy field and one of the world's most influential thinkers on management and competitiveness. The author of 19 books and over 130 articles, he is the Bishop William Lawrence University Professor at Harvard Business School and the director of the school's Institute for Strategy and Competitiveness, which was founded in 2001 to further his work and research. Michael Porter has been widely recognized for his work. Some of his many honors include Harvard\'s David A. Wells Prize in Economics (1973) for his research in industrial organization. He also received the Graham and Dodd Award of the Financial Analysts Federation in 1980. Michael Porter\'s book Competitive Advantage won the George R. Terry Book Award of the Academy of Management in 1985 as the outstanding contribution to management thought. Porter\'s Generic Strategies Which do you prefer when you fly: a cheap, no-frills airline, or a more expensive operator with fantastic service levels and maximum comfort? And would you ever consider a small company with just a few routes? The choice is up to you, of course. But the point we\'re making here is that when you come to book a flight, there are some very different options available. Why is this so? The answer is that each of these airlines has chosen a different way of achieving competitive advantage in a crowded marketplace. Porter called the generic strategies - Cost Leadership (no frills), - Differentiation (creating uniquely desirable products and services) and - Focus (offering a specialized service in a niche market). He then subdivided the Focus strategy into two parts: \"Cost Focus\" and \"Differentiation Focus.\" - Cost focus means emphasizing cost-minimization within a focused market - Differentiation focus means pursuing strategic differentiation within a focused market 1. **THE COST LEADERSHIP STRATEGY** Porter\'s generic strategies are ways of gaining competitive advantage -- in other words, developing the \"edge\" that gets you the sale and takes it away from your competitors. There are two main ways of achieving this within a Cost Leadership strategy: - Increasing profits by reducing costs, while charging industry-average prices. - Increasing market share by charging lower prices, while still making a reasonable profit on each sale because you\'ve reduced costs. **Remember that Cost Leadership is about minimizing the cost to the organization of delivering products and services. The cost or price paid by the customer is a separate issue!** Companies that are successful in achieving Cost Leadership usually have: - Access to the capital needed to invest in technology that will bring costs down. - Very efficient logistics. - A low-cost base (labor, materials, facilities), and a way of sustainably cutting costs below those of other competitors. 2. **THE DIFFERENTIATION STRATEGY** Differentiation involves making your products or services different from and more attractive than those of your competitors. How you do this depends on the exact nature of your industry and of the products and services themselves, but will typically involve features, functionality, durability, support, and also brand image that your customers value. To make a success of a Differentiation strategy, organizations need: - Good research, development and innovation. - The ability to deliver high-quality products or services. - Effective sales and marketing, so that the market understands the benefits offered by the differentiated offerings. 3. **THE FOCUS STRATEGY** Companies that use Focus strategies concentrate on particular niche markets and, by understanding the dynamics of that market and the unique needs of customers within it, develop uniquely low-cost or well-specified products for the market. Because they serve customers in their market uniquely well, they tend to build strong brand loyalty amongst their customers. This makes their particular market segment less attractive to competitors Cost Leadership requires a very detailed internal focus on processes. Differentiation, on the other hand, demands an outward-facing, highly creative approach. When you come to choose which of the three generic strategies is for you, it\'s vital that you take your organization\'s competencies and strengths into account. **Step 1: For each generic strategy, carry out a [SWOT Analysis](https://www.mindtools.com/amtbj63/swot-analysis) of your strengths and weaknesses, and the opportunities and threats you would face, if you adopted that strategy.** SWOT analysis is a framework for identifying and analyzing an organization\'s strengths, weaknesses, opportunities and threats. SWOT analysis is often used either at the start of, or as part of, a [strategic planning](https://www.techtarget.com/searchcio/definition/strategic-planning) process. The framework is considered a powerful support for decision-making because it enables an organization to uncover opportunities for success that were previously unarticulated. It also highlights threats before they become overly burdensome. SWOT analysis can identify a market niche in which a business has a [competitive advantage](https://www.techtarget.com/searchcio/definition/competitive-advantage). It can also help individuals plot a career path that maximizes their strengths and alert them to threats that could thwart success. **Step 2: Use [Five Forces Analysis](https://www.mindtools.com/community/pages/article/newTMC_08.php) to understand the nature of the industry you are in.** **What are Porter\'s Five Forces?** Porter\'s Five Forces is a framework for analyzing a company\'s competitive environment. It was created by Harvard Business School professor Michael E. Porter in 1979 and has since become an important tool for managers. Porter\'s Five Forces is a model that identifies and analyzes five competitive forces that shape every industry and helps determine an industry\'s weaknesses and strengths. According to Porter, there are five forces that represent the key sources of competitive pressure within an industry They are: 1. **Competitive Rivalry.** Competition in the industry The larger the number of competitors, along with the number of equivalent products and services they offer, the lesser the power of a company. 2. **Supplier Power.** Power of suppliers It is affected by the number of suppliers of key inputs of a good or service, how unique these inputs are, and how much it would cost a company to switch to another supplier. The fewer suppliers to an industry, the more a company would depend on a supplier. 3. **Buyer Power.** Power of customers. It is affected by how many buyers or customers a company has, how significant each customer is, and how much it would cost a company to find new customers or markets for its output. 4. **Threat of Substitution.** Threat of substitute products. It is affected by how many buyers or customers a company has, how significant each customer is, and how much it would cost a company to find new customers or markets for its output. 5. **Threat of New Entry.** Potential of new entrants into the industry A company\'s power is also affected by the force of new entrants into its market. The less time and money it costs for a competitor to enter a company\'s market and be an effective competitor, the more an established company\'s position could be significantly weakened. **Step 3: Compare the SWOT Analyzes of the viable strategic options with the results of your Five Forces analysis. For each strategic option, ask yourself how you could use that strategy to:** - Reduce or manage supplier power. - Reduce or manage buyer/customer power. - Come out on top of the competitive rivalry. - Reduce or eliminate the threat of substitution. - Reduce or eliminate the threat of new entry.