SQD - Study Guide PDF

Competitive Advantage, Service Quality, and Operational Excellence Okay, here is a detailed briefing document synthesizing the provided sources, focusing on key themes and ideas: Briefing Document: Competitive Advantage, Service Quality, and Operational Excellence Introduction: This briefing doc...

Competitive Advantage, Service Quality, and Operational Excellence Okay, here is a detailed briefing document synthesizing the provided sources, focusing on key themes and ideas: Briefing Document: Competitive Advantage, Service Quality, and Operational Excellence Introduction: This briefing document analyses several sources to provide a comprehensive overview of key concepts related to competitive advantage, service quality, and operational excellence. The analysis draws on academic articles, practical guides, and lecture materials, offering insights into areas including quality definitions, service design, customer understanding, and operational improvement strategies. 1. Defining Competitive Advantage: Core Competencies: The Pepperdine University excerpt emphasizes the importance of defining core competencies. These are "activities, skills, processes, knowledge or perhaps intellectual property" that enable a firm to deliver value to its customers. Crucially, businesses must assess not only what their competencies are, but also their importance to the customer and their performance in each area. This is critical to identify potential areas of focus and improvement. Market Offering: It is critical to define a market offering through characteristics and features but also the benefits. In the case of a coffee product, one must define: “its Aroma flavor color caffeine content perhaps how I pack package it or price it how I present it the shelf life The Source where it's grown”. Similarly, the benefit of a product is based on the customer's perception of the value, for example, “the benefit that my customer receives from this is the hole that that drill bit will drill”. Competitive Analysis: Businesses need a firm understanding of their competitors. This involves listing competitor competencies, determining if they are similar to one's own, assessing their importance to customers, and evaluating competitors' performance. This analysis allows a business to better position itself in the market. Differentiation: The lecture materials emphasize the importance of differentiation. Firms must be able to ask: "Is the Resource Valuable (V), Is the Resource Rare (R), Is the Resource Inimitable (I) (difficult to imitate), Can the Organisation make use of it? (O)". The concept of VRIN/VRIO (Valuable, Rare, Inimitable, Non-Substitutable/Organization) is critical to create true sustainable differentiation. Companies that have unique aspects to the resource are far more likely to be successful. Additionally, differentiation can lead to high customer loyalty, a lack of substitutes, and a strong sales team that can create bonding relationships with the customers. 2. Defining and Measuring Quality: Multiple Perspectives: The "Defining Quality" article highlights that a universal definition of quality does not exist. Quality is a concept with "multiple and often muddled definitions." This is partly because quality can be viewed through many lenses. The article outlines a historical perspective, detailing different perspectives that have been considered: ○ Quality as Excellence: Rooted in philosophy, equating quality to the "finest and most admirable results possible". While inspiring, the definition lacks practical guidance for managers and is difficult to measure. Judgements about excellence are subjective and may vary. As the article states: "Defining quality as excellence means it is understood “ahead of definition...as a direct experience independent of and prior to intellectual abstractions”". ○ Quality as Value: This perspective originated from commercial thinking in the 1700s, where the consumer was seen as "the ultimate arbiter of trade". Quality in this context is based on price and what customers perceive as valuable which can include "multiple attributes of a product and/or service (e.g., excellence, price, and durability)". This definition requires constant attention to both internal efficiency and external effectiveness. However, it can be difficult to identify which component or components of the perceived value most impact the customer. As the article states: "Consumption decisions are based on both price and quality". ○ Quality as Conformance to Specifications: This view, linked to manufacturing advancements and the focus on precision (Henry Ford), defines quality as adherence to predetermined standards. Shewhart’s definition of quality as a measurable process, rather than an abstract idea, is important here. This definition facilitates process improvement and provides objective metrics. This may be inappropriate in the service environment. "Subjective quality was important, but standards could be established and performance could be measured only for objective (quantitative) quality". In this definition "a single definition is not sufficient" and must be understood on the basis of a product or service’s specifications for conformity and the product or services’ use or aptitude. ○ Quality as Meeting/Exceeding Customer Expectations: This modern view defines quality as the degree to which products or services satisfy customer needs and expectations. It's inherently customer-centric, but customer expectations can vary widely and are not always consistent. As the article states: "Customers only judge quality; all other judgments are essentially irrelevant". This highlights the fundamental idea that all other opinions of quality should be secondary to the customer's. The quality must be defined according to what "it is perceived by the customer". Subjectivity vs. Objectivity: In general, the sources confirm that quality is often a combination of both objective and subjective factors. While objective criteria like performance and conformance can be measured, subjective aspects such as customer perception and perceived value are also critically important to the final assessment of a product or service. There is an ongoing discussion of what should take precedence. "The concept of “quality” has been contemplated throughout history and continues to be a topic of intense interest today. Quality presently is addressed in numerous academic and trade publications, by the media, and in training seminars". SERVQUAL: The materials introduce the SERVQUAL model, which assess perceived service quality on five dimensions: Reliability, Assurance, Tangibles, Empathy, and Responsiveness. This tool is meant to measure the "degree of discrepancy between consumers’ perceptions and expectations". 3. Service Design and Processes: Service Definition: A service is defined as “a time-perishable, very often intangible experience performed for a customer acting in the role of a co-producer” or as “doing something for someone and by this act creating value for him”. This highlights both the dynamic and experiential nature of services. Service Blueprinting: The "Service Blueprinting" article highlights the importance of service blueprinting as "a practical technique for service innovation." This tool enables an organisation to visually map their processes, and identify areas of improvement. This process helps with new service design, as well as the improvement of existing services. "The main blueprint forms a common point of reference for all parties concerned with achieving a successful launch of the service". Yellow Transportation is used as an example, as it used blueprinting to move "from 'worst to first’" through customer focused changes. The blueprint helped show all employees where they fit into the customer experience, in effect "from the mailroom to the boardroom, everyone is more focused on the customer". Process Improvement: The lecture materials introduce the Deming Wheel (Plan, Do, Check, Act) as a methodology for process improvement. Additionally, DMAIC (Define, Measure, Analyse, Improve, Control) is a linked to the Six Sigma approach for quality management. The key idea is to take a data-driven approach to identify the cause of problems and implement lasting solutions. "Six sigma means 3.4 defects for 1 million possibilities". Process Efficiency: The "SUMMARY ONTRACK QUESTIONS ENG LESSON - SERVICE CONCEPTION AND PROCESSES" document provides a clear definition of both "process" and "procedure" to better understand the flow of activities. A process is the global action, while procedures are the steps within the process. An example is given of driving from one city to another where the global process is the drive while the procedure are the steps along the drive. Value vs Waste: It's crucial for companies to differentiate between value-added and wasteful steps in their processes. This requires a focus on streamlining processes for the customer. "Inspection Admin paper Regulatorythe action succeeded the first time". This highlights that some forms of "control" can in fact be wasteful. 4. Understanding the Customer: Customer-Centricity: The materials emphasize that understanding the customer is of utmost importance. Companies need to ask: "Who uses our products or services?", "Who is the main customer?", "What value do we bring to each of these customers?". Customer's perceptions are what drive quality, so this must be the primary focus for the company. Expectations, Wants and Needs: The materials define quality based on "Perception - Expectation". The difference is key to understanding customer satisfaction and is a key part of the SERQUAL gap analysis. Customer Segmentation: The material covers customer segmentation strategies. Companies should identify variables for segmentation, develop segment profiles, and evaluate segment appeal. Segmentation can be done using a variety of variables including geographic, demographic, behavioural, and psychographic. The Job-to-Be-Done Theory: This theory suggests that customers hire products or services to do a specific "job". By understanding the customer's desired outcome, a business can better tailor its offerings to meet those needs. As the materials note: "The Job-To-Be-Done (JTBD) method is a results-oriented approach, which aims to understand the task that the customer wants to accomplish and the objective that he wants to achieve by using the product/service in question." Listening to Customers: The material highlights many ways to listen to customers: direct channels (meetings, calls), digital channels (social media, emails, forums), surveys, and focus groups. Businesses need to cultivate a culture of openness to customer feedback. 5. Operational and Cultural Factors: The VUCA Market: The lecture materials note that there is the need to understand the "VUCA" market: volatility, uncertainty, complexity and ambiguity. In times of change and ambiguity, good planning becomes even more important to differentiate a company from its competitors. Hofstede's Cultural Dimensions: The lecture materials use Hofstede’s Cultural Dimensions. They highlight the importance of culture in businesses by showcasing dimensions like power distance, individualism vs collectivism, uncertainty avoidance, and masculinity vs femininity. These dimensions affect management styles and how companies operate globally. For example, "This dimension measures the extent to which a culture socializes its members into accepting ambiguous situations and tolerating uncertainty". Make vs Buy Decision: The analysis covers considerations for "make" (in-house production) vs "buy" (outsourcing). Decision making should be determined by a balance of total costs, strategic importance, and the need for control. As the material states: "The best option depends on total cost, the strategic importance of the activity, and the level of control required." Importance of Merchandising: The summary document states that "merchandising is everything you do to promote and sell your products once the potential customer is in your store". This includes displays, posters, menus, and any other factor that can influence the customer. The materials note that "more than 70% of store purchases are impulse purchases", highlighting the importance of a customer journey that engages all the senses. Enjoyable Queuing: The research on enjoyable queuing suggests that companies should focus on controlling perceptions of waiting time. "A company can reduce customer perceived waiting time by controlling the place of a queue". Additionally, providing information on expected service time, compensating for waiting time, providing distracting diversions, and clear communication can improve the experience for waiting customers. Organisational Culture: Culture impacts the success of a company. "Culture is how we do things around here". Leaders need to understand both positive and negative impacts of a company's culture. Companies can use a culture's existing traits to better implement key strategic initiatives and motivate employees. For example, "Rather than bemoaning the company’s ingrained insularity...the leaders decided to use this feature of its culture to its advantage." 6. Porter's Five Forces and Generic Strategies: Porter's Five Forces: The material introduces Porter’s Five Forces (threat of new entrants, power of suppliers, power of buyers, threat of substitutes, and competitive rivalry). The five forces framework determines an industry's profit potential and allows companies to understand the underlying drivers. For example, the airline industry is considered a "zero-star industry" with all five forces acting strongly against its profitability. Conversely, the soft drink industry is seen as a "five-star" industry where the forces support profitability. Generic Strategies: The document also covers generic competitive strategies of cost leadership, differentiation, and focus. The cost leader is a firm that aims to be "the cheapest" in the market while differentiator uses product uniqueness to appeal to a customer segment. A firm can also decide to focus on a small group of consumers through a focus or niche strategy. Dell is given as an example, because it offers customisation to consumers and a focus on a subsample of the consumer market. Conclusion: These sources underscore the complexity of achieving a sustainable competitive advantage through a superior understanding of product, service quality, operational effectiveness, and customer engagement. Businesses that thoughtfully apply the frameworks and principles outlined in this document are more likely to succeed in today's competitive marketplace. This requires a blend of strategic vision, data-driven decision making, and customer-focused execution.