Operational Management Problem Faced by Chick-fil-A

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Table of Contents

History of the Organization
Company Perceived Business Strategy
Business process that needs significant improvement
Changes to make
Main Barrier
Implementation Plan
Reference List

History of the Organization

With over 1500 outlets across 38 states, chic-fil-A Inc is the United States’ second largest chicken-based restaurant chain with an estimated value of $1billion. Its restaurants are run according to a special agreement with operators and seek to build partnerships rather than selling franchises. The company’s success is built around the Chick-fil-A sandwich invented in the 1960s by the establishment’s founder, Truett Cathy.

It’s a private company based in Atlanta, incorporated in 1964 and currently employing over 57, 000 people. The 2009 sales revenue amounted to $ 3.2b representing an 8.6% rise over the previous year’s with a 2.54% rise in same store sales. Chick-fil-A Inc dates back to 1946 when two brothers, Truett and Ben Cathy, opened a small restaurant called Dwarf House in Hapeville, southern Atlanta, at the cost of $10600.

Faced with the heavy bureaucracies, the post world war credit difficulties as well as the 1929 stock market crash that ruined their father’s fortune, the two brothers had a modest and difficult beginning (Spain, 2010).

Ben died in 1949 in a plane crash leaving Truett to singly run the business. In 1951, he opened another restaurant at the nearby forest park that would be gutted down in a fire eight years later without sufficient insurance to put it back up.

Partly inspired by Chicago’s Li’l Abner restaurants and the belief in the imminent rise of the fast foods industry, Truett set up another restaurant in Forest Park with $ 90,000 borrowed from a local bank (Jack, 2001). During this time, the firm’s characteristic boneless chicken sandwich that edged out hamburgers off the menus was invented by Truett.

Enjoying success and with great prospects for growth, Chick-fil-A was incorporated in 1964. In 1967, the first Chick-fil- A restaurant was opened at S. Atlanta’s Greenbriar Mall to cater for shoppers who until then went shopping to malls but had to go elsewhere to eat because there were no restaurants in malls.

Atlanta experienced remarkable growth and with it grew Forest Park, Hapeville and the airport renamed Hartsville.

Chick-fil-A grew tremendously too, driven in part by its characteristic sandwich, strong leadership and personnel as well as the growth in shopping malls, in which the restaurants were located, that it had seven restaurants by 1971, across Carolina and Georgia and by 1974, it had over 21 restaurants.

This paper analyzes operational management problem faced by Chick-fil-A and what the company can do to cure the problem (Camillus, 2008).

Company Perceived Business Strategy

The restaurants use different mechanisms to remain competitive in the changing hospitality industry. It franchises its brand name to various companies across the globe but is concerned about the quality given by these brands. The company cannot be said to have a specific class or group of people that it targets in its production but basically it aims at the whole family production.

There are packages that are said to fit more to the young generation, that is, the youth and there are those that are meant for children. Products are divided into different sizes to cater for the economic welfare of the people thus the well to do and the less fortunate in the society can fit. Innovation and creativity is embraced at almost all stages in production to ensure that the company produces customer satisfactory products.

Chick-fil-A adopts a unique marketing strategy away from the traditional marketing strategy. There is the invention of online marketing and deviation from mass marketing. Online marketing involve using tools of social networks like face book and twitter. The reason for the move is for the company to align itself with the changing population which is increasingly using technology.

When creating a market segment, marketing managers should interpolate the market adequately so as they can devise marketing strategies that can persuade the target customer. Traditional mass marketing has been changed. When developing a marketing strategy, there is need to understand 4Ps of marketing.

To ensure that there is quality in manufactured products the company has an effective supply chain management. Different suppliers offer different quality of goods; the available information about the value of goods from a certain customer are interpolated.

One of the major aims of Chick-fil-A supply chain management is to ensure that goods used in manufacturing are of the right quality and quantity; this goes ahead as it is reflected in the final products of the company. It has an integrated purchase system, where it aims at interpolating the demands for good that it has for a certain period of time.

It is not always that a supply is constant throughout the year however it varies with time and season. After understanding the amount required at a particular time Gantt charts are used to interpolate data and form the background of the case. Computers are used to give data analysis of the trend in supplies required.

Chick-fil-A adopts a TQM management policy. This is a system where a company ensures that it vets all its processes and department for the betterment of the entire organization. It aims at ensuring that all stake holders in an organization benefit from the firm. The organizational culture adopted to ensure that an organization can adopt changes effectively.

Organizational structure should be made in such a way that all departments can integrate efficiently and enhance supervision. When departments communicate effectively, they create a level of efficiency in the entire organization. An organization requires both human and physical resources for its operations.

Management should ensure that these resources have been blend in the most productive manner. This will ensure that there is maximum resource utilization. Human resources are the drives of an organization and thus they should be treated well (Gurvis, 2007).

Business process that needs significant improvement

With globalization, competition has gone a step higher; the hospitality industry is one of the most affected sectors. Traditionally, sales were aimed at creating awareness of existence of a product in the market. However, functions of sales have increased to develop a company-customer relationship. C

ustomer loyalty and building a strong brand name are the advanced objectives of sales. The problem that is facing modern hospitality industry is how to develop their sales associates to align them with the new development in the industry.

Chick-fil-A needs to change its approach in marketing and sales to adopt the new system in the market. The focus has shifted to a more customer services. The following are the objectives that Chick-fil-A should have;

To determine the factors that influences the long-term “buyer-seller” relationship development in the hospitality company
To identify the innate and leaned characteristics, skill and capabilities required for sales success in the company
To understand the impact that the changing marketplace has on the sales management process within the realm of hospitality
To analyze Chick-fil-A sales associates overall effectiveness both at the corporate level and at each of its respective hotels
To tailor a standard Training and Development system for sales associates that meets the industry requirements while remaining loyal to Chick-fil-A mission and core values.

Changes to make

To remain competitive, Chick-fill-A Inc must ensure that it has efficient internal processes. To create efficiency, there is need to interpolate all process and calculate the collation between a number of process. Areas of deficiency are recognized and rectified.

To maintain competitiveness in today’s hospitality industry, hotels must focus on the kind of employees that they deploy. They should vet new entrants. Good human resource manager should ensure that he should understand sales person capabilities and how to utilize them for the benefit of the company.

After entry the story should not end there, training should follow. To have an effective sales team, they must be enthusiastic and hold a positive attitude at all time. This will only be attained if the sales manager develops measures to assist his team to be enthusiastic and positive minded.

In the words of Ralph Waldo Emerson “nothing great was ever accomplished without enthusiasm”. As much as possible staffs that can influence or persuade effectively should be deployed. Since to make a good sales person involves in-born traits and nurturing, training and development should be done continuously.

To easily persuade, previous success stories should be explained to the potential customer. Any extra services offered by the hotel should be used as a tool of persuasion. An example of extra service may be a professional talk at a staff meeting offered for free by the hotel for a certain period of time.

Secondly, sales associates should be taught on how to keep in touch with past success. They should understand what is happening in the trade of their past customers and visit them regularly. At the visit they pose as business partners as they discuss what the customers trade is doing and establishing any assistance that their hotel can accord to the customer; this calls for a lot of research on the part of sales people.

There are established loyal customers and an assumption should not be made that they will remain loyal, but they should be visited. In the visit general things are discussed in line with the business. Although the reason for the visit is actually to keep truck and sell, it should not be seen on the face. If there is anything that the hotel can do to improve the current condition of the loyal customer, an offer to do so should be given (Fred, 2008).

Main Barrier

The barriers to change selling strategy are organizational culture and communication barriers. The first step in successful sales strategy is to identify the communication channels to use in coaching sales staffs. This can be through brainstorming where challenges facing the business can be identified. Such challenges can be obtained through reviewing the day to day activities of the business.

Some questions may serve as a guide line, these include: Have employees been provided with a good working environment? Are they happy with what they are doing?

Has the business been able to satisfy all the clients? Is proper information provided to all stakeholders? Is there good flow of conversations? Organizational culture is a set of beliefs that exists in an organization and determines how the employees interact with each other as well as how the workers respond to a certain situation. Culture of an organization determines how employees are going to perceive change.

Implementation Plan

Chick-fil-A exhibits strong growth opportunities through their corporate culture. This can help the organization to increase its sales in the domestic market. According to Pepper (1995), quality assurance is one of Chick-fil-A’s policies and therefore focusing on quality improvement strengthens growth capabilities of the organization.

In addition, branding and multi-branding will enable the organization to increase the market share of the company’s products and as a result high sales volume will be recorded. When implementing the new selling approach, there should be a focus on individual understanding of the needed change. All people should be involved in decision making.

New product development is an essential activity that increases the competitive advantage of any organization and also enables the organization to increase its market share control. Chick-fil-A needs to increase its focus on research and development to ensure that it maintains the lead in the provision of a variety of services. The way customers are approached is brainstormed and the most effective way devised.

Currently, Chick-fil-A concentrates only in the domestic US market as opposed to its competitors. Therefore, market penetration and development is needed to ensure that it serves a wider region including international markets.

Involving old/loyal customer is important as they will give more information about how the trends are changing. They can give information on the approach taken by other companies in the industry a move that will assist in choosing the most efficient strategy to use (Collis and Rusted, 2008).

Implementation timescales

Implementation timescales

Reference List

Camillus, J.C. 2008. Strategy as a wicked problem. Harvard Business Review. 86(5), 98-106

Collis, D.J and Rukstad, M.G. 2008. Can you say what your strategy is?” Harvard Business Review, 86(4), 82-90

Fred, D. 2008. Strategic Management: Concepts and Cases. New Jersey, Pearson Education.

Gurvis, S. 2007. Management Basics: A Practical Guide for Managers. London, Adams Media.

Jack, E. 2001. Management Communication: The threats of group think.Corporate communications. International Journal, 183-192.

Pepper, G. L. 1995. Communication in Organizations: A Cultural Approach. Boston, McGraw Hill.

Spain, W. 2010. High Demand, Weak Dollar Boost McDonalds Revenues Web. Available at: Market watch http// www.marketwatch.com

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