Internal Code: IAH264
I. Describe how you think Wernie will:
a. make sure that the way he manages the hotel is appropriate to the way it competes for business
b. implement any change in strategy
c. develop his operations so that it drives the long term strategy of the hotel.
II. What questions might Wernie ask to judge whether his operation is a stage 1, stage 2, stage 3, or stage 4 operation on Hayes and Wheelwright’s scale of excellence?
III. The case describes how quality, speed, dependability, flexibility and cost impact on the hotel’s external customers. Explain how each of these performance objectives might have internal benefits.
IV. How might an operation such as this improve its performance levels?
Within the context of our postgraduate course of Operations and Project Management, we had to study a case exercise linked with quality operations management.
This case describes the way that Wernie Eisen, General Manager, manages the top- of-the- market hotel Penang Mutiara. This hotel is presented as one of the most luxurious resorts in South East Asia region and has to provide an excellent level of service quality to the customers. Wernie explains in that case how the operation function is organised to satisfy guests’ needs, but also to go beyond their expectations. Our work was not only to review the current operational performance of Penang Mutiara but also to study how it can gain a competitive advantage and improve its performance level with a long term strategy.
We developed our report by answering the questions in order to study in details the operation management of this case. We also used what we have seen in class and many references to get a complete view of the subject. You can find those references’ list at the end of our report. Thank you for your consideration.
Stage 1: Internal neutrality
This stage describes the first and lowest level of operational contribution. As can be seen in the diagram, it is a question of minimizing any negative impact of the function by correcting the major problems. The purpose is to avoid big mistakes, it is not about doing anything positive which could be a source of competitive success. The operations function must be at best reactive and internally focused.
1. Is the operations function viewed as a ‘necessary evil’?
2. Is the operations function inward looking ? For example:
A. Is the hotel well maintened and in good operating condition ?
B. Are the rooms clean and properly equiped ?
C. Are the minimum rooms’ area acceptable ?
D. Is the booking service reliable ?
E. Are the staff courteous ?
F. Is the reactivity of the hotel acceptable to correct problems and avoid next big mistakes?
Stage 2: External neutrality
In this second stage, the operation function has to study the market in order to compare their practice with other competitors. Companies which are staying at stage 2 aspire to the best practice strategies in industry but those strategies are already exercised in the relevant market. At this stage, we can say that companies only seek to catch up with their competitors. The limit is that the operation function doesn’t give to the company any competitive advantage.
– Does the operation function compare itself with competitors’ strategy in order to adopt the best practice ?
– Is the organisation at the same level than its rivals ?
– Does the management try to accentuate productivity improvement ?
Stage 3: Internally supportive
At the third stage, the operation function is based on a real competitive strategy, a business one. The company considers itself as a good competitor which offers the best services in its field and supports objectives of the business. To be the number one in the market, the effort would be to offer differentiated products or services with the better
prices and faster deliveries.
1. Does the operation function maintain business strategy ?
2. Does customers renew the experience again and again ?
3. Is the hotel durable and look good over years ?
4. Does the management try to innovate some practices ?
5. Are customers’ requests fast answered ?
Stage 4: Externally supportive
An operation function at stage four is the best that a company could expect. This one is significantly higher in the domain thanks to its creativity and innovation. The strategy is to redefine industry’s expectations by changing rules of the market expectations through their performance and capabilities.
1. Does the operation function exceed customer expectations ?
2. Is there a better competitor in this field ?
3. Can this hotel be considered as top-of- the-market ?
4. Could Wernie keep his competitive advantage on the market in forthcoming years?
5. Does the Penang Mutiara redefine hotel industry exectations with its innovations ?
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