BSB, Inc. Case (abstracted from Krajewski & Ritzman, Operations Management ,6 th
ID: 396087 • Letter: B
Question
BSB, Inc. Case
(abstracted from Krajewski & Ritzman, Operations Management,6th edition)
DUE ON SEP 11, IN CLASS – ONLY HARD COPIES, NO EMAILS!
Renee Kershaw, manager of BSB food services at a medium-sized Midwestern university, has just decided to expand her year-old pizza service on campus. However, she has just learned that a new food court will be constructed, which will permit operations from Taco Bell, Dunkin’ Donuts and Pizza Hut. BSB is a national food-services company that varies its level of service to suit client organizations. BSB is managing all of the current food facilities on campus. However, there are new entrants to the market. Demographic data for this campus:
City Population
Faculty, Staff, etc.
Students
200,000
3,000
6.000
The campus is not walking distance from any other retail shops or restaurant facilities. Supporting amenities (such as bookstore, bank, food service, etc.) are on campus. There are three food-service facilities managed by BSB. The biggest facility, the cafeteria, is located in the center of campus (the administration building) and is open for three meals daily. On weekdays there’s an upscale luncheon buffet upstairs in the administration building. The third facility is a small grill, open 11 a.m. to 10 p.m. daily and until midnight on Friday and Saturday nights, is in the recreational building near the dorms.
BSB has been operating food services on this campus for the past 10 years, and Kershaw has worked here for a year and a half. When she came, she did market surveys and found that students were somewhat dissatisfied with the food services. In fact, a large amount of food consumed by students was not from BSB:
% Food prepared in dorm rooms
20
% Food delivered from off campus
36
%Food consumed off campus
44
Students complained about lack of variety and inconvenient cafeteria hours. Kershaw also found:
% Students with cars on campus
84
% Students with refrigerators/microwaves
62
% Students consumed food outside of BSB
43
Kershaw’s response was to expand the grill menu to include pizza, and begin a delivery service (by bicycle). There were a limited number of toppings and combinations, and the grill equipment and personnel were adapted to the new product line.
As a result of the introduction of pizza, sales over the past 10 months had increased, along with profits. Students were happy with the quality of the pizzas and speed of delivery. However, with increasing demand, existing equipment was inadequate, and there were delivery delays. In the past month, sales had leveled off. There were also growing requests for toppings and combinations not on the menu.
Questions:
1. Describe the competitive position of BSB. Who are its competitors? What is the customer value proposition? How does BSB distinguish itself from its competitors?
2. What are BSB’s resources? Include both tangible and intangible resources.
3. Describe the processes of this company. What are the structured sequences of activities? What technologies are used? How is supply matched to demand?
4. What are the competencies of BSB? How are they related to cost, time, quality and flexibility?
5. Is BSB’s strategy well supported by its operations? If so, give examples. If not, give examples.
6. What impact will the new food court have on BSB’s pizza operations? Should its competitive strategy change? What changes in operations strategy, and operations (i.e. resources and processes) would be necessary to support the new strategy? What are your recommendations to BSB?
City Population
Faculty, Staff, etc.
Students
200,000
3,000
6.000
Explanation / Answer
1. Describe the competitive position of BSB. Who are its competitors? What is the customer value proposition? How does BSB distinguish itself from its competitors?
BSB’s competitive position is a combination of offering low cost and upscale options and flexibility with customization. BSB’s competitors are the new food court that offers fast foods such as Taco Bell, Pizza Hut and Dunkin Donuts. They are also competing against food prepared in dorms, food delivery from other establishments and food consumed off campus. BSB’s customer value propositions are convenient hours and convenient locations, near the dorms. BSB distinguishes itself from their competitors by having the capacity to adjust its services to meet the needs of their customers, such as providing delivery service.
2. What are BSB’s resources? Include both tangible and intangible resources.
BSB’s tangible resources are their equipment, raw materials, finished products (food) and operation locations (cafeteria, Luncheon buffet and small grill). BSB’s intangible resources are the recipes they use to make the foods and the initiative that their employees take to make BSB more successful. For example, Renee Kershaw took the initiative to do market research and with those results she developed a strategy that better fulfilled the customer’s needs and increased profits.
3. Describe the processes of this company. What are the structured sequences of activities? What technologies are used? How is supply matched to demand?
The processes of BSB as a food company are similar to many different companies, such as, capital acquisition, budgeting, hiring, compensating their employees, human resources, information systems, purchasing and warehousing. The structural sequences of activities are preparing food, selling food to their customers and then cleaning the kitchens and or dining areas. The technologies that are used are all the kitchen appliances, the cash registers as well as any software used for administration. Supply has been matched to demand by using the data found through Kershaw’s survey. Kershaw understood the needs of her customers and adjusted accordingly by providing, not only a new product but also a new service.
4. What are the competencies of BSB? How are they related to cost, time, quality and flexibility?
The main competencies of BSB are their workforce (Kershaw), facilities (small grill, upscale luncheon buffet, cafeteria), market knowledge (Survey analysis) Systems and technologies (kitchen appliances, administration software), they are a well established stable company, and they use data obtained to make strategic changes that affect the company’s profitability. BSB’s convenient locations are closely related to time efficiency. By having multiple locations, easily accessible to college students and staff BSB saves time on delivery. Their workforce is related to quality as shown by Kershaw’s successful strategy to meet customer needs. Cost is related to their use of market knowledge that is shown by the fact that Kershaw only offered limited toppings on their pizza and yet still being able to customize it somewhat. Flexibility is related to the separate locations, options, as well as the individual choices made by customers in any of the BSB establishments.
5. Is BSB’s strategy well supported by its operations? If so, give examples. If not, give examples.
I do not believe that BSB’s strategy was well supported by their operations because Kershaw does not have the space to grow in the short term. She is unable to meet the growing demand for pizza delivery. Kershaw is also not providing the variety that some of her customers are requesting, either because it is cost prohibitive or the raw materials are unavailable. It seems she restricted the pizza topping options to save money and time. This strategy may have backfired since sales have now reached a plateau.
6. What impact will the new food court have on BSB’s pizza operations? Should its competitive strategy change? What changes in operations strategy and operations (i.e. resources and processes) would be necessary to support the new strategy? What are your recommendations to BSB?
The food court has several impacts on BSB’s pizza operation. All the food options would be more competition but especially Pizza Hut because it is the same type of product. Also, Pizza Hut has the capacity to fulfil the orders that BSB is not able to fill and can provide the variety that many customers are asking for. BSB could make some changes to their operations strategy and operations to compete with the new food court. In the short run, BSB could open their grill for a longer time period to be able to meet some of the pizza demand that they currently cannot meet. BSB may also consider hiring more staff to fulfil their delivery demand. In the long run, increasing the size of the grill would allow for larger capacity and therefore increase the supply so that they may be better equipped to compete with the new food court. In my opinion, BSB would probably not be able to directly compete with a nationally recognized food chain and so instead of being in direct competition with Pizza Hut it may be a good idea to become a “substitute”. Differentiating themselves from Pizza Hut by offering seasonal toppings that appeal to students, which can be easily discovered with another marketing survey, for example, a gourmet item or two. BSB could also save time and money by opening the grill earlier so that they can pre-make some of the more common pizzas, that way they need only to add the seasonal toppings. BSB should also continue to offer delivery but hire more delivery personnel.
KINDLY RATE THE ANSWER AS THUMBS UP. THANKS A LOT
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.