UIAM
BSB Inc.: The Pizza Wars Come to Campus
AN OPERATIONS MANAGEMENT PRESENTATION
PRESENTED BY
DETY NURFADILAH G1215654
MUHAMMAD USMAN G1210517
MIRZA ZIA G1213229
NURUL HIDAYAH G1133678
UIAM
Introduction
BSB Inc.
Nationally operated food-services company catering to organizations
Target markets:
o Corporate
o Airlines
o University/College
Operating organizational food-services for the past 10 years
Contracted to cater to 6,000 students and 3,000 faculty at the university
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Introduction
The University
The university is a walking university; dorms, classes, bookstore, sundry shop, barber shop, branch bank, and food-service facilities are all within close proximity
The Cafeteria
Large cafeteria on the ground floor of the main administrative building
The cafeteria is open for breakfast, lunch and dinner
The Dogwood Room
Located on the 2nd Floor of the Administration Building
Serves upscale lunch buffet on weekdays only
The Grill
Located at the corner of the recreational building near the dorms
Open from 11 A.M. to 10 P.M. weekdays, and until 12 A.M. on Fridays and Saturdays
UIAM
Introduction
Renee Kershaw joined as the manager of food-services at the university 18 months ago
Undertook survey to determine customer needs and market trends
Survey revealed the following:
Major reasons to consume food off-campus
1. Lack of variety
2. Inconvenient timings
Prepared at
dorms
20%
Food delivery off-
campus
36%
Food
consumed off-
campus
44%
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Introduction
Other findings from the survey:
1. Large percentage of students
with cars
2. Large percentage of students
with refrigerators and microwave
ovens in the rooms
3. Substantial amount of food was
consumed from outlets others
than BSB Inc.
Students
with cars
on
campus,
84%
Students
having
refrigera
tors or
microwa
ves in
their
rooms,
62%
% of
food
consume
d outside
BSB, Inc.,
facilities,
43%
16%
38%
57%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Students with cars on campus Students having refrigerators or
microwaves in their rooms
% of food consumed outside
BSB, Inc., facilities
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Introduction
In response to the survey, Kershaw made the following changes:
Decided to expand the menu at the grill to include pizzas
Installed a pizza oven Allocated space to store pizza ingredients and make pizzas Pizzas offered had limited topping options, so as to minimize lead time
Started delivery service that covered the entire campus
Hired existing personnel to deliver pizzas by bicycle
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IntroductionAftermath
Large orders
could not be
serviced easily
Increasing in
delivery times
Lack of product
variety
Introduction Growth Maturity Decline
The Good,
Sales 10 months after the introduction of pizzas, sales and profits increased steadily
Customers indicated satisfaction with the reasonable pricing and speedy delivery service
the Bad,
Increased demand put strain on The Grills facilities, existing equipment and space allocated were now insufficient to meet demand
Led to delay in delivery
Sales began leveling off
Request for off menu orders
increased
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..And the Ugly!The University recently announced the construction of a new student center which would house three
private food-service providers, Taco Bell, Dunkin Donuts and Pizza Hut
Introduction
Kershaw is especially concerned with the entry of direct competitor Pizza Hut
Pizza Hut is expected to offer a limited selection of pizzas
Will not accept phone orders
Will not offer delivery service
UIAM
Question 1
Does BSB, Inc., enjoy any competitive advantages or core
competencies?
By Mirza Zia
UIAM
Answer
Competitive Advantage
Close proximity to
customers
Location, Location,
Location..Market knowledge This means
Quick delivery times
Lower costs
More in tune with customer needs
Food
consumed
at BSB
facilities
57%
Food
consumed
at facilities
other than
BSB
43%
UIAM
Question 2
Initially, how did Renee Kershaw choose to use her pizza
operations to compete with off-campus eateries?
What were her competitive priorities?
By Muhammad Usman
UIAM
Answer
Kershaw chose to compete on two fronts
ConveniencePrice
Pizzas were reasonably priced
Allowed BSB Inc. to compete with off-campus
operators
Price was the order qualifier
Quick delivery times were ensured by:
Preparing pizzas before hand Delivering through bicycles
Delivery was the order winner
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Question 3By Muhammad Usman
What impact will the new food court have on Kershaws pizza operations?
What competitive priorities might she choose to focus on
now?
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Answer
The Bad News..
New competition will slice the food-service market (get it, pizza, slice..)
The new food court will bring BSB in competition with the new food operators. In effect, BSB will lose its
monopoly over the university campus market
The Good News.
1. BSB Inc. will likely retain its delivery service
advantage
2. Limited variety at Pizza Hut could be an
advantage for BSB Inc.
3. Given standardized menus of large franchises
such as Pizza Hut, they might be unwilling to lower
costs. BSB may likely retain its cost advantage
1. The new competition will enjoy the same location
advantage as BSB Inc.
2. New competitors are backed by brand names
and reputation
3. The new competition offers varieties such as
snacks and fast food
4. Of the three, Pizza Hut would be of major
concern, since it will directly compete with BSB in
the pizza market
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New competitive priorities for BSB should include
1. Product Flexibility 3. Operating Flexibility2. Volume Flexibility
Expand offering to include different
types of pizza toppings,
..snack foods (to compete with Dunkin Donuts) and
.fast food (to compete with Taco Bell)
Increase pizza production to meet
rising demand
Expand operating hours to
capture night-owl market and during times Pizza Hut and the
other operators are closed
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Question 4By Dety Nurfadilah
If she were to change the competitive priorities for the pizza
operation, what are the gaps between the priorities and
capabilities of her process?
How might that affect her operating processes and
capacity decisions?
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Answer
New Priorities
The Gaps
Insufficient space and equipment for making pizzas putting strain on
Grill operations
Higher demand from groups who order pizzas in volume for various
on-campus functions affecting delivery times
Increasing request from student for pizza toppings and combinations
currently not on menu.
Product Flexibility
Operation Flexibility
Volume Flexibility
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If product flexibility and volume flexibility become more important, then the
implications are:
1. Inventory issue
Kershaw needs to stock additional toppings because of demand for variety. This will aid product
flexibility.
2. Delivery service
If BSB Inc. hopes to keep up with the increase of demand and capacity, it will have to increase its
delivery fleet to ensure on time delivery of pizzas to dorm rooms across campus.
3. Capacity issue
Facility: Kershaw need to add capacity to meet increased demand. She may even have to consider
moving into a new area that fully focusing on the pizza operation.
Equipment: Furthermore, Kershaw will have to invest in larger ovens and equipment to meet the rising demand
Personnel: Additionally, it will have to manage staff to operate late nights. This will help BSB achieve
volume and operation flexibility.
UIAM
Question 5By Nurul Hidayah
What would be a good service strategy for Kershaws operations on campus to meet the food court competition?
UIAMSWOT Analysis for BSB Inc.
Strength
Convenience: Offers phone order and delivery service
Affordability: Through a standardized menu offering, BSB Inc. is able to offer affordable meals to students on campus
Market knowledge: BSB is an experienced market player and has deep knowledge about the student food
preferences.
Opportunity
Operating Hours: It is unlikely that Pizza Hut will be operating late nights. BSB currently operates The Grill until 12
A.M. on Fridays and Saturdays.
Standardized Menu: For Pizza Hut, are expected to offer a limited selection of pizzas
Limited Capacity: The existing capacities is not sufficient, and is putting strain on its delivery service
Limited Variety: Standard offering below customer expectations
Threats
Lack of Brand Recognition: BSB lacks the reputable brand name of the new entrants, who are well established in the
market
Lack of Convenience Food Offering: Taco Bell and Dunkin Donuts offer easy/ready-to-go fast food matching with the
student situations (hectic situation and always on the move)
Weakness
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Aspects in Operations Strategy
Operations Strategy
Products
Services
Process & Technology
Capacity
Human Resources
Quality
Facilities
Sourcing
Operating System
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Good competitive service strategy that can be taken by Kershaw:
Varied Menu
Add new types of items such as fast
food options and snacks
Add new types of pizza toppings and
combinations
Affordability
Compete on the basis of price. Large food-service franchises charge similar prices nationwide. They will most likely be unwilling to lower prices, giving BSB the price advantage
Innovation
Extend the menu (with same
ingredients to maintain low cost) but
encourage product innovations. E.g.
Make your own pizzas
Operating Hours
Expand operating hours especially
during examination and special events
on campus
Delivery
Kershaw might take advantage of being the only food-service provider offering delivery service on campus and advertise heavily highlighting their competitive advantage, i.e. fast delivery on campus.
Volume
Kershaw is currently operating at The Grill at full capacity. They will have to increase production capacity to increase pizza production. For this, they will have relocate to a larger area. The cafeteria is a viable candidates for relocation
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Conclusion
1. Volume, Variety
2. Operating Hours
3. Innovation
In Tandem With
Affordability and Delivery
BSB Market Share
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QUESTIONS?
?Wed tell you a pizza joke, but it would be too cheesy.
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