OPERATION MANAGEMENT

Operation Management - Individual Assignment

[Name of the Institute]

Executive Summary

Management of operations has become crucially important for organizations in the constantly changing market landscape. Starbucks is among the organizations that have continuously faced strategic and operational issues within the coffee industry. The purpose of this assignment was to evaluate the management issues faced by Starbucks. Interviews were conducted to gather relevant information regarding the issues faced by Starbucks in the coffee industry.

Starbucks has become leading coffee retail organization within two decades. Despite being the market leader, Starbucks faces several strategic and operational issues from time to time. Some of the most crucial strategic issues include; expansion/growth, innovation in terms of products/services, collaboration/partnership, corporate social responsibility, inflation and rising prices, and the red ocean. On the other hand, the operational issues that have frequently troubled Starbucks include; self-cannibalisation, location selection, lean management, quality management etc.

It has become vitally important for Starbucks to take advantage of its market leadership. In addition, Starbucks must work towards employee satisfaction and motivation to enhance its quality of services offered to the customers. Similarly, the reliance on the home market should be significantly reduced by tapping into international markets. This will eventually present Starbucks with an opportunity to take optimum advantage of its market penetration.

Research Methodology4

Introduction4

Starbucks5

Analysis of Strategic and Operational Issues7

Strategic Issues7

Expansion/Growth8

Innovation - Products/Services8

Collaboration/Partnership9

Corporate Social Responsibility9

Inflation and Rising Prices9

Dependence upon a Single Market10

Red Ocean10

Operational Issues11

Location Selection11

Lean Management11

Cannibalization12

Quality Management12

Findings and Conclusion13

Expansion into Untapped Market (Blue Ocean)13

Eco-friendly Products14

Closing Stores from United States15

Lean Management15

Collaboration/Partnership16

Product/Service Innovation16

Training and Development17

Recommendations17

First-mover Advantage17

Employee Satisfaction18

Over Reliance on Home-market18

Quality Improvement18

Increase International Expansion19

References20

Operation Management

Research Methodology

Research methodology is often defined as a systematic and logical way of evaluating and assessing problems. This is done basically to solve problems. In simpler word, research methodology is a way through research problem is solved. By taking the definition of research methodology into account, this research tends to highlight the strategic and operational issues faced by Starbucks in the coffee retail business.

Interviews were conducted to gain relevant insights regarding the operational and strategic issues faced by the organization in the local and international coffee industry. The interview was conducted from managers, employees and customers of Starbucks. The relevant insight from the respondents helped in evaluating the market leadership position in the industry. In addition, the interviews also provided significant information regarding how Starbucks became the market leader within just two decades of operations.

Introduction

Operation management is often defined as the art and science of managing a set of activities that help in transforming inputs into output. This means that operation management is a dynamic process that transforms raw material into finished products and services that ultimately creates value for customers in the local and international market. Operation management is also defined as the optimum utilisation of resources for the production of goods and services to the designated market (Slack, N. et al. 2007).

Figure 1: The basic Operation Management

The definition suggests that meeting customer's requirements is the principal objective of operation management. To satisfy the customers in terms of cost and time, operation management ...