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

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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

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Question 1

Does BSB, Inc., enjoy any competitive advantages or core

competencies?

By Mirza Zia

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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%

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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.

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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.