A Critical Analysis on Wal-Marts Failure in Germany Essay Example for Free

A Critical Analysis on Wal-Marts Failure in Germany Essay After eight unprofitable years, Wal-Mart backed out of Germany in July 2006 and sold the entire retails outlets to Metro AG. After dominating the US market for quite a long time, Wal-Mart expanded its market to Germany in 1997. In 1997 Wal-Mart continued its strategy of globalization, and acquired two German retail chains for $1. 6 billion. After eight unprofitable years, Wal-Mart backed out of Germany in July 2006 and sold the entire retails outlets to Metro AG. The Essay examines why Wall-mart was a big failure in its international operations in Germany on a Cross-culture perspective. Inadaptability and ignorance f local culture can become a big problem in global business, even for a Corporate giant like Wal-Mart with proven success formulas. Being number one in the United States does not always guarantee for being number one elsewhere in the world. It is very important to understand the pulse of the local market and culture of the clients exactly and should make strategies accordingly and exactly that is where Wal-Mart went wrong in Germany. COMPANY PROFILE Wal-Mart Stores, Inc. s the largest retailer in the world, the worlds second-largest operates retail stores in various retailing formats in all 50 states in the United States. The Companys mass merchandising operations serve its customers primarily through the operation of three segments. The Wal-Mart Stores segment includes its discount stores, Supercenters, and Neighborhood Markets in the United States. The Sams club segment includes the warehouse membership clubs in the United States. The Companys subsidiar y, McLane Company, Inc. rovides products and distribution services to retail industry and institutional foodservice customers. Wal-Mart serves customers and members more than 200 million times per week at more than 8,416 retail units under 53 different banners in 15 countries. With fiscal year 2010 sales of $405 billion, Wal-Mart employs more than 2. 1 million associates worldwide. Nearly 75% of its stores are in the United States (Wal-Mart International Operations, 2004), but Wal-Mart is expanding internationally. The Group is engaged in the operations of retail stores located in all 50 states of the United States, Argentina, Brazil, Canada, Japan, Puerto Rico and the United Kingdom, Central America, Chile, Mexico,lndia and China Wal-Marts entry and operation in Germany Wal-Marts initial entry into German market was through the acquisitions of renowned 21 store Wertkauf chain for an estimated $1. 4 billion in December 1997. 1t was followed one year later by the acquisition of In-terspars 74 hypermarkets from Spar Handels AG, the German unit of the French Intermarch © Group , for ‚ ¬560 million. Thus Wal-Mart immediately became the countrys fourth biggest operator of hypermarkets. However, with a turnover of around ‚ ¬2. 9 billion, and a stagnating market share of Just 1. 1 per cent, the US giant still was a negligible one in the German retail market. Even worse, with estimated accumulated losses of more than ‚ ¬ 1 billion, it is literally drowning in red ink although, according to Wal-Mart Germanys CEO, Kay Hafner, its non food assortment, which accounts for around 50 per cent of its revenues, is profitable.. Instead of expanding its network of stores by 50 units by early 2001 , as originally planned, the company has been forced to close two big outlets, while at the same time it was only able to fully remodel three locations into its flagship Super center format. Due to its problems the company also had to lay off around 1. 000 staff. On July 2006,Wal-Mart announced its official defeat in Germany and would sell its 85 German stores to the rival supermarket chain Metro and would ook a pre-tax loss of about $1 billion (E536million) on the failed venture. A Critical Analysis of Reasons for Wal-Marts failure in Germany: There were several factors that contributed to Germanys unsuccessful business ride. Amazing management blunders have plagued Wal-Marts German operation from the very start.. Wal-Marts major mistakes on the German market may be summarized as follows. Cultural Insensitivity was the major reason of failure Entry to German market by acquisition strategy, Failure to deliver on its legendary every-day low prices and excellent service alue proposition. ? Bad Publicity about the company due to breaking of some prevailing German law In January 1997, Wal-Mart had first entry in Europe market with the acquisition of Wertkauf hypermarkets in Germany. Later in that year, Wal-Mart also acquired Interspar, another German hypermarket chain.. While its first move the 1997 takeover of the 21 Wertkaufstores was indeed a shrewd one, given that companys excellent earnings, its competitive locations, and its very capable management. Wal- Marts 1998 follow-updeal with Spar for 74 hypermarkets was widely Judged an ill- nformed, ill-advised act, for several reasons: Spar is considered to be the weakest player on the German market due to its mostly run-down stores, very heterogeneous in size and format, with the majority of them located in less well-off inner-city residential areas. Wal-Marts cultural insensitivity led to its failure in Germany. This Study focuses only on the flaws made by the Wal-Mart in its International operations in Germany from a Cross-cultural Managements perspective. Wal-Marts failure in Germany- A Case of cultural insensitivity: Most of the Global mergers and acquisitions failed to produce any benefit for the shareholders or educed value, which was mainly due to the lack of intercultural competence. Lack of sensitivity and understanding of language barriers, local traditions, consumer behavior, merchandising, and employment practices irreversibly damaged Wal-Marts image in Germany. One of the main reasons that failed Wal-Mart in Germany is when it attempted to transport the companys unique culture and retailing concept to the new country. The top management refused to even acknowledge the differences in customer behavior and culture in Germany when compared to its US customers, and the top management failed to listen to the feedback from its employees. Not every new cross- border retailer can be a retail giant outer its home. The mistake of exporting its culture wholesale, rather than adapting to local market, leads Wal-Mart failed in Germany market. Wal-Marts ambitions to position itself profitably in European markets through Germany have been hit badly by their inability to fully understand and to adapt to the specific conditions of doing business in other countries. This exposed their obvious lack of intercultural competence and management skills. The main challenge of post-merger integration is further complicated significantly if it is in a Cross- order Merger or acquisition, with all issues frequently being compounded by a lack of language and culture bridging skills. Failure to accomplish this task satisfactorily, results in mutual distrust, de-motivation and negatively impacts the merged companies competitiveness, profits and shareholder value. This is exactly what happened to Wal-Mart Germany. Following are the main two factors that Contributed to the Wal-Marts unsuccessful efforts in Germany: 1)Specific Difference in German Consumer behavior and Culture in comparison with US consumers: and impose an American boss on its German operations. Wal-Mart stores are esigned for customers who are willing to spend lot of time shopping. But in Germany, the shopping hours are shorter: Shops close by 5 PM on weekdays, and no shopping on Sundays. This meant that customers dont have the habit of spending lots of time in a store wandering around for the things they need. Coupled with this problem, German customers do not like to be assisted by Wal-Marts friendly store assistants. Germans prefer to do their own search for bargains. Instead of understanding and adjusting to the culture of its clients, Wal-Mart tried to impose their Culture on to the Customers, which never worked out. Germans like to see the advertised discount products upfront without having to ask the store assistant. This implies that the discount products must be placed at the eye level. Instead Wal-Mart chose to use its US style merchandise display strategy where premium priced products are kept at eye level and discount products are kept at higher shelf or in the bottom racks. This irritated the German shoppers. Wal-Mart also got its store inventory wrong, Wal-Mart stocked its store with clothes, hardware, electronics and other non-food products were given much bigger floor space than ood products, as a result more than 50% of the revenue was from non-food products. But other German retailers stock more of food products. For example for Metro, food products constitute more than 75% of the revenue. Germans prefer to bag groceries themselves into reusable carriers, or at least to pay a small fee for the avoidable sin of needing a plastic bag. Germans are introvert in nature and doesnt like display of emotion in public, as they always care for their private personal space. Employees, like the reserved customers, didnt care for Wal-Marts public displays of corporate moral such as the morning heer. The German Customers even didnt liked to be accompanied by the Cheerful employees either, as they would like to make choices by themselves. These are cultural misunderstandings as well, but one could say the cultural philosophy of Wal- Mart could not survive in the context of a German culture with a Happy Planet Index significantly higher than Americas 2)lnefficient Top Management which ignored the relevance of local Culture: It was clear that the cultural insensitivity of Wal-Mart started right at the top management. To begin with, it appointed four CEOs during its first four years of peration. The first head of German operations was Rob Tiarks ,an expat from the USA who did not understand Germany or its culture. He had previously supervised around 200 Supercenters in America. Not only did he not speak any German. Due to his unwillingness to learn the language ,English was soon decreed as the official company language at the management level. He also ignores the complexities and the legal framework of the German retail market, ignoring any strategic advice presented to him by former Wertkauf executives . This has resulted in the resignation nsuccessful in integrating German Outlets with the Wal-Marts Business model and culture. Suggestions and Recommendations: Cross-border, Cross-cultural business is a challenge even for the biggest companies. Companies have to be sensitive to the local cultures and tailor their offerings to local market. To localize their offerings, Wal-Mart and other Companies that are going global companies must carry out cultural assessment of the Citizens of the Country before acquisitions. All their Corporate Business and Communication strategies should be based on this cultural assessment. This will help companies measure the ffectiveness of its localization efforts and make adequate changes in local strategy ; tactics as and when required. Considering the following steps would help Wal-Mart or any other Company while they are on lookout of Global alliance or business. 1)Political, Social, Economic and Cultural Analysis of the Country Before expanding its business operations to a new country, the Company should understand the Political, Social, Economic and cultural aspects of the Country in depth. Wal-Marts case, Germany was selected primarily because of a central European location and economic attractiveness of the Wertkauf acquisition. But a serious research would have shown that Germany had strong national values resistant to change; possibly the most deeply rooted retail traditions in Western Europe. This could have avoided either Wal-Marts selection of the Country or the strategies it has adopted in Germany. 2)Go global and think they are local After conducting an in depth research about the prevailing trends in the customers Country, the Company should be ready to modify its own identity to suit itself to the cultural differences without compromising much on its Corporate Mission. This step will also force organizations to clearly define globalization goals. Wal-Mart put the company name on many German stores before being fully established. Immediately, the run down stores left an impression on consumers who formed a negative image of the Wal-Mart name. 3)Employment of Cross-cultural Management approaches like Hampden-Turner and Trompanaars Analysis: Employement of Hofsteds Culture Dimensions or HT;T Analysis will help Companies in understanding the minute cultural differences between the countries. For example, Communitarianism over Individualism Germans degree of communitarianism is on the higher side mainly because Germans prefer participating on a team. Most Germans see business as a group of related persons working together. But, most of Americans see their company as a set of difference in Cultural dimensions between the 2 countries has resulted in inside management conflict among the employees, which also resulted in resignation of efficient German executives from Wal-Mart post integration. Understanding the cultural dimensions of a Country through proven Cross-culture models will always help a company to formulate a specific approach that will encourage team spirit and joy among the Global Team. 4)Continuous Updation of Strategies to successfully ithstand the local competition It is very important for a Global firm to continuously analyse the impact of their various strategies on the local market. Understand the shortfalls, and modify it in such a way as to cater the local market in a much better way than the competitors. It is always better to scrutinize the strategies adopted by them with a panel of Local experts, as they will be having a better picture about the local consuming behavior and culture. Perceptions do matter a lot, So a surveys to find the customers perception about the company will also help them to change their trategies accordingly. Conclusion: Even though Wall-Mart was the Biggest of the companies, while going Global understanding the culture of customers, employees of the new Country is very critical for the success. The achievement in the U. S. market cannot always guarantee that Wal-Mart will also success in anywhere else. Companies need to understand the local culture in order to capitalize on the local market. The lessons learned from Wal- Marts experience in Germany, can be applied by other retailers who are planning to go global for expanding its market.. If the worlds largest retailer had taken the time o analyze the German mindset, it could have avoided a very painful lesson when Germans rejected Wal-Marts American-style which was highly successful in home country.

Managing Service Operations

Managing Service Operations Raised in Tokyo, Hiroaki Aoki managed to launch his first business in the United States. Taking advantage of his origin, he opened a Chinese-Japanese cuisine restaurant offering a unique experience to its customers. The food process was transformed to an exceptional food experience and with the opening of a chain of in total 15 restaurants Hiroaki Aoki proved to be a pioneer in the restaurant industry. The way he managed to succeed this, was through revolutionary moves regarding restaurants environment, financial operations and service structure. By decorating his restaurant with Japanese elements and employing Japanese chefs as showmen, the perception of dining at Benihana changed. This new perspective was further supported by reducing the kitchen-room as to have more space for tables and fully adapt the Japanese philosophy as well as creating an unparalleled image for his business. Due to the uniqueness of the Benihana restaurants, franchise as a growth strategy brought upon many problems: starting from a lack of communication between managers and the Japanese speaking personnel, to inexperienced managers in franchised businesses abroad. This led Hiroaki Aoki to reconsider his options and deciding to expand through other models (joint-venture and hotel-corporation) and in other areas of food industry (retail and quick service food sector). Whether this is a sustainable move or not will be identified within this report. Benihanas concept is based on an authentic Japanese atmosphere. The use of American food favourites (chicken, steak, etc.) combined with the hibatchi method of presentation makes this restaurant very different from others (Sasser, 2004). Glushko and Tabas (2008) state that service management and design success depend on the interaction between employees and customers. Thus the quality of the service experience relies on the front stage activities displayed in a restaurant. Furthermore, Frei (2006) adds that the line of visibility is the factor that separates the front stage and the back stage (Appendix 3). If Benihana was to compare with a McDonalds and a Gourmet Restaurant the service encounters would be very different (Appendix 4) (Frei, 2006). In the case of McDonalds the line of visibility for the front-stage is very small and depends on waiting lines and self-service, whereas all the production lines occur in the back stage, thus the customers experience is very limited (ibid.). A customers experience in a gourmet restaurant has a balance between the front-stage, dining room experience, and the kitchen-backstage-area (ibid.). Compared to both of these, Benihana enhances the experience of their customers by treating the chef as a showman and having a different production line to service (ibid.). The front stage is the largest part of the operations with the chef cooking and serving the dishes together with the waiter, whereas the kitchen preparation is a very small part of their process (Sasser, 2004). This different concept increases customer satisfaction: 9 As seen in Figure 2, customer satisfaction is rated as excellent, which implies that the Benihana service concept is successful. In order to further develop this aspect of their business, Benihana also developed several other concepts in relation to their design, their bar and their customer batching in groups, which will be further discussed in Chapter 3.2.2 Benihanas Restaurant Design. 10 Benihana created a concept that includes food, atmosphere, entertainment and hospitality, while trying to be consistent, with their Japanese heritage. Furthermore, the owner is planning expansion steps to appeal to a wider range of clientele. However, Hiroaki Aoki has two major concerns. The first issue is how to sustainably expand and upgrade his product and services to cater a wider range of audience, while keeping the quality and the Japanese traditional atmosphere. The second issue is how to define what Benihana is selling. Data Analysis Benihanas Strategy Considering the growth of Benihana from a humble 40-seat unit to a chain of 15 units across the country, Hiroaki Aoki had a very successful strategic planning behind the concept of his restaurant (Figure 1) (Sasser, 2004). Strategic planning can be defined as an organizational process of allocating its resources in order to pursue a strategy that includes its capital, employees and most important its clients (Haines Schmidt, 2005). The owner, Rocky, approached a combination of inputs (operations), customers satisfaction and outcomes (financial results) in order to provide a new idea behind the strategy of a normal restaurant, maximizing its strengths and diminishing its weaknesses (Appendix 2) (Heskett, Sasser Schlesinger, 1997). Figure 1 : Benihana Strategic Planning Note: Adapted from Heskett, Sasser Schlesinger, 1997 Benihanas strategic planning took into consideration five important aspects: Construction, Finance, Marketing, Human Resources and Operations (Heskett, Sasser Schlesinger, 1997). They provide the framework for understanding how the firms operational investment is translated into its profit. Furthermore, Benihanas concept and cost-structure will be presented in relation to this model in order to understand the true authenticity behind this different restaurant management approach. Benihanas Concept Benihanas concept is based on an authentic Japanese atmosphere. The use of American food favourites (chicken, steak, etc.) combined with the hibatchi method of presentation makes this restaurant very different from others (Sasser, 2004). Glushko and Tabas (2008) state that service management and design success depend on the interaction between employees and customers. Thus the quality of the service experience relies on the front stage activities displayed in a restaurant. Furthermore, Frei (2006) adds that the line of visibility is the factor that separates the front stage and the back stage (Appendix 3). If Benihana was to compare with a McDonalds and a Gourmet Restaurant the service encounters would be very different (Appendix 4) (Frei, 2006). In the case of McDonalds the line of visibility for the front-stage is very small and depends on waiting lines and self-service, whereas all the production lines occur in the back stage, thus the customers experience is very limited (ibid.). A customers experience in a gourmet restaurant has a balance between the front-stage, dining room experience, and the kitchen-backstage-area (ibid.). Compared to both of these, Benihana enhances the experience of their customers by treating the chef as a showman and having a different production line to service (ibid.). The front stage is the largest part of the operations with the chef cooking and serving the dishes together with the waiter, whereas the kitchen preparation is a very small part of their process (Sasser, 2004). This different concept increases customer satisfaction: Figure 2 : Customer Satisfaction Note: Own design according to Exhibit 4, Sasser, 2004 As seen in Figure 2, customer satisfaction is rated as excellent, which implies that the Benihana service concept is successful. In order to further develop this aspect of their business, Benihana also developed several other concepts in relation to their design, their bar and their customer batching in groups, which will be further discussed in Chapter 3.2.2 Benihanas Restaurant Design. Benihanas Cost Structure In terms of Benihanas cost arrangement the owner implemented a strategic cost structure to the business by lowering the cost of labour and food and beverage. The cooking labour is cost efficient due to the cost reduction that was done through their chefs; they did not only prepare the food, but also served it (Sasser, 2004). With concerns to the food and beverage costs, due to their limited menu, inventory reduction also occurred (ibid.). Taking into account all the mentioned measures, the results have a direct impact on the financial statement of the restaurant. Figure 3: Benihana ´s Partial Income Statement Note: Sasser, 2004; Bank of America, 1968 As seen in Figure 3, Benihana ´s Earnings Before Income Tax and Depreciation (EBITDA) is on average between 15 and 35% higher than ones of a typical service restaurant (Sasser, 2004). It is observed that there are two factors, which increase profitability: lower food and beverage cost (limited menu, fewer inventories) as well as lower labour cost. The lower labour cost is the influential reason behind this high difference in marginal profit. Analyzing the employee that plays the most important role in the restaurant, the Benihana chef, an employee profile was created (Appendix 5). PayScale (2010) provides an immediate accurate snapshot of the job market and gives facts of employees salary data in the world. Thus it was used as a source to calculate the annual average salaries of the food and beverage segment as well as the job specification of a chef in 1964 (Appendix 6) (ibid.). The average annual salary of a Benihana chef can be analyzed through the figure below. Figure 4 : Benihana ´s Chef Annual Average Salaries 1964 Note: PayScale, 2010 It can be noticed that the Benihana master-chefs have a slightly above average income compared to the market. As the success and the reputation of the restaurant depend on these employees, it is very important to keep them motivated and this further demonstrates that the owner, Rocky, also has a human resources operation strategic planning as seen in Figure 1. Benihanas Restaurant Capacity Managers are continuously challenged with balancing customer demand and service capacity (Klassen Rohleder, 2002). The capacity of a business can be seen as their ability to meet the demand; for the production of goods this can be easily done, but for services it is very difficult as four critical factors have to be taken into account: time, labour, infrastructure and equipment (ibid.). Thus capacity has to be planned ahead in order to achieve cost effectiveness and the customer satisfaction. In the case of Benihana, an estimation of the maximum demand rate for an evening dinner period was calculated in order to foresee the capacity to sustain it: Figure 5: Benihana ´s Capacity vs. Demand Rate Note: Own design; Sasser, 2004 It can be noted from Figure 5 that in a case of maximum demand rate, Benihanas capacity will not be able to fit 360 clients in one night. Although the restaurant has already a limited menu, Benihana also took into consideration a decrease in dining time. The chefs also plays an important part by offering the guests the ultimate gastronomic experience and politely annoucing them that their dinner is over by bowing at the end of the meal-presentation (Sasser, 2004). Benihanas Production Process System Before a company can actually decide on which customer target market it will serve, it has to define its value proposition and its position in the market (Kotler Armstrong, 2010). The positioning of a company is defined as a consumer`s appreciation of the product compared to competing products (ibid.). As one can see in Appendix 7, Benihana has a high customer value and a differentiated position in the market. Hiroaki Aoki achieved this position, through an unprecedented service experience and design (Sasser, 2004), which will be highlighted in the following chapter. Benihana`s Service Design Every service idea starts with a service concept, where the purpose, target market and the customer experience are defined (Russell Taylor, 2009). By opening an authenticable Japanese restaurant in the United States, Hiroaki Aoki focused on two main criteria, Americans enjoy when they are going out for dinner: an exotic surrounding and a place where they can watch the preparation of their food (Sasser, 2004). Referring to the previous chapter, out of this observation, he created a completely new service concept: the Benihana dining concept, where the food is prepared by professional chefs on hibachi tables right in front of the guests. This newly developed concept was both, revenue- and cost-effective (Heskett, Sasser Schlesinger, 1997). A service package is a mixture of physical items, sensual benefits, and psychological benefits (Russell Taylor, 2009). The specialty of a Benihana restaurant is their design according to historical authenticity. All the physical items (walls, ceilings, lights, etc.) are from Japan and the materials are originally shipped to the United States (Sasser, 2004). Sensual benefits are supported by the highly trained native Japanese chefs whose form of cooking is mainly showmanship (ibid.). The psychological benefits in a Benihana restaurant are the exotic surroundings and authenticity of the place. The combination of all three components concludes in an effective service design (Russell Taylor, 2009). Therefore, the connection is presented in the service design process: Figure 6: The Service Design Process Note: Adapted from Russell Taylor, 2009 Derived from the service package, specifications for performance, design and delivery are specified. Based on the customer expectations (exotic surrounding), the design (original materials from Japan) and delivery (downtown Manhattan) are created (Russell Taylor, 2009). Benihana`s Restaurant Design The design of a typical Benihana restaurant is created to increase efficiency and profitability. A typical Benihana restaurant design, which presents the floor plan of the Benihana West restaurant on West 56th Street in Manhattan (Sasser, 2004), is shown in Figure 7. It is comprised of 112 to 120 seats in the dining area as well as 55 to 60 seats in the cocktail lounge and the typical operation has between 5,000 and 6,000 square feet (ibid.). Figure 7: A typical Benihana Floor Plan Note: Sasser, 2004 Once guests enter the restaurant, they first pass the cocktail lounge. The bar in the first Benihana restaurant only seated eight guests as the design was concentrated on food-service sales (Sasser, 2004). Along the openings of new restaurants, the founder realized, that the small space was insufficient and enlarged the bar space with every opening. He found out, that in peak times, the bar is well used as a buffer and therefore increases the beverage sales (ibid.). When all the 14 tables in the dining area are occupied, the guests are waiting here for an aperitif, until there are seats available. In the bar, the guests are batched in groups of 8 and are leaded to the dining area. The main attractions in the dining area are the teppanyaki tables, which cover eight diners per table and are served by one chef and a waitress (Sasser, 2004). Due to the hibachi tables, the conventional back-stage kitchen can be reduced as the cooking itself takes place front-stage at the customer`s table. This leads to shorter serving distances and one team of chef and waitress can handle two tables at once. The arrangement of the tables (see also Figure 6), also results in lower cost of labour (Sasser, 2004). Examination of the Production System The design of the production process comes along with the design of the restaurant space. The whole production line moves towards the service of the customer. It starts in the bar, where the guests are grouped together in batches of eight before having their dinner (Verweire Van den Berghe, 2005). It has to be taken into consideration that the combination of batches is satisfactory for smaller groups arriving, since they do not know each other (Appendix 8). This batch concept leads to higher beverage sales and allows using the whole provided capacity in the restaurant. According to Russell and Taylor (2009) design simplification reduces the number of parts, subassemblies, and options in a product. Benihana`s menu consists of four main food items (filet mignon, steak, chicken and shrimp) accompanied by unvaried side dishes (zucchini, onions, bean sprouts, fresh mushrooms and rice), which can be combined as entrees or main dishes (Sasser, 2004). As seen in Figure 4 this standardization of ingredients cuts the food costs down to 30-35% of food sales and leaves nearly no waste (Sasser, 2004; Russell Taylor, 2009). This also minimizes the space for food storage, which results in less space in the back stage of the restaurant. Since services are defined as front-stage activities, the dining room of a restaurant is the service part, whereas the kitchen is classified as the production part (Teboul, 2006). Through the preparation of the meal in front of the customer, not only the service experience is greater, but also a conventional kitchen is not necessary anymore. This enlarges the productive dining area and reduces the back area (preparation areas, dressing rooms, storage and office space) of about 22% of the total space (Sasser, 2004). According to Verma and Boyer (2010), the aim of successful process design is to maximize the output. To identify possible limitations, a bottleneck analysis is helpful. A bottleneck in a process is the step with the slowest cycle time in a given process (Verma Boyer, 2010) and verifies the process productivity. Figure 8: Process Flow Diagram of the first Benihana Restaurant in Manhattan, 1964 Note: Adapted from Verma Boyer, 2010 While analyzing the process flow diagram (Figure 8) of a Benihana restaurant, one can see that the bottleneck hereby is the dining time of 60 minutes. This bottleneck determines the pace of the whole system even though the waiting time at the bar in peak times is only 12 minutes (Verma Boyer, 2010). As identified in Chapter 3.1.3, Figure 9 the demand of a Benihana restaurant exceeds capacity. To resolve the problem of the bottle neck, Benihana decreased the dining time and enlarged the bar capacity to cover more waiting customers. Over the years, Benihana first doubled the bar area to 16 seats and eventually reached up to 55-60 seats (Sasser, 2004). Figure 9 shows some scenarios for different bar and dining area arrangements and waiting times. The maximum dining capacity of 120 seats allows a bar capacity of 48 seats (Figure 9). Figure 9 : Scenarios for different Bar and Dining Area Arrangements and Waiting Times Note: Own Calculations Concerns regarding Diversification Plans According to Ansoffs Growth and Expansion Matrix, one can find four different options of development: market development, diversification, market penetration and product development (Campbell Craig, 2005). Benihana took into consideration the following strategies: Figure 10 : Expansion Plan of Benihana Note: Adapted from Campbell Craig, 2005 The first one, market development (1), is the growth of an existing product into new market sectors (Campbell Craig, 2005). Regarding their diversification plans, Benihanas attempt is to expand in other countries where they have to take into consideration the customs of each nation, its rules and regulations. The same principles cannot be applied for all regions, so in order to develop successfully the restaurant chain these concerns should be well evaluated. Furthermore, it is very difficult for the company to be franchised, since not all owners have previous experience in the restaurant business (Sasser, 2004). Communication with the staff is also very difficult, since the majority is Japanese. Moreover, it is very demanding to supervise and keep control of what is happening in restaurants around the world. Hence, Rocky decided for the near future, instead of attempting to franchise his restaurant business, to move either into a joint-venture or into hotel-corporations and expand in two areas: Japan and overseas (ibid.). Diversification (2) is known as an approach of involving new products in new markets (Campbell Craig, 2005). Rocky also decided to widen his business into other fields connected to the food industry. A first attempt in the retail production and selling is under discussion. Entering the retail-sale-market is time consuming and has high advertising costs, so Benihana should probably re-evaluate their advertisement budget and more likely reduce the promotion funds for the restaurants, which is a risky move (Restaurant Worx, 2010). If someone is not satisfied by the quality of the product he/she will probably create a negative idea about the company and never visit a Benihana restaurant. It is also uncertain how unique the product is or how likely it is for other similar products to be created in the near future (ibid.). Product development (3) is known as increasing the market share by developing new products (Campbell Craig, 2005). In general Benihana restaurants have middle-income customers as its target group (Sassa, 2004). This is linked directly to the quality of the services offered, restaurants atmosphere and prices. Alternatively, they have no young audience in Benihana restaurants. This is one of the reasons why Rocky is considering of opening a quick service restaurant as to be able to satisfy younger crowds needs as well (ibid.). To put this project into action, firstly a market research was made about the restaurant needs of the people, the food that will be provided in these restaurants, deciding on a combination of Asian cuisine Chinese and Japanese and their location. Furthermore, cooperation between Rocky and an oil company will be formed as to provide small gas units to his new restaurants (ibid.). Even though a thorough research was conducted for this expansion a very significan t element was neglected; the culture of the locals. Maybe the proposal of a Chinese-Japanese quick service restaurant was innovative for that time, but not all the neighbourhoods were prepared to welcome that idea (ibid.). The last one, market penetration (4), is known as the use of existing products in existing markets, which are already served (Campbell Craig, 2005). The United States therefore give three areas for growth: primary markets (New York, Los Angeles), secondary markets (Pennsylvania, Harresburg, etc) and Suburbia. Due to the already mentioned inefficient franchise strategy, Benihana will not only expand internationally but also domestically through joint-ventures and hotel-affiliations (Sasser, 2004). Concerns regarding the loss of identity Benihana is selling to its customers a whole new perception of food consumption. Starting its business in 1964 in the U.S., it introduced to the market an innovative procedure of food preparation and presentation to the customers (Sasser, 2004). Instead of cooking the food inside a spacious kitchen, they used more room for the restaurant area as to prepare meals in front of the customers on a teppanyaki table with the hibachi cooking method. Benihana created a culture for the chain based on Japanese cooking method by well trained chefs and Japanese design. The environment of Benihana restaurants decoration and atmosphere is of vast importance for the company, since the philosophy of Benihana is to make people happy through the food experience (Bitner, 1992; Sasser, 2004). However, the environment is important not only for the customers who should feel satisfied, but also for the employees. In turn for the employees to feel motivated and perform their best, their working surrounding s should support their needs, as to be able to enhance companys values to the customers (ibid.). Consequently, Benihana should continue providing such services and facilities to its customers and employees as to sustain the chemistry between them and therefore continue to be a successful company. Presentation of Solution and Recommendations Benihana had a very successful strategy so far due to its construction, finance, marketing, human resources and operations management. They were able to translate market trends into their concepts and adapt them efficiently. Furthermore, they managed to reduce the back stage kitchen area into a front stage environment that displayed cooking and entertaining as one. The concept was so innovative that Rocky was actually able to reduce expenses. According to the diversification plan, Rocky intended to expand his business into more fields of the food industry. To develop his company, he tried to take advantage of the Benihana recognition, as to enter further markets, but on the other hand this step would be risky, because if the new concepts would fail, it could damage Benihanas reputation. Sasser (1976) states, that good planning is the key to successful management of supply and demand in service industries. As discussed in this paper one of the biggest problems that Benihana is facing, is how it will sustainably expand, while keeping their quality and their concept (limited menu, chef as a showman, Japanese atmosphere). Furthermore, as seen in Figure 10, Rocky has made a lot of plans regarding the growth and diversification of the Benihana restaurant. It is recommended that before attempting to implement all his ideas, a development strategic plan should be developed in order to best fit this expansion. Therefore the supply and demand matching concept should be taken into consideration: Figure 11 : Strategies for Matching Supply and Demand for Benihanas services Note: Adapted from Wisner, Leong, Tan, 2005 Lovelock (1994) further states that this can be accomplished through shifting demand to match capacity or adjusting capacity to meet demand (Appendix 9). In order to resolve the second issue, Benihana should focus on selling Japanese food and promoting their philosophy. One of the main key points of Benihanas achievements is the unique food experience it sells to its customers. Therefore, the basic elements of this successful recipe should be included in any other expansion step the company and Rocky decide to take. Without the fear of being imitated, they should take advantage of their uniqueness and develop in other areas of food industry. Through this move they would also be able to focus on other target groups, such as younger audience, which currently are not part of Benihanas targeted clientele. In this way Rocky will be able to launch his restaurant name and not only become a current trend, but also establish his brand in the hospitality industry, by providing Japanese authentic services. Action Plan Evidence Of Success Evaluation Process : Increase in Demand Increase in Profitability Customer Satisfaction Survey Employee Satisfaction Survey References: Benihana (2010). About Benihana. Retrieved 18.09.2010, from: http://www.benihana.com/about Benihana Training Guide (2004). Benihana Training Guide. Al Bustan Rotana Hotel Bitner, M. J. (1992). Servicescapes The Impact of Physical Surroundings on Customers and Employees. Retrieved 18.09.2010, from: http://proquest.umi.com/pqdweb?did=585119 sid=3Fmt=3clientId=45065RQT=309VName=PQDuserid=008BW87KK7passwd=WELCOME Campbell, D.J. Craig, T. (2005). Organisations and the Business Environment. Burlington: Elsevier Butterworth-Heinemann Glushko, R.J. Tabas, L. (2008). Bridging the Front Stage and Back Stage in Service System Design, in: Proceedings of the 41st Hawaii International Conference on System Sciences Big Island, Hawaii: IEEE Computer Society Press, January (2008), p. 106 Frei, F.X. (2006). Breaking the Trade-Off between Efficiency and Service. Boston: Harvard Business Review, Vol. 84, No. 11, page: 93-101 Haines, S.G. Schmidt, T. (2005). ABCs of Strategic Management The Systems Thinking Approach to Creating a Customer-Focused, High Performance, Learning Organization. San Diego: System Thinking Press Heskett, J.L., Sasser, W.E. Schlesinger L.A. (1997). The Service Profit Chain How Leading Companies Lead Profit and Growth to Loyalty, Satisfaction, and Value. New York: The Free Press Ivy Thesis (2010). Executive Summary Benihana International Restaurant. Retrieved 18.09.2010, from: http://ivythesis.typepad.com/term_paper_topics/2009/09/executive-summary-benihana-international-restaurant.html Klassen, K.J. Rohleder, T.R. (2002). Demand and Capacity Management Decisions in Services, How They Impact One Another. Bingley: International Journal of Operations and Production Management, Emerald: Vol. 22, No. 5, p. 527-548 Kotler, Ph. Armstrong, G. (2010). Principles of Marketing. Upper Saddle River: Prentice Hall Lovelock, C. (1994). Getting the Most Out of Your Productive Capacity. Boston: McGraw Hill PayScale (2010). Free Salary Report based on Job Title, Location, Education, Skills and Experience. Retrieved 19.09.2010, from: http://www.payscale.com Restaurant Worx (2010). Restaurant Retail Sales. Retrieved 18.09.2010, from: http://restaurantworx.com/services-2/restaurant-marketing-solutions/restaurant-sales-solutions/retail-sales/ Retail Fix (2010). Features Benihana. Retrieved 19.09.2010, from: http://www.retailfix.com/ featured_benihana.cfm Russell, R.S. Taylor B.W. (2009). Operations Management Along the Supply Chain. Upper Saddle River: John Wiley Sons Sasser, E.W. (2004). Benihana of Tokyo. Boston: Harvard Business School Teboul, J. (2006). Service is Front Stage- Positioning Services for Value Advantage. New York: Palgrave MacMillan Verma, R. Boyer K.K. (2010). Operations Supply Chain Management World Class Theory and Practice. Mason: South-Western Verweire, K. Van den Berghe, L. (2005). Integrated Performance Management- A Guide to Strategy Implementation. London: SAGE Wisner, J.D., Leong, K.G. Tan, K.C. (2005). Principles of Supply Chain Management A Balanced Approach. Mason: South-Western

Im Going to College Essay -- College Admissions Essays

I'm Going to College Neither my grandmother, nor any of my great aunts, went on to college.   It was too expensive for their family.   My great Aunt Nancy, however, did try to take night classes at the University Extension, which was held at her high school.   Unfortunately, she was unable to continue paying for these classes, so she left the University Extension program with only twelve credits earned. Aunt Nancy just continued to work at the job she acquired, right out of high school, and work her way up through the ranks at this job.   There was no push by her parents to continue her education, and therefore, there was no pressure on her to attend college.   Aunt Nancy had once told me, "There is great value in a college education, for career purpose.   It is so necessary now, where as years ago it was not as essential."   She also explained to me that college can help to build better social skills, which will be used in everyday life.   Now that Aunt Nancy is retired, she reads a lot.   When she was younger, her mother only took her to the city library three times a year to get books to read.   So, as a child she did not read as much as she reads now.   While in school, she only preformed the necessary reading and writing that was required.   Now, she reads the newspaper, books, or a magazine almost everyday.   My mother, on the other hand, did attend college.   Actually, she has attended college twice now.   The first time she went, she gained a degree as a Medical Laboratory Technician.   Later in life, she went back to college and attained her accounting degree.   My mother decided that she was not happy as a Medical Technician, so she wanted to go back to school to learn of what fields would interest her... ...of reading to your children.   He explained that as long as you read to your child, or as long as they are reading to themselves, it would increase your child's comprehension skills.   At this point in time, I no longer enjoyed having my mother read to me, but I was reading books to myself so I was still learning and establishing the proper skills gained through reading and writing. Books and an education seem to be important to everyone, no matter how old or young.   I have learned many things both in school and just by reading.   Obviously, books and schooling can have the same effect on others.   College is a time to grow, both intellectually and socially.   I strongly encourage future generations to attend college and get a good education throughout life.   It will prove to be extremely beneficial, and you will learn a lot about yourself in the process.

Urban Survey of Vancouver :: miscellaneous

Urban Survey of Vancouver I live in downtown. It is the heart of the Vancouver. It’s always busy and there are a lot of people on the streets most of the time. I believe that in my area everywhere you look you can see elements that identify that this is urban and is a part of Vancouver. The most obvious elements in downtown is of course would the high buildings. These are mostly the offices of the companies that may base in British Columbia, but also outside the British Columbia’s boundaries. These building are usually tall building, some of them have the logo of the company or companies on top of the front entrance or on the top of the building. Basically, all we can see, without going inside is that men and women go in there in suits, but we know that is where the business is handled. The usual work hours for offices from 9 am to 6 pm. I think another element would be the shopping malls and the large number of stores in Downtown area. There is a large variety of stores, no matter what you are looking for you will find it here for sure. Everything that people require to satisfy themselves, starting from clothes and ending with food. This show that this branch of the city is an important urban part. Almost every single building in downtown area is unique and because this part of the city is one the tourist attractions, the architecture of structures here is at different level than the rest of the city. There is a saying – â€Å"All roads lead to Rome†. In this case all roads lead to downtown Vancouver, for example: sea bus, B-line buses, sky-train. The great transportation routes are all somehow connecting to downtown. From downtown you can get anywhere in the Vancouver area and even further. I would also like to look at the chains of stores and other service providing places, for example Safeway, London drugs, 7-Eleven etc. These companies are very rich and they have a lot of locations. They usually sell only the â€Å"necessary† and expensive stuff. The stores usually sell junk food, and it really hard to find something healthy, but if you do, you will see do that the prices are very high. Another good example would definitely be fast food restaurant or coffee shops. I think that McDonald’s and Starbucks coffee are the leaders of in their field and they have a location on every corner in Downtown.

Deconstruction of Thank You, Ma’am :: Thank You, Ma’am

Deconstruction of Thank You, Ma’am    There are a million acts of kindness each day.   Some young man gives a stranger a compliment, or a teacher brightens a students morning.   But, in the world we live in today, these acts are rare to come by.   In this short story Thank You, Ma’am, the boy, out of mysterious luck, gets taken in by the woman whom he was trying to steal a purse from.   Her actions, following the incident towards the boy, may have seemed very kind and understanding, but the boy needs a more solid way of punishment.   He requires discipline that will show him that as complicated as life is, there will not always be someone for you to lean and depend on.   Ã‚  Ã‚   The first and most foremost thing that would come to mind when reading this story is how caring Mrs. Luella Bates Washington Jones was, that she took in the boy and nurtured him; she tried to teach him between right and wrong.   She gave him food, a nice conversation, and even a chance of escape, which he chose not to take, but these methods are still an immoral way of handling the situation.   If a boy were to come up to an everyday woman on the streets, that victim would not be as sensitive as Mrs. Jones was to the boy she caught.   To teach a young man that if you steal and you are going to get special treatment is not an effective method of punishment.   Ã‚  Ã‚   First of all, the boy told Mrs. Jones that he tried to steal her purse for one reason, to buy blue suede shoes for himself.   She then replies, â€Å"Well you didn’t have to snatch my pocketbook to get some blue suede shoes... You could have just asked me.†Ã‚   There are many faulty choices of judgments made in this comment, mainly because the outcome of the situation would almost never happen in the real world.   The boy will now, after being told he should just ask for the shoes, believe that anything he ever wants will come to his possession if would just ask.   To â€Å"trick† a child into being convinced that if you just ask a woman for money or anything that she will give it to you is morally wrong, and it is not fair for the boy to go through life having and accepting this state of mind.

Postmodernism & history Essay

Postmodernism refers to a shift in the non art components of history, particularly after the 1960s. It is marked by developments in culture, society and the economy. One drawback to postmodernism is the idea that it is concrete. Instead, postmodern society continues to go through enormous change that can be contributed to ever changing aspects of culture, society and the economy. Modernism preceded postmodernism which suggests that postmodernism is a reaction to modernism or postmodernism evolved from modernism and continues to undergo changes today (Taylor &Winquist, 2001). Further, as postmodernism has gone through these many changes; it has become an extremely broad term for other philosophical disciplines that have been created. Another drawback to postmodernism comes from Michael Foucault who believed that postmodernism has caused science to become more political in nature (Schillo & Thompson, 2003). The drawback to science is that certain people who oppose scientific research associated with controversial issues such as cloning and genetically modified organisms are only against scientific progress because it serves some political agenda (Schillo & Thompson, 2003). This is a drawback to postmodernism because politics get in the way of important scientific research that has potential to greatly improve the lives of humans. Finally, postmodernism includes a complex style of writing that makes drawing useful conclusions challenging (Constas, 1998). This complexity often causes difficulty internalizing postmodern theories and ideas because they are hard to understand. It also causes a challenge to those who conduct educational research in order to educate others about postmodernism (Constas, 1998). Therefore, it can be determined that postmodernism causes a lack of communication among the educational community (Constas, 1998). These leads to another drawback which is the additional training educators must receive simply to understand postmodernism and its complex theories. Constas, Mark A. (1998). Research news and comment: the changing nature of educational research and a critique of postmodernism. Educational Researcher, 27 (2): 26 – 33. Schillo, K. K. & Thompson, P. B. (2003). Postmodernism for animal scientists. Journal of Animal Science, 81 (12): 2989 – 2998. Taylor, V. E. & Winquist, C. E. (2001). Encyclopedia of Postmodernism. London and New York: Routledge.

7 main approaches in psychology Essay

*Many psychologists may believe that each perspective has valid explanations depending on the specific situation, and this point of view is called eclectic. This term refers to the claim that no one perspective has all the answers to the variety of human thought and behavior. Psychologists tend to use various perspectives in their work depending on which point of view fits best with the explanation. Humanistic (1950s-Present) Carl Rogers-Person-centered therapy and unconditional positive regard Abraham Maslow-Hierarchy of Needs and Self-Actualization Unique aspects of human experience Belief that we choose most of our behaviors and these choices are guided by physiological, emotional or spiritual needs. Humans are free, rational beings with the potential for personal growth, and they are fundamentally different from animals. Psychoanalytic/Psychodynamic (1900-Present) Sigmund Freud-Personality and States of Consciousness Carl Jung-the most important and lifelong task imposed upon any person is fulfillment through the process of individuation, achievement of harmony of conscious and unconscious, which makes a person one and whole Alfred Adler-â€Å"IndividualPPsychology,† a term which is sometimes misunderstood. It refers to the indivisibility of the personality in its psychological structure. Unconscious determinants of behavior Belief that the unconscious mind—a part of our mind that we do not have conscious control over or access to—controls much of our thought and action. Unconscious motives and experiences in early childhood govern personality and mental disorders.  Roger Sperry-showed that if the two hemispheres of the brain are separated by severing the corpus callosum (the large band of fibers that connects them), the transfer of information between the hemispheres ceases, and the coexistence in the same individual of two functionally different brains can be demonstrated. George Miller-The Magical Number Seven, Plus or Minus Two: Some Limits on our Capacity for Processing Information Physiological bases of behavior in humans and animals An organism’s functioning can be explained in terms of the bodily structures and biochemical processes that underlie behavior. How the body and brain enable emotions, memories, and sensory experiences Evolutionary/Darwinian (Also called sociobiologists) (1980s-Present) David Buss-His primary interests include the evolutionary psychology of human mating strategies; conflict between the sexes; prestige, status, and social reputation; the emotion of jealousy; homicide; anti-homicide defenses; and stalking. Charles Darwin-the Origin of Species in 1850. Evolutionary bases of behavior in humans and animals. Examines human thought and behavior in terms of natural selection. Behavior patterns have evolved to solve adaptive problems; natural selection favors behaviors that enhance reproductive success. B.F. Skinner-Operant Conditioning and invented the Skinner Box Effects of environment on the overt behavior of human and animals. Explain human thought and behavior in terms of conditioning and look strictly at observable behaviors and what reaction organisms get in response to specific behaviors. Belief that only observable events (stimulus response relationships) can be studied scientifically.  Noam Chomsky-Theorized the critical-period for language acquisition Herbert Simon-one of the founding fathers of modern research in artificial intelligence Ulric Neisser-focused on pattern recognition, visual search, brief information processing, and memory. Thoughts; mental process Examine human thought and behavior in terms of how we interpret, process, and remember environmental events. The rules that we use to view the world are important to understanding why we think and behave the way we do. Overall, human behavior cannot be fully understood without examining how people acquire, store, and process information.