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Case Study: Supershuttle New York (Blue Van)

Zhou YuanYuan 2122033Z


Pre-master in Management Course
August 2014

Class A1/3 Tutor: Joyce Laird-Partsanakis

University of Glasgow Language Centre


EFL Unit
In collaboration with
the Business School

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Content
1. Introduction ................................................................................................................ 3
2. The Situation of Supershuttle ................................................................................... 3
3. Challengers for Supershuttle ...................................................................................... 4
3.1 Poor Service .................................................................................................................... 4
3.2 Customer Relations ......................................................................................................... 4

4. Managing Operations ................................................................................................. 4


4.1 Purpose of Operations Management ............................................................................. 4
4.2 Methods to improve Capacities Management and Service Quality ............................ 5
4.2.1 Input Systematic Performance Standard: Balanced Scorecard

..................................... 5

4.2.2 Input Supporting Management Techniques: TQM ......................................................... 5


4.3 Use Problem-Solving Tool: Six Sigma Approach ........................................................ 5

5.External management.................................................................................................. 6
5.1 Improve customer relations ............................................................................................. 6
5.2 Customer Relationship Management (CRM) .................................................................. 6

6. Managing Internal Relationships ............................................................................... 6


6.1 An Effective Manager ..................................................................................................... 6
6.2 Build a Customer Recovery Team ................................................................................. 7

7. Managing Operational Finance: Price Strategy ......................................................... 7


8. Conclusion ................................................................................................................. 8

Reference ................................................................................................................................. 9

1.Introduction

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Supershuttle is a multi-national company, providing an airport shuttle service,


whose trademark is well-known in America. This organisation carries nearly 20,000
customers each day forth and back between airports and their customers destinations
(Supershuttle, 2014). Supershuttle strives to maintain service quality and reliability
(ibid, 2014). The above factors, quality and reliability are the companys competitive
priorities, which are essential to operate a company (Sulaiman, 2014). Companies
manage processes and systems, including capacity management in order to achieve
the above objectives, to maximise outputs and satisfy customers (ibid, 2014).
However, Supershuttle is a franchise firm, while Blue Van who hold the New York
Franchise has faced serious problems with customer relations. This essay aims to
identify effective solutions to ensure high quality service for this company. It firstly
describes the situation, and then explores the main problems in four functions of
management: managing operations, managing external relationships in terms of
customer, managing internal relationships and managing operational finance. This is
followed by solutions and an evaluation; finally some recommendations are provided.

2. The Situation of Supershuttle


Franchising is a method for companies to either spread their brand or enlarge the
business market rapidly to meet the demands of customers by unique competitive
priorities (Boddy, 2014). Supershuttle specialises in shared-ride airport shuttle
services to customers in 19 major US cities. However, the service of the company is
not as efficient as they describe in the official website and customer experience does
not meet their perceive, due to the franchisor image and popularity in the US. Also,
there was no customer service point online at that time. According to Supershuttle
(2014), the rating for reliability is one star out of five. There are many complaints
shown on the website however there seem to be no responses from the company.

3.Challenges for Supershuttle


3.1 Poor Service

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One of the main problems in this case is the poor service, divided into poor quality
and poor recovery service. It is reflected in capacity management, including materials
management and total quality management (TQM). Firstly, poor quality appears here:
Supershuttle was unable to deliver their service on time, which caused customer
dissatisfaction. Secondly, poor recovery service was shown due to the firm failing to
offer alternative service and fulfill their promise to re-imburse additional cost that
customers paid. The above difficulties have reduced the companys reliability and
flexibility, which are basic competitive capacities (Sulaiman, 2014). Hence, it gets
problematic when the organisation loses their primary competitive capabilities.
3.2 Customer Relations
Poor customer relations is another serious issue in this case. To begin with, the
company did not manage their relationships with clients seriously through
communications in terms of attitude, language and facilities throughout all business
operations. Moreover, employees lack standardised training from the franchisor.
There were many complaints among people on Reviewcentre about employees
inappropriate behaviors (Supershuttle, 2014). For instance, one driver was rude and
broke a customers baggage without apologies (ibid, 2014)). Research has shown that
around 62% of customers would not purchase a particular product or service after
hearing one to three bad recommendations (Castledine, 2014). This problem refers to
human resources management and customer relationship management (CRM).

4.Managing Operations
4.1 Purpose of Operations Management
Operations management refers to the systematic design, operation and improvement
of the systems that produce and deliver the organisations goods and services
(Krajewski, Ritzman and Malhotra, 2013). In other words, this is to optimise the
processes, which efficiently and effectively translate input to output, in order to meet
customer requirements (ibid, 2013). Therefore, Supershuttle, through adopting a
systematic performance standard, could input a few useful management techniques to
redesign and manage their processes. In this way, the firm could fix their poor

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services problems and to reach people demands, which is considered the most
effective way for the company long-term development.
4.2 Methods to improve Capacities Management and Service Quality
4.2.1 Input Systematic Performance Standard: Balanced Scorecard
Supershuttle

and

Blue

Van

could

establish

systematic

performance

management-balanced scorecard to balance the demand and supply. It is associated


with computed-based information systems: a booking system and a distribution
system. Sulaiman (2014) points out that this standard is effective for managing and
measuring companies performances and competitive capacities to make sure every
part of the operations run correctly. For example, the computer system would help the
enterprise to check bookings and distribution systems to discover potential problems
and to refine the processes. Accordingly, Supershuttle would have transportation to
deliver on time, by adopting this standard.
4.2.2 Input Supporting Management Techniques: Total Quality Management
(TQM)
Castledine (2014) stated that Service quality is a very effective competitive weapon,
and this is an essential method to measure whether the service meets customers needs
or causes dissatisfaction. The core principle of TQM is to achieve high levels of
process quality and produce error-free products rather than to test that afterwards
(Sulaiman, 2014). Customer satisfaction is one of the important elements in TQM.
Applying this technique can help the organisation to find the clients requirements, to
fulfill the service, and to achieve what is perceived high quality service.
4.3 Use Problem-Solving Tool: Six Sigma Approach
Six Sigma Approach is a data-driven methodology to eliminate defects in any process,
to achieve, sustain and maximise business success (Sulaiman, 2014). Moreover, not
only can it improve quality but also reduce the total cost through reducing the
recovery material and management cost (ibid, 2014).

5.External management
5.1 Improve customer relations

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Satisfying customers and building good relationships with them is core to improving
customer relations. Effective interaction for meeting client expectation is the best way
to improve their satisfaction (Boddy, 2005). There are two actions that could be done
by Supershuttle to retrieve the situation when problems occur. Firstly, the enterprise
should keep their promise. Castledine (2014) reported that one effective way to retain
existing clients is promise fulfillment. Secondly, an online customer service point can
be built: gathering complaints and feedbacks can help the firm to improve their
service. Being skilled in tackling problems is a critical way to satisfy consumers
(Castledine 2014).
5.2 Customer Relationship Management (CRM)
Establishing CRM system is to maximise benefits through identifying the demands
(Castledine, 2014). CRM systems are intended to build and sustain long-term
business in customers. (Boddy, 2005, p397). Thus, gathering feedback from
consumers can help the firm to learn from mistakes, and contribute to continuous
growth.

6. Managing Internal Relationships


6.1 An Effective Manager
Employing a manager may be able to solve Supershuttles problems. Pearson (2014)
stated a manager is required to build effective teams on specific purpose, to monitor,
to control the whole process, to train their employees, to ensure their teamwork
operates smoothly and also to develop the internal relationships (ibid, 2014). For
instance, in this case, the organisation needs an operation manager, who devotes to
develop new capabilities and maintains existing capabilities to best serve the firms
external customers (Krajewski, Ritzman and Malhotra, 2013). Moreover, the manager
would be a decision-maker to resolve incident and capable of decising what
alternative arrangement can be taken immediately to retrieve the situations and what
management techniques can be adopted to revise processes evaluating the cost and
profit. Furthermore, Pearson (2014) found that a manager is also important to develop
relationships between departments to ensure they have same decisions to avoid

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incident encountered: the customers did not receive a full refund at the end, even
though the firm had promised to return it.
6.2 Build a Customer Recovery Team
Furthermore, building a specific customer recovery team would address the customers
complaints effectively and resolve the after-sale relevant problems. An effective
team contributes to business performance (Boddy, 2005). However, in Supershuttle,
the daily responsibilities of the customer care department are various, including
reservations, lost and found inquiries, and everything in between (Supershuttle, 2014).
This shows that the companys employees have poor team working skills, which
causes low efficiency and low quality. Therefore, creating specialised teams or
departments could give a better service to clients (Boddy, 2005). Efficient teamwork
can encourage members to deal with problems efficiently (Pearson, 2014).

7. Managing Operational Finance: Price Strategy


Using price discrimination would be helpful to the company to shift the exceeding
demands (Wilson, 2014). The company has supplying problems with demands of
shuttles at peak times. However, it also may result form drivers dissatisfaction due to
the much lower payments, in comparison with other taxi companys price. For
example, Supershuttles price is 41 compared with75 for other companies.
Increasing the price to 59 will not make the company lose the competitive
priorities on price. Thus, reference pricing can be used to help the company to regard
competitors price when making pricing decisions (ibid, 2014). Moreover, price
discrimination can help the firm to obtain the goal of maximizing profit by shifting
the various prices from the peak times to the off-peak times (ibid, 2014). It means
Supershuttle can increase the price during rush hours and go back at off-peak period.
Hence, these price strategies are useful to solve demand surpassing supply problem as
well as rising profit.
8.Conclusion
This essay has explained the managing problems that Supershuttle faced in
operational processes and responded to the facts based on four managerial aspects,

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including operations, external relationships, internal relationships and operational


finance. Although the company needs to challenge the capability management, an
operations manager would set decisions to address the difficulties through
establishing recovery teams, relying on computerised decision-making tools, to adopt
the balanced scorecard and to use price strategy to maximise profits. It would
continue to satisfy customers through integrating competitive priorities. Thus in short
term, the most effective solution would be to appoint a specialised manager who
should focus on rebuilding customer relations through CRM system. Afterwards, the
operational system should be revised by TQM system for long-term development.
Finally, acquiring more loyal customers through high quality service and superior
customers relationships would be the objectives for the firm; and their teams would be
involved in the continuous improvement process, which would result in a large-scale
quality increase and rapid development in the future.

Word Count: 1650


Reference:
Boddy, D. (2005). Management: An Introduction, 3th ed, Harlow: Prentice Hall, P308.
Castledine, P. (2014). Managing External Relationships. Lecture notes distributed in
pre-masters in Management, at the University of Glasgow, on 30/07/2014.
Krajewski, L., Ritzman, L., and Malhotra, M. (2013) Operations Management:
processes and supply chains, 10th ed, Edinburgh, P22, P40.
Pearson, A. (2014). Managing Internal Relationships. Lecture notes distributed in

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pre-masters in Management, at the University of Glasgow, on 14/08/2014.


Reviewcentre (2014). Supershuttle, http://www.reviewcentre.com/reviews84259.html.
Accessed 06/08/2014.
Sulaiman, S. (2014). Managing Operations. Lecture notes distributed in pre-masters
in Management, at the University of Glasgow, on 06/08/2014.
Supershuttle (2014). Supershuttle Online Reservation, http://www.supershuttle.com.
Accessed 06/ 08/2014.
Wilson, J. (2014). Managing Operational Finance. Lecture notes distributed in
pre-masters in Management, at the University of Glasgow, on 19/08/2014