Quantas and Virgin Blueprint exercise

  • Category:
    Marketing
  • Document type:
    Assignment
  • Level:
    Masters
  • Page:
    2
  • Words:
    1375

Service Profit Chain is a concept which looks to develop different linkages between different business process so that the business becomes successful over a longer period of time. The process moves away from the traditional method where customers were given priority and looks to give importance to employees along with customer so that a chain which helps the different benefits to be passed from one player to the other is ensured. The process requires to focus on employees where employees are provided with the resources so that they remain focused and motivated. This helps to ensure that the employees are satisfied and loyal which improves the productivity and the impact is seen on the service level as customers are provided with superior services. This helps to develop a pool of loyal customers and helps the organization to multiply their productivity and increases the overall level of profit and reduces the risk thereby increasing the chances of future growth (Heskett, Jones, Loveman, Sasser & Schlesinger, 1994, p. 5). The process thereby focuses on the soft measures and objects which will help to use the different resources in the best possible manner so that the overall objectives of the business will be attained and the long term growth and profitability of the organization can be ensured.

Qantas Airlines has addressed the concept of service profit chain in the manner they carry out their operations. The diagram representing the same is as

 Quantas and Virgin Blueprint exercise

The airlines has looked towards having employees who are highly skilled and trained which has helped them to improve their level of service standard. The different training and counselling sessions has helped them to carry out the work with utmost efficiency and has helped them to understand the needs and requirements of the employees. Since, airline industry is a differentiated industry where service standard are one of the most important concept so Qantas Airlines has looked to shape their employees skills for better results (Chen, 2003, p. 683). Linking the performance of employees with incentives and rewards has also helped to ensure that employees are able to carry out the different roles and responsibilities in the most effective manner.

Another important aspect which Qantas Airlines has adopted is allowing the employees to be innovative while carrying out different operations. This has helped them to develop new and efficient methods which are aimed towards maximizing the overall level of service. The business model along with continuously changing service model has helped to ensure that employees are able to change and improve their service standards. This as a result has been seen on the performance of the organization as customers are better satisfied with the service level (Czinkota & Ronkainen, 2004, p. 33). This has helped to develop a pool of loyal customers and has also ensured that the overall productivity and profits have increased. Focusing on core areas and being innovative and linking it to employee performance has brought a complete change in the manner organization works and has improved the service standards. The profit level as a result has increased and Qantas is experiencing better growth rates along with having a pool f loyal employees and customers (Cook & Dave, 2004, p. 203). This is in addition to the fact that the process has led helped the organization to be innovative and come up with new ideas and continuously change and develop the manner and process through which service quality can be improved. The overall impact of such has been an improvement in the bottom line through better productivity and growth rate.

Virgin airlines has also worked on a similar model like Qantas and has looked towards taking advantage of the service profit chain so the better services can be delivered which will lead towards higher profits and growth and is as

 Quantas and Virgin Blueprint exercise 1

Virgin airlines has been very careful while hiring employees and looks to hire people who have the required experience and skills so that overall level of service can be improved (Cable & Judge, 2006, p. 296). The organization also provides training to its employees and takes all necessary steps which will help to improve the manner in which different skills are imparted and will thereby help to bring a complete change and transformation in the manner services are delivered.

Virgin airlines to improve productivity has linked performance to reward so that employees who are able to differentiate their service level are paid high in comparison to others. This has created the required zeal among the employees to work harder and has thereby completely transformed and changed the manner in which different functions are carried out. This has changed the service standards and has helped the organization to be innovative and come up with new and better solutions (Bateman & Snell, 2004, p. 127). The process has led towards overall development and has thereby improved the level of customer satisfaction. This has helped to develop a pool of loyal customers who prefer to travel by Virgin airlines. In addition to it Virgin airlines has abundant employees who work on a rotation policy ensuring that employees don’t become tired and are able to execute the different plans with the same enthusiasm and energy. This ensures that the service level doesn’t falls under any circumstances and the organization is able to work towards improving the entire manner in which services are provided. This has helped to ensure that employees productivity gets reflected towards customer satisfaction which has ultimately led towards increase in the productivity and profitability. This creates an opportunity where the business will be in a place through which better results and long term growth can be ensured in the future. The usage of the service profit chain and brining changes in the manner different activities were undertaken has helped Virgin airlines to bring a change in their outlook of carrying out different operations.

This clearly shows that both Virgin and Qantas airlines looks to follow the different principles of service profit chain and has developed their business fundamentals based on it. There is very little difference which is visible on the strategy which has been used by both the organization and has thereby ensured that the service level standard of the industry has changed and has been raised. Since the operators are looking to develop their internal resources and making changes by being innovative has helped them to multiply the experience for customers and has created an opportunity through which long term productivity has multiplied (Cateora, Mary & Graham, 2009, p. 128). Focusing on the employees and their needs and skills have indirectly helped the airlines to focus on core areas through which they are able to provide better services. This process has changed the area of focus but the objective remains the same and has thereby created a new scope through which overall dimensions and growth of the business becomes possible (Alvarez & Casielles, 2005, p. 57)

The strategy of service profit chain has thereby been effective and has brought complete change in the manner organization works as it has helped to work on the required soft areas which have improved service level. This has led towards ensuring that the overall process and mechanism which was used for carrying out different activities have changed and has helped to multiply the effectiveness through the increase in customer satisfaction, productivity and profitability.

References

Alvarez, B. & Casielles, R. 2005. Consumer evaluations of sales promotion: the effect on brand choice, European Journal of Marketing, 39 (1/2), pp. 54-70.

Bateman, T. & Snell, S. 2004. Management: The New Competitive Landscape. 6th Edition, McGraw Hill, New York

Cable, D. & Judge, T. 2006. Person-organization fit, job choice decisions, and organizational entry. Organizational Behavior and Human Decision Processes, 67(3), 294–311

Czinkota, M.R. & Ronkainen, I. A. 2004. International Marketing, 7th edn. South-WesternPublishing:Australia.

Cateora, P.R. & Mary, C. G. & Graham, J.L. 2009. International Marketing, 14th edn. Irwin: McGraw-Hill.

Chen, I. 2003. Understanding Customer relationship management: people, process and technology. Business Process Management Journal, 9 (5), 672-688

Cook, D. & Dave, D. 2004. Structural element of service quality product. International Journal of Business Performance Management, 6 (2), 189-207

Heskett, J., Jones, T., Loveman, G., Sasser, W, & Schlesinger, L. 1994. Putting the Service – Profit Chain to Work. Harvard Business Review