Set objectives and evaluate these objectives
In this task researcher is going to set objectives and evaluate these objectives.
Aim of this objective is to set the objectives for the organisation.
An objective represents a long-term goal of a business. A business has to decide on what objectives it should have, so it can accomplish its mission. Many businesses (especially SAM’S) objective to:
- Make profit
- Provide goods and services to the local and wider community
- Survive as a business or expand
- Maximise sales or improve the quality of a product or service
- Provide a highly competitive service
- Be charitable
- Be environmentally friendly
This is a list of SAM’S’s objectives:
- To develop a strong and vital range
- To offer out-standing sales prices
- To improve the meeting with our customers
- To continue to reduce purchase prices and product quality
- To develop a logistical efficiency in the whole pipeline
- To attract, develop and inspire our people
- To be one SAM’S
- To become leaner, simpler and quicker
- To take responsibility for our suppliers, their co-workers and for the environment
- To keep the culture of SAM’S as a strong and living reality
1. To develop a strong and vital range
SAM’S has to do the following to achieve its first objective:
- Improve their offers such as low prices and discounts
- Find untapped market potentials
- Variety of sizes under tight control
- 10% volume growth per year on an overall level
- At least two business areas with growth rates of 20-30% or above
2. To offer out-standing sales prices
SAM’S has to carry out the following, in order for the business to complete its objective:
- Have competitive prices at all times
- A sustainable price distance
- An out-standing value for money
- At least 20% reduction in sales prices by 2010
3. To improve the meeting with our customers
The company need to do the following, to fulfil its objective:
- Need to be accessible and convenient
- Constant inflow of new ideas, inspiration and knowledge
- Approximately 80% of their stores need to be in good shape, at all times
- Make the shopping experience more attractive, in the local market
- Lead the development of retailing
4. To continue to reduce purchase prices and product quality
SAM’S has to complete the following, to achieve this objective:
- SAM’S need to reduce 20% in purchase prices, by 2010
- Show the improvement of the product quality to the customers
- Have unique purchase opportunities such as “over tag”
- Stay close to the production
5. To develop a logistical efficiency in the whole pipeline
The business has to do the following, to accomplish its objective:
- Have high and stable service level, in all stores at all times
6. To attract, develop and inspire our people
The company need to do the following to complete this objective:
- Have the most important priority of all
- Should have opportunities and responsibility to learn and develop
- Successors with the potentials must do an even better job than their predecessors
- Encourage an environment where people of different views, age, nationality, gender and ethnical background feel welcome
7. To be one SAM’S
To become one SAM’S, the business has to:
- Understand all aspects of SAM’S’s operations
- Are genuinely interested in sharing and accepting ideas from each other
- Get more people and information across the global
- Break down all barriers between functions and markets
8. To become leaner, simpler and quicker
SAM’S has to do the following, to become leaner, simpler and quicker:
- Shorten the distance between suppliers and customers
- Reduce the distance between the different levels in their organisation
- Defeat all unnecessary bureaucracy
- Give more responsibility to the front line
- Become big but act small
9. To take responsibility for our suppliers, their so-workers and for the environment
SAM’S has to carry out the following, in order for the business to complete its objective:
- Build a globally strong supply base through trust and mutual advantage
- Secure acceptable working conditions for their suppliers and co-workers
- Always try to minimise their effect upon the environment
10. To keep the culture of SAM’S strong and living reality
The company must do the following, to achieve this objective:
- Their competitive and soul has to benefit to the business
- Develop not only uphold
- Keep it unique but respect local values
A business objective shows what it objectives to achieve. To do this, the objectives must be measurable. The objectives must be S.M.A.R.T. - Specific, Measurable, Attainable, Realistic and Timely. Here is an explanation of S.M.A.R.T.:
S–Specific, the target should identify a particular item or area
M- Measurable, add a quantity, percentage or monetary so, you can have accurate target to objective for
A- Attainable, the objectives must be attained by everyone who can have an influence on the outcome.
R- Realistic, the targets has to be tough, but not too tough or else people will give up without trying, because, the target is impossible to reach
T- Timely, the objective should have a deadline, so that when that deadline comes, you can make sure if you have achieved the target
An example of a measurable objective for KIDASA Software is, “update the helpdesk telephone system by December 1stto achieve average client wait times of no more than two minutes”.
Objectives vary according the business structure, the range of stages of development and the sort of industry in which it operates, such as manufacturing, charity, etc. Objectives can be used to set targets and challenges for a business. Examples include:
- Selling more products than a competitor
- Providing more service than the previous year
- Producing new products or providing new services
- Improving a product or service
The SAM’S Group stores want to meet the following objectives:
- To increase public perception of SAM’S in the retail marketplace
- To enhance the SAM’S brand name
- To maintain develop and expand the local customer base
- To establish SAM’S as a key player in the furniture market
These are SAM’S’s objectives in Wednesbury:
- We will achieve sales of £68.1 million
- We will achieve an average customer spend of £50.28 (the average amount customers spend on each visit to the store)
- We will achieve a recovery rate of 71% (recovery rate is the amount waste that can be recycled)
1. We will achieve sales of £68.1 million
I believe that, this objective is not S.M.A.R.T. This is because; it is no specific on sales- do they mean sales of goods or overall sales? This objective is measurable because it has an accurate monetary value. The objective is attainable. The sales of £68.1 million are tough but not too tough so, it is realistic. There is no deadline set for this objective.
2. We will achieve an average customer spend of £50.28 (the average amount customers spend on each visit to the store)
I think this objective is S.M.A.R.T.; it is specific on average customer, it has an accurate customer spend of £50.28 (it is measurable), it is agreed- they used the word “we”, the amount of money spend by customers is realistic and it is timed- it states, “The amount customers spend on each visit to the store”.
3. We will achieve a recovery rate of 71% (recovery rate is the amount waste that can be recycled)
This is not an S.M.A.R.T objective. It is not timed because there are no deadlines stated on the objective. It is specific because, it identifies a particular area- “recovery rate”. It is measurable because, the recovery rate of 71% is accurate. It is agreed because, they used “we” in the objective. It is also realistic because, the objective seems as if it is tough.
This is a diagram of the hierarchy of objectives. It shows how staff influences the organisation at different levels.
Businesses can evaluate their performance to find out how well they are doing and how they could improve it. They can do this by organising meetings, where staff can review their activities and change or set new objectives, to help a business meet its objectives.
Sam’s, which is a global firm, have many needs as business.
Customer Satisfaction i.e. product quality & speed of service.
Achieving their financial targets i.e.
and increasing their
Meeting the health and safety regulations.
Meeting food hygiene standards e.g. quality of food.
Well trained staff that are efficient.
Open as many outlets as possible in different countries including some European countries where they do not currently have their restaurant e.g. Albania & Armenia.
Providing a good return to their shareholders.
Maintaining their good reputation and this will have a positive impact on the goodwill.
Being a socially responsible company that looks after the community and environment.
Adapting to the customers needs i.e. constantly introducing new products to meet the needs of their customers.
Sam’s original philosophy, which was laid down shortly after World War 2, was;
“Everything prepared in advance, everything uniform. All geared to heavy volume in a short amount of time”.
In order for Sam’s to succeed with their philosophy, they have to satisfy customers’ expectations. For example, when a customer enters the store they expect Sam’s products to be of a superior quality and some individuals expect the products to be healthy for the health conscious individuals. Moreover, the speed of service is a key issue for Sam’s; people are not willing to wait for a long time in the queue or for their food to be prepared. However, in the case study we are informed that the waiting time of 15 minutes is not unusual in the Eastborough restaurant. This issue requires investigation and in order to solve this problem, Sam’s, at that particular restaurant could take on more staff at peak periods in order to cope up with the surge in demand.
Sam’s have many key features through which they deliver services to their customers. Initially, Sam’s deliver their service through transforming the inputs into outputs i.e. the raw materials (e.g. raw chicken breast) being transformed into an output (cooked chicken breast) and then being delivered to the customer. Furthermore, each Sam’s restaurant (corporation owned or franchised owned) have the same Sam’s layout, with the trademark of McDonald (M). This allows convenience for both the customers and the employees but most importantly it is the
efficiency and speed of delivery which would have a positive impact upon the customers. The production area and tills are designed with convenience in mind for both the customers and employees for quick service.
Serving the customers is done the same way in every Sam’s and below is a flowchart to illustrate on how the customers are served for a typical order for a Big Mac, coffee and fries;
Another method by which Sam’s deliver customer service is thorough ‘
production planning’. This involves a manager preparing a daily chart of projected sales by hour throughout the day, which together with the previous three week’s sales along with the sales for the same period last year are inputted onto the computer, which proposes the bin levels by product. A surge or fall in demand is acted upon; if there is a surge in demand i.e. school children coming to the store after their school has finished, then employees are contacted via telephone to see if they are available or not. In busy periods, every employee is asked to work more ‘slickly’ and employees are allocated to the jobs in which they perform most efficiently known as ‘aces in their places’. On the other hand if there is an excess of staff then the manager will ask if someone wishes to go home. Furthermore, in order for Sam’s to effectively deliver their service, they use the computer in planning ‘
manning levels’; which depends upon the sales prediction in that particular week. From the table in the case study (Exhibit 6), we can notice that the busies period for the Eastborough restaurant is Saturday lunchtime, when the require 48 staff on site to perform their respective duties.
Another way through which Sam’s deliver their service is through using techniques such as
’selling up’ and ’suggestive selling’. The initial involves asking the customer if they require a larger portion i.e. fries or if they require any additional item whereas the latter involves suggesting to the customer the nearest extra value meal.
production controltechniques are in place in order to handle the high volume of sales and ensure a fast service. Production control involves the production person, at the start of the day, to check the bins and request the products required from the grill area and the chicken station. To guarantee that the food is fresh and piping hot, the food which has been in the bin for more than 10 minutes is removed and discarded. This is often done through using a purpose designed clock.
Another way through which Sam’s deliver their service is through preparing the products according to the carefully detailed rules. For example, the fries must be left to defrost for 45 minutes before frying them in order to minimize the amount of water reaching the fry fat. Moreover, the fries must be cooked for three minutes, plus or minus five seconds and fries with an holding time of more than 7 minutes should be discarded
.To ensure that staff are aware of these rules, there is an
Observational Check List (OCL)which details precisely the steps to prepare a product.
Lastly, another method of delivering service is through
Staff Training; good teamwork and routines are set for dealing with customers. Staff are expected to reach a level of expertise, designated 5-star, within 5 months for a full time worker or 10 months for a part time worker. The level of expertise is assessed through the OCL and each quarter an external audit is carried out which grades a particular restaurant on the OCL scores obtained. However, annually the restaurant is subjected to a more intensive audit known as the ’
Full Field’which reinforces Sam’s motto of QSC&V(quality, service, cleanliness and value).
The more efficient the service delivery of Sam’s is the more likely will the needs of the business being met. In my opinion, Sam’s meet the needs of the business fairly effectively through delivering their services well. Firstly, customer satisfaction is achieved through providing customers with efficient & fast service which offers customers value for money. Sam’s use a stopwatch to observe the waiting times of the customers; the restaurant objectives not tot exceed a maximum time for the customer waiting in the line for two minutes and a maximum waiting time of one minute for the order being placed. the case study informs us that a waiting time of 15 minutes is not unusual. This problem could be solved through taking on more staff at peak periods to meet the demand. Furthermore Sam’s could decorate the store and make the ambience livelier which would appeal to the customer and hence promote a welcoming environment. Furthermore, the techniques employed by Sam’s such as suggestive selling and selling up meet the financial target needs of the business, which also links in with the customer satisfaction issue. If the customer is happy with the service they have received, they are likely to come back to the restaurants, which would increase revenue for the firm. Word of mouth is also a strong technique which could help the business increase their sales. It is believed that if a person is satisfied with the service that they have achieved, they are likely to tell 4 people, however if they are dissatisfied with the service they are likely to tell 10 people. Therefore, it is vital that Sam’s satisfy their customers. Customer satisfaction shall also enable Sam’s to open more stores in countries where do not currently have their restaurants e.g. Albania & Armenia. The increased revue which would be as a result of efficient service delivery would have a positive financial impact upon the return for the shareholder; the more the revenue for the firm, the more dividend would be allocated to the shareholders.
Further, staff training methods are used by Sam’s e.g. OCL and the ‘5-star’ system is in place to meet the needs of the business, which is to have efficient staff members. Furthermore, staff training is important for the firm to carry out the processes effectively; staff need to know how to use the sophisticated machinery effectively so that they do not delay the customers order.
Change and adaptation of objective:
During the past few years, there have been changes within the business, which has had an impact upon their operations and the community. Initially,
Sam’s have revised their menu; Sam’s have introduced healthy living items such as pancakes, sandwiches, salads and now use quality cooking oil for their French fries that contain no trans fat, which is harmful for the human body. This was accomplished after pressures from many campaigners (i.e. London Greenpeace) and individuals for not selling healthy products for children and adults This change will have a favourable impact upon the community as it will help them choose a from a wide range of choice but most importantly it will promote healthy living.
Sam’s have purchased three popular businessesi.e. Donatos Pizza, Boston Market & a chain of Mexican restaurants. As mentioned in the case study, Sam’s need to make some additions to the portfolio i.e. look at each of the businesses menu and try to improvise the ingredients of certain products that have a adverse impact of the community’s health. For example, as they have acquired Donatos Pizza, they could perhaps use very low fat cheese which would contribute towards Sam’s their bit for the community.
Sam’s have introduced a ‘made for you’ system, with an investment of $400 million, which they believe will increase sales across their 12,700 US restaurants.
From the annual report of Sam’s in 2008, it is clear that the rate if sales increase of Sam’s in USA have decreased from 5.2% in 2006 to 4.0% in 2008. This could be as a consequence to the adverse affect of the ’made for you’ service and hence the rate of sales have decreased. However, the total sales revue of Sam’s has been rising steadily every year and in 2008 their sales revenue was $23.5bn.
Moreover, the number of Sam’s stores worldwide have increased from 31,406 in 2006 to 31,967 in 2008. Some of the investment was on latest technology that could heat the products in a minimum time frame, to reduce the waiting time. Consequently, after the introduction of the ’made for you’ system, Sam’s believe that the quality of their products have improved, but the waiting times have doubled and a waiting time of 15 minutes is not unusual. This could, in my opinion, have an adverse impact upon their sales as people would not be prepared to wait long periods as they expect food to be served quickly in a fast food restaurant. A valid example in the case study informs us that when hordes of people come in at one particular time i.e. end of school, there is an influx of many people at one time and made for you cannot be implemented efficiently due to time restrictions.
Another change implemented recently is the
‘Sam’s Experience’where Sam’s have collaborated with Disney as well as introducing play areas for young children as well as inviting senior citizens to play bingo in some of their stores. This will have attract a wide range of age groups, from young to old people and hence it would help contribute towards the profitability for the firm through increased customer base
Moreover, Sam’s have initiated a concept known as
’Core offering’, which is incorporating regional changes in different countries. For example, in the US, Sam’s are planning to invest $400 million to renovate every Sam’s which is older than 15 years. This would be costly for Sam’s in the short term, however in the longer term it will help generate more revenue and hence profit, through attracting more customers in the improved stores.