Operations Management - MN 5210

Case BSB, INC.: The Pizza Wars Come to

Campus

Group 1
Dananjaya R.M.K 169007F
De Silva J.G.D.S 169008J
Samaranayake N.L.C.P 169032C
Hettiarachchi A.M 169018N
Silva S.I.D 169036R
Sandun Lakmina 169023B

Outline
Background of the Case
Applications of Operations
Management
Q&A

BSB, Inc.,
Large, nationally operated food
services company
Organized in to three market
oriented divisions;
Corporate
Airline
University or college

University food service

Has been operating for the past 10
years
At this university BSB, Inc., is under
contract to provide food services for
the entire campus of 6000 students
& 3000 staff.
Cafeteria
Dogwood room
Grill

Pizza Decision
Renee Kershaw joined as the manager of
food-services at the university 18 months ago
Undertook survey to determine customer
needs and market trends
Survey revealed the following:
% of food prepared in dorm rooms - 20
% of food delivered from off campus - 36
% of food consumed off campus - 44

Pizza Decision

cont..

Major reasons to consume food off-campus

1.Lack of variety
2.Inconvenient timings
Other findings from the survey:
1.Large percentage of students with cars
2.Large percentage of students with refrigerators
and microwave ovens in the rooms
3.Substantial amount of food was consumed
from outlets others than BSB Inc.

Pizza Decision
Expansion of the grill to include pizza
Starting a delivery service
Strategies????
Pizza oven was installed in the grill
Space was allocated to store pizza
ingredients
Space was allocated to make cut and box
pieces
Space was allocated to stage premade pizzas
that were ready to cook

Strategies?????
Additional person hired to delivery
Existing persons were trained to
make pizza
Limited the combinations of toppings
(limited no of standard pizzas) keep
cost down & provide fast delivery

The Success
Sales 10 months after the
introduction of pizzas, sales and
profits increased steadily
Customers indicated satisfaction with
the reasonable pricing and speedy
delivery service

Challenges
Increased demand put strain on The
Grills facilities, existing equipment
and space allocated were now
insufficient to meet demand
Led to delay in delivery
Sales began leveling off
Request for off menu orders
increased

New Challenge
The University recently announced the
construction of a new student center which would
house three private food-service providers, Taco
Bell, Dunkin Donuts and Pizza Hut
Kershaw is especially concerned with the entry of
direct competitor Pizza Hut
Pizza Hut is expected to offer a limited selection of
pizzas
Will not accept phone orders
Will not offer delivery service

Sandun - Q1
Close proximity to customers
Food consumed at BSB facilities 57%
Food consumed at facilities other than BSB 43%
Location
Market knowledge
This means;
Quick delivery times
Lower costs
More in tune with customer needs

Aparajith -Q2
Kershaw chose to compete on two fronts
1) Convenience Price
) Pizzas were reasonably priced
) Allowed BSB Inc. to compete with off-campus operators
) Price was the order qualifier

2) Quick delivery times were ensured by:

) Preparing pizzas before hand
) Delivering through bicycles
) Delivery was the order winner

Chamara - Q3
The new food court will bring BSB in competition with the new
food operators. In effect, BSB will lose its monopoly over the
university campus market.
1.The new competition will enjoy the same location advantage as
BSB Inc.
2.New competitors are backed by brand names and reputation
3.The new competition offers varieties such as snacks and fast food
4.Of the three, Pizza Hut would be of majorconcern, since it will
directly compete with BSB in the pizza market
The competitive priorities.
1.BSB Inc. will likely retain its delivery service advantage
2.Limited variety at Pizza Hut could be an advantage for BSB
Inc.3.Given standardized menus of large franchises such as Pizza
Hut, they might be unwilling to lowercosts. BSB may likely retain
its cost advantage

Question 4
If she were to change competitive
priorities for the pizza operation,
what are the gaps between the
priorities and capabilities of the
process?
How might that affect her operating
processes and capacity decisions?

 New priorities
Product flexibility
Volume flexibility
Operation flexibility

The Gaps
Insufficient space and equipment for making
pizzas putting strain on grill operations
Higher demand from groups who order
pizzas in volume for various on-campus
function affecting delivery times.
Increasing request from student for pizza
toppings and combinations currently not on
menu.

 If product flexibility and volume

flexibility become more important,
then the implications are:
Inventory issue
Kershaw needs to stock additional
toppings because of demand or
variety. This will aid product flexibility
Delivery service
If BSB Inc. hopes to keep up with the
increase of demand and capacity. It
will have to increase its
Delivery fleet to ensure on time

It will have to increase its delivery fleet to ensure on

time delivery of pizza to dorm rooms across campus.
capacity issue
Facility: Kershaw need to add capacity to meet
increased demand. She may even have to consider
moving into a new area that fully focusing on the
pizza operation.
Equipment: Furthermore, Kershaw will have to
invest in larger ovens and equipment to meet the
rising
demand
Personnel: Additionally, it will have to manage staff
to operate late nights. This will help BSB achieve
volume and operation flexibility.

Question 5
What would be a service strategy for
Kershaws operations on campus to
meet the food court competition?

 SWOT Analysis for BSB Inc.

Strength

Weakness

Convenience: Offers phone order

and delivery service

Limited Capacity:
The existing capacities is not
sufficient,
and is putting strain on its delivery
service

Affordability:
Through a standardized menu
offering, BSB
Inc. is able to offer affordable
meals to students on campus

Limited Variety:
Standard offering below customer
expectations

Market knowledge:
BSB is an experienced market
player
and has deep knowledge about the
student food preferences.

Opportunity

Threats

Operating Hours:
It is unlikely that Pizza Hut will be
operating late nights. BSB
currently operates The Grill until
12 A.M. on Fridays and Saturdays.

Lack of Brand Recognition:

BSB lacks the reputable brand
name of the new entrants, who
are well established in the market

Standardized Menu:
For Pizza Hut, are expected to
offer a
limited selection of pizzas

Lack of Convenience Food

Offering:
Taco Bell and Dunkin Donuts offer
easy/ready-to-go fast food
matching with the student
situations (hectic situation and
always on the move)

 Aspects in Operations Strategy

Product
Service
Process and technology
Capacity
Human resources
Quality
Facilities
Sourcing
Operating systems

Good competitive service strategy that

can be taken by Kershaw:
Varied Menu
Add new types of items such as fast
food options and snacks
Add new types of pizza toppings and
combinations

Operating Hours
Expand operating hours especially
during examination and special
events on campus
Innovation
Extend the menu (with same
ingredients to maintain low cost) but
encourage product innovations.
E.g.Make your own pizzas

Delivery
Kershaw might take advantage of being the
only food-service provider offering delivery
service on campus and advertise heavily
highlighting their competitive advantage,
i.e. fast delivery on campus.
Volume
Kershaw is currently operating at The Grill at
full capacity. They will have to increase
production capacity to increase pizza
production. For this, they will have relocate
to a larger area. The cafeteria is a viable
candidates for relocation

Affordability
Compete on the basis of price. Large
food service franchises charge similar
prices nationwide. They will most likely
be unwilling to lower prices giving BSB
the price advantage