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Course name: Generic MBA

Subject name: Strategic Operations Issues

Subject facilitator: Michael Chant

(not applicable for Distance Learning students)

No. of pages: 15

Word count: 2518

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except where appropriately acknowledged, this assignment is my own work, has been
expressed in my own words, and has not previously been submitted for assessment.

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 ASSESSMENT SHEET
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COMMENTS
Principles used (for example, number and understanding of concepts referred to, their influence on the structure of this paper,
number and correct citations of references, use of appropriate jargon)

/4

Application of those principles, that is, the analysis and evaluation of the example problem based
on the principles, including the final recommendations and their justification

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(including the data) about it that was accessed

/4

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/2
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Title:

Strategic Operations Issues

Assignment Topic:

Using your own organisation or a local organisation that you know well, identify a strategic
operations issue or problem that needs to be addressed. This problem should be based on one
of the topics you have covered in this subject. Essentially, your task will be to:

a) Describe the organisation briefly, but well enough for the assignment examiner to
understand what the organisation does and its relevance to this assignment

b) Briefly explain the specific operational issue, problem or process that needs to be
addressed and provide clear details of its function within the organisation. For example, this
might include:

• a chart or process flow diagram to show the functional relationships of the process or
problem issue with the rest of the organisation’s workflow

• key objectives and purpose of the operation including your opinion of its current and ideal
performance (preferably supported by actual performance data)

• opportunities for change and improvement to the process or techniques being used now

• resource implications or constraints that need to be considered

• technologies and/or manpower issues involved in the process.

c) Analyse the problem using a concept covered in this subject (this should be the major part
of your work and your report). (If you believe it is appropriate, you can use more than one
concept from the subject but bear in mind the word limit mentioned below.) In analysing the
problem, you should consider:

• the five main performance objectives of operations management;

• changes to performance or outcomes (such as cost, output, quality, productivity etc);

• potential improvements that you believe can be made;

• relevant theory calculations where possible;

• where possible, any information about the costs involved

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d) Provide brief recommendations for improving the process or problem including
comparisons of your recommendations against the current system, and details of changes
needed to correct the problem or improve the situation. Bear in mind that your
recommendations should be potentially cost effective i.e. you must argue the changes from
the point of view of their potential to improve cost, quality, output, productivity etc. In other
words, do not just provide a ‘wish’ list of recommendations without considering their
practicality. ‘

Word Count:

2518

Executive Summary:

Process design focuses an organisation on the issues that can help them move more
strategically, they should be focused on generating a level of agreement and therefore
commitment from the members of an organisation that is necessary to move the business
forward.
The success of any group is based on its employees having a good understanding of the
company’s operations and the execution of its plans.
This assignment will look at the process design around the use of a social media by the Raine
& Horne Real Estate network in South Australia and analysis the need to better deliver quality
material in a cost effective manner.
The recommendation should be taken into consideration as the change recommended will
improve the groups’ communication whilst eliminating many time wasting elements therefore
improving customer relations and the groups’ operational efficiency.

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Table of Contents:

1. INTRODUCTION........................................................................................................... 1

2. BACKGROUND OF RAINE & HORNE SOUTH AUSTRALIA

2.1 Role of RHSA.................................................................................................. 6

2.2. Operational Issues of RHSA........................................................................... 6

3 OPERATIONAL ISSUES

3.1 Key Objectives & Measurement of Success.................................................... 8

3.2 Current Performance of Social Media Marketing............................................ 9

3.3 Opportunities for Change within Raine & Horne Morphett Vale.................... 9

3.4 Resource Implications...................................................................................... 9

4.0 ANALYSIS OF CURRENT SOCIAL MEDIA USE

4.1 Analysis against the Performance Objectives ............................................... 10

4.2 Potential Improvements................................................................................. 11

4.3 Theory Calculations....................................................................................... 12

5. RECOMMENDATIONS FOR IMPROVEMENT

5.1 Comparison Against the Current Situation........................................................... 12

5.2 Recommended Changes to Organisation Operations................................ 14

References ...................................................................................................................15

Appendices List...........................................................................................................15

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1. INTRODUCTION

This assignment will focus on the need to clearly define processes and look at how the
process design strategy can overcome operational issues of a growing company.

It will specifically look at examining the operational issues around having poorly defined and
described processes and the resulting operational issues caused.

For the purpose of this assignment, the organisation which will be used is the head office of
the Raine & Horne Real Estate Network in South Australia (RHSA).

The current operational systems of the RHSA head office have been developed over many
years but the systems and processes have never been formally recorded which has resulted in
different systems being used by the varies workers within the group as they each interpret the
job differently which has led to confusion and inhibited the growth of the company.

It will focus on one of the core areas of concern for RHSA and the South Australian network
and give recommendations for improving the process.

2. BACKGROUND OF RAINE & HORNE SOUTH AUSTRALIA

2.1 Role of RHSA

RHSA operate under a Licence Master Franchise Agreement to its parent company Raine &
Horne (Holdings) Pty Ltd which is located in Sydney, Australia.

RHSA head office is responsible for the group administration, training and the further
development of office network in South Australia. Currently there are 27 offices located
throughout the state of South Australia and the approximately 160 people employed within
group.

Although RHSA is part of a national network all the processes for operation are the sole issue
of the RHSA head office.

2.2. Operational Issues of RHSA

The operations of Raine & Horne South Australia are unique when compared to traditional
businesses. RHSA must look at delivering services to two levels of customers.

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The first customer is the franchisees of the RHSA network, the business owners who are
relying on the operations of the Raine & Horne network to deliver a whole brand awareness
and to deliver the systems they require to effectively and profitably operate their business.
These franchisees pay a fee to RHSA for this service and are actually the direct customer of
the RHSA services, for the purpose of the assignment, they will be referred to as our internal
customers.

The second level is the general consumer, the property owner who decides to either sell or
rent their investment by engaging the services of a local Raine & Horne Office, these are the
clients of our internal customers, for the purpose of the assignment and they will be referred
to as our external customers.

Both these levels of customers require totally different strategies in many different areas such
as marketing, operations and human resource planning, so if we apply input-transformation-
output model as described by Slack et al. (2012), pg 10, in the instance of RHSA the output
would deliver into two distinct sections. One for each consumer.

The main issue is the deliverability of services to both these levels of customers as they both
have vastly different requirements.

If we look at the traditional model of operations which has operated for many years, it is a
model where the day to day processes were governed by market demand, however these have
been deeply impacted by the changes in consumer habits primarily through the adaptation of
technology into real estate.

These changes have driven an urgent requirement for RSHA to analysis it current operations
and move to more efficient operations and processes to help ensure the long term and ongoing
success of the organisation.

Bloomberg (1994) talks on how as the general service industry itself is becoming much more
sophisticated and there is a need to focus more on improving productivity and also our
efficiency, the article emphasizes the importance and use of benchmarking as a way of
measuring the service and performance.

If we apply this as a way of measuring the effectiveness of the processes implemented, we

can measure their success against the industry and the market for both levels of customers.

One of core areas of concern for RHSA network and the focus for this assignment is the use
of social media to engage the end consumer, our external customer.

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Following an informal interview process with the majority of offices, and applying the Hayes
& Wheelright (1984) Four Stage Model and apply it to the use of social media within the
RHSA network and, it has been determined that the vast majority of offices are at stage one,
Internally Neutral, which is holding them back, this is due to a number of factors, which
include:

1. No defined social media marketing plan per office

2. Lack of understanding on commercial use of social media
3. Not enough time to create and maintain pages
4. Lack of resources/staff to effectively manage
5. Fear of use

In order to move through the stages mentioned in the Hayes & Wheelright (1984) Four Stage
Model in order to get to Stage Four where the system gives us and operational advantage, a
new process must be implemented which can address all this factors.

3 OPERATIONAL ISSUES

3.1 Key Objectives & Measurement of Success

The current key objectives of the Raine & Horne SA Network are to further develop the
network into second largest real estate network in South Australia whilst also delivering a
more value add services to our current Franchisees.

This added value is measured in a range of areas including but not limited to:

• Overall profitability of RHSA itself (current financial target of 10% growth above
the natural growth of the market)
• An average rise in the profitability of the individual franchised businesses within
the group of 10% per office
• Retention of 98% of the current staff and franchise members (This retention will
be through value added services, such as training, development and additional
marketing)

Through these measurements, it will be an increase in the external customers utilising the
services of our internal clients that will produce these desired targets. Part of this growth will
be due to increased engagement with the external client through the use of social media
marketing.

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9
3.2 Current Performance of Social Media Marketing

Following is a sample analysis of the current presence use of social media for the Raine &
Horne Morphett Vale Office focusing on their use of social media through the three top social
media platforms for the month of July 2014.

RAINE & HORNE MORPHETT VALE

Facebook Active Company Page

252 Page Likes - 16 Visits for the Month
16 Posts (5 Unique postings, 5 Property Listings, 6 Shared Links)
26 “Likes” for articles, average 2 “likes” per article

Twitter No Active Account

LinkedIn 10 Staff Members, two profiles online,

Zero engagement for month

3.3 Opportunities for Change within Raine & Horne Morphett Vale

From the above analysis, the online presence of the Morphett Vale office is very low and it’s
engagement with the external customers even lower. There is a definite opportunity to
increase the efficiently of their social media within this company. There was a similar result
that was reflected across the remaining 26 offices and their use of social media.

3.4 Resource Implications

Analysing the use of the offices social media and given the primary factors why the use of
social media was so low, the ongoing training needed in order to deliver the necessary levels
of staff training required within this office, would have a massive impact on the resources of
RHSA.

From the informal survey taken on the offices usual participation rates, the participation of
these staff members in past training and the ongoing uptake from the required staff members
is relatively low, therefore direct involvement from staff from RHSA will be necessary to
achieve the required involvement from the staff.

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Then in order to replicate the necessary level of training required across all 27 offices would
require involvement from RHSA which is well beyond the current resources of manpower
from RHSA.

The use of technology to deliver the information given the current, age, and demographic of
the staff requiring training itself would need training for these staff on how to use the new
technologies such as webinars and “go-to-meetings”, which again would have massive
implications on the resources of RHSA.

4.0 ANALYSIS OF CURRENT SOCIAL MEDIA USE

4.1 Analysis against the Performance Objectives

Using the five main performance objectives as set out by Slack et al. (2013), pg 43 to analysis
the current situation and effectiveness in regards to the use of social media by offices in the
Raine & Horne SA network.

CURRENT POSITION

Quality • Not engaging the public

• Not relevant
• Low engagement

Speed • No set structure for current situations (daily events etc.)

• No fast responses to comments

Dependability • No system for posting

• Very low chance of ongoing system

Flexibility • Changes depending on operator

• Similar postings of houses now variety of articles

Cost • Offices can’t afford time to allocate from other duties

• Require further training

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This analyses shows that the current levels of engagement obtained by the individual offices
is not effective or consistent.

4.2 Potential Improvements

Katona et al. 2014 emphasized that the social media is about communication not marketing. It
is core to the essence of social media marketing that you are engaging in a conversation not
just talking at your potential client.

As scheduling and resource allocation is a critical part of a successful social media campaign
as highlighted by Waddock & Graves (1997 p. 303) where they stated “strategic managers are
consistently faced with the decision of how to allocate scare corporate resources”

The real underlying area of issue for RHSA are based around what operations RHSA
undertakes on behalf of its Franchisees. The franchisees already pay a franchise fee for being
part of this national brand, a brand that is already being pushed by heaving marketing by its
head office.

This marketing traditionally has only been centered on pushing general awareness of the
“Raine & Horne” brand not the individual offices, however with the shift in the use of
technology, this potentially has shifted what services RHSA should provide to its franchisees.

As a master franchise, primarily RHSA main role is to provide the general operations manuals
and support for the group. In the past this has been limited around training, group marketing
and general business operations advice.

With the increase use of technology, there are now new areas of major concerns for all the
franchisees, primarily based around technology and its daily use.

As with most companies, Real Estate agencies are dealing with ever increasing pressure from
the external consumers for more information faster. This has resulted in the required response
times for enquiries dramatically decreasing, where five years ago an email enquiry, for
example, was expected to be answered within 24 hours, now these same external consumers
typically require a response in under 2 hours. This has put more pressure on individual offices
infrastructure such as computers, services and administrative help.

If we take an individual process perspective on the general tasks required for the day to day
operations of one of our offices and focus just on the operations functions itself, we can see

12
the collection of resources required to deliver a product, which in this case is the service
delivered by the salesperson.

Taking the process of social media marketing, we can look at applying the systems already
used by RHSA head office and look at utilising them across the offices in the network.

4.3Theory Calculations

Looking at the study conducted Yellow Social Media Report 2014 (refer Annexure A) it
highlights that a typical small business owner will allocated around 20% of their time, a day
or around 1.5 to 2 hours, which equates to approximately 8 hours per week just on social
media marketing. The study goes on to discuss as the size of the business increases this time
allocated can go up to around 65% of the time required, this time is usually taken from either
the office administrator/secretary or from the business owner themselves.

When we apply this average against the 27 offices currently within the RHSA network, this
represents approximately 216 hours spent per week across the group on social media
marketing and monitoring.

This represents neither a good use of resources nor a cost effective marketing method, as
typically, these people are not trained in effective use of social media.

5. RECOMMENDATIONS FOR IMPROVEMENT

5.1 Comparison against the Current Situation

Many professional service organisation have their unique challenges. These challenges can be
examined using the Schmenner Service Process Matrix (refer Figure 1) which provides four
quadrants to analysis an organisations need degree of labor intensity against the degree of
need interaction. (Verma and Boyer 2000).

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Figure 1 – The Service Process Matrix

Looking at this model, RHSA can be best described as ‘professional service’ which is
regarded as both a high degree of labor intensity and also a very high need for customer
customisation. The contributing factor of every home being unique and the individual
interaction with the consumer which means that ongoing social media marketing needs to
cater for the “mass” market, this is very similar to the work already undertaken by RHSA
head office as part of its generic brand awareness.

This brand awareness is an important part of the RHSA marketing process and in order for
our organisation to survive and develop in competitive markets and it is the base for
delivering customer value on both levels.

As previously discussed, the five strategic performance objectives of operations management:

Quality, Dependability, Speed, Flexibility and Cost (Slack et al., 2012) are very crucial with
regards to customer satisfaction and this can be seen on both levels of customers. If we
analysis the benefits of RHSA brand awareness program on social media using a similar
method as discussed previously:

RHSA POSITION

Quality • Professionally written articles

• Based on current events
• Encourage open discussion

Speed • Set social media marketing schedule including planning for daily

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 events
• Team of three to respond to customer queries

Dependability • Dedicated social media manager backed up by planned monthly

planning meetings

Flexibility • Set structure for posts on a range of subjects

Cost • Trained experienced staff

• Dedicated staff to deal with only social media

Currently many offices have the social media strategy process is done manually, where RHSA
head office have automated much of the process and if the key purposes of automation are to
achieve consistency and better integration with other technologies, then this model will
deliver the required result.

5.2 Recommended Changes to Organisation Operations

Looking at the strategic performance objectives around social media marketing for the Raine
& Horne SA network, moving the process of social media marketing for each office under the
umbrella of what is already conducted by RHSA for brand awareness would be the key
recommendation.

This simple step of streamlining the process to include all the individual offices under an
automated process linked to the RHSA system will engage more clients and have minimal
impact the operations of RHSA due to resources already being used to perform similar duties
but the guaranteed, planned marketing will still be the number one way to gain leads and
drive potential sales from external client interaction.

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REFERENCES

Blumberg, DF 1994, Strategic Benchmarking Of Service And Logistic Support

Operations, Journal Of Business Logistics, pp. 89-119

Hayes R & Wheelright S, 1984, Restoring our Competitive Edge; Competing

Through Manufacturing, Wiley, USA

Katona, Z, & Sarvary, M 2014, 'Maersk Line: B2b Social Media--"It's

Communication, Not Marketing"', California Management Review, 56, 3, pp. 142-
156,

Slack N., Jones A., Johnston R, Betts A, 2012, Operations and Process Management,
Principals and Practices for Strategic Impact, Third Edition, Pearson Education Ltd,
England

Ibid, Page 10

Ibid, Page 43

Verma, R. and Boyer, K. (2000) “Service Classification and Management

Challenges”, Journal of Business Strategies, Vol. 17, No. 1, pp. 5-24.

Waddock S & Graves S, 1997, The Corporate Social Performance-Financial-

Performance Link, Strategic Management Journal, Apr 1997, pp. 303-319

APPENDICES

A. Yellow Social Media Report 2014

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