Ivey Publishing

Service Management: Operations, Strategy and Information Technology

Fitzsimmons, J.A., Fitzsimmons, M.J.,3/e (United States, McGraw-Hill Irwin, 2001)
Prepared By Jacob Cho, Ph.D. Candidate (Production & Operations Management)
Chapter and Title Chapter Matches: Case Information
Chapter 1:
Role of Service in an Economy

Mark B. Vandenbosch, Ken Mark

Product Number: 9B02A021
Publication Date: 1/9/2003
Revision Date: 1/5/2004
Length: 12 pages

McDonald's, one of the world's strongest and most recognizable brands, intends to extend its world's best quick service restaurant experience brand into the hotel industry by launching a hotel in Illinois. An industry observer examines the hotel venture's positioning options and the McDonald's brand extension into a different product class.

Teaching Note: 8B02A21 (8 pages)
Industry: Accommodation & Food Services
Issues: Brand Management; Brand Extension; Market Analysis
Difficulty: 4 - Undergraduate/MBA

Chapter 2:
The Nature of Services

Michael R. Pearce

Product Number: 9B02A027
Publication Date: 2/6/2003
Revision Date: 10/29/2009
Length: 21 pages

The marketing director of a major multicultural arts and entertainment complex is reviewing many different market studies. His challenge lies in how to distinguish the centre's services from other discretionary purchases. He must resolve positioning, programming, communications, and fundraising issues prior to the upcoming launch. (A higher price applies to this case due to colour exhibits.)

Teaching Note: 8A96A01 (4 pages)
Industry: Arts, Entertainment, Sports and Recreation
Difficulty: 4 - Undergraduate/MBA

Chapter 3:
Service Quality

John S. Haywood-Farmer, Charles Dhanaraj

Product Number: 9A97D016
Publication Date: 1/12/1998
Revision Date: 2/3/2010
Length: 21 pages

The president of Joong-Ang Development Company was concerned with the level of service quality at Yongin Farmland, the company's theme park located just south of Seoul, South Korea. Despite the service quality program he had initiated since he assumed his present position 14 months ago, service quality seemed to be less than that of its competitors. He wondered if he had made the right moves, how Farmland could achieve international service quality standards, whether it would be worth doing, and if it would really provide a sustainable competitive advantage. This case and its companion (B) case, 9A97D017, are intended for use in a service quality module of a service management course.

Teaching Note: 8A97D16 (11 pages)
Industry: Arts, Entertainment, Sports and Recreation
Issues: Organizational Change; Services; Corporate Culture; Service Quality
Difficulty: 4 - Undergraduate/MBA

Robert Klassen, John S. Haywood-Farmer

Product Number: 9B00D024
Publication Date: 12/11/2000
Revision Date: 1/8/2010
Length: 12 pages

A regional director of donor services for the American Red Cross was wondering how to improve services to blood donors. Faced with an increasing number of complaints that donors were being held up in long lines at Red Cross' mobile blood collection operations - commonly termed bloodmobiles - she was considering several design alternatives for the blood collection process. Using the accompanying Extend run-time model (product #7B00D024), data file and structured assignment, students can explore changes in staffing assignments, donor registration and donor-bed configurations. For each alternative, a comparison is possible along a number of performance dimensions.

Teaching Note: 8B00D24 (9 pages)
Industry: Health Care Services
Issues: Non-Profit Organization; Service Quality; Service Operations; Simulation
Difficulty: 4 - Undergraduate/MBA

Chapter 4:
Service Strategy

Donald W. Barclay, Jack Wong

Product Number: 9B02A010
Publication Date: 7/23/2002
Revision Date: 10/28/2009
Length: 20 pages

TELUS Corporation is a leading telecommunications company. The vice-president of sales and marketing has reviewed the company's existing strategy for Mike (an enhanced specialized mobile radio system based on integrated digital enhanced network). As a unique digital wireless network, Mike offered users the traditional features of personal communication services, plus the added functionality of a digital two-way radio. However, technological advantages do not always translate into market advantages. In light of the dynamic changes in the wireless industry (such as the emergence of new technologies), the vice-president is faced with the challenge of defining a market strategy to grow TELUS's Mike business.

Teaching Note: 8B02A10 (6 pages)
Industry: Information, Media & Telecommunications
Issues: High Technology Products; Telecommunication Technology; Market Strategy; Marketing Planning
Difficulty: 4 - Undergraduate/MBA

Elizabeth M.A. Grasby, Aaron Anticic

Product Number: 9B02M042
Publication Date: 1/9/2003
Revision Date: 12/3/2009
Length: 10 pages

Planet Intra sold information management systems used to share information and data through a Web-based interface, giving the employees of an organization and its respective suppliers and customers access to the services. The chief executive had to determine what changes, if any, would be required to Planet Intra's overall strategy so that the venture capitalists funding the firm could achieve their desired return on investment. He must complete a valuation of the firm and formulate a detailed strategy by which the company can increase its sales and profits, becoming even more attractive to a potential purchaser.

Teaching Note: 8B02M42 (17 pages)
Industry: Administrative, Support, Waste Management and Remediation Services
Issues: Strategy Development; Business Valuation; Change Management; Venture Capital
Difficulty: 1 - Introductory

Chapter 5:
New Service Development and Process Design

Michiel R. Leenders, Robert Klassen, Natasha Ebanks

Product Number: 9B02D011
Publication Date: 9/20/2002
Revision Date: 11/9/2009
Length: 12 pages

ING Direct Canada is a retail banking operation and a subsidiary of one of the top global providers of integrated financial services, ING Group of the Netherlands. ING Direct Canada needs to meet the operational demands of a growing client base, while maintaining its current staffing levels, physical space and commitment to same-day processing of accounts. The senior vice-president of operations must implement procedures to cope with the immediate challenges of the company's growth, as well as develop a long-term strategy. Options to consider included new technology, increased efficiencies, or relaxing the same day processing requirements.

Teaching Note: 8B02D11 (15 pages)
Industry: Finance and Insurance
Issues: Process Analysis; Process Design/Change; Service Operations; Scheduling
Difficulty: 4 - Undergraduate/MBA

Chapter 6:
The Supporting Facility

John S. Haywood-Farmer, Tim Silk

Product Number: 9A99D013
Publication Date: 12/1/1999
Revision Date: 5/27/2015
Length: 8 pages

The Mongolian Grill is a concept restaurant faced with a decision of whether to expand its capacity. The manager's objective is to optimize the restaurant's profitability without compromising the dining experience of its customers. This case is intended to introduce students to operations issues in a service environment (as opposed to a manufacturing environment). The concept of line balancing is central to the case. The case is also intended to explore capacity expansion issues and to demonstrate how expansion options can affect capacity, profitability and service quality. The case requires students to conduct a quantitative analysis of capacity and profitability while evaluating possible negative effects on service quality.

Teaching Note: 8A99D13 (5 pages)
Industry: Accommodation & Food Services
Issues: Service Quality; Capacity Analysis; Bottlenecks; Service Operations
Difficulty: 2 - Intro/Undergraduate

Chapter 7:
Service Facility Location

P. Fraser Johnson

Product Number: 9B02D003
Publication Date: 3/28/2002
Revision Date: 1/17/2006
Length: 7 pages

As Canada's largest direct online grocer, Grocery Gateway provided home delivery to approximately 125,000 customers in the Greater Toronto area, which covered a territory of approximately 3,200 square kilometres. Grocery Gateway's management staff was concerned that the company had been met only 67 per cent of its target of making four deliveries per hour. Consequently, the vice-president of industrial engineering and operations had been asked to make some recommendations aimed at improving delivery operations. These recommendations would be presented at Grocery Gateway's next weekly management meeting. There are a number of options that were worth considering. The vice-president's job was to pinpoint those options and assess how each one might affect the company's existing operation. The final choice would have to reflect and maintain Grocery Gateway's focus on low cost and high service.

Teaching Note: 8B02D03 (8 pages)
Industry: Administrative, Support, Waste Management and Remediation Services
Issues: Transportation; Distribution; E-Business; Logistics
Difficulty: 4 - Undergraduate/MBA

Chapter 8:
The Service Encounter

Carol Prahinski, John S. Haywood-Farmer, David Wright, Kevin Saskiw

Product Number: 9B02D024
Publication Date: 1/10/2003
Revision Date: 11/30/2009
Length: 15 pages

Quinte MRI is a small service provider of medical diagnostic technologies. After just six weeks in operation at a medical centre, the company developed an extensive waiting list, and physicians began referring patients to competing facilities. Quinte MRI's business development coordinators must provide recommendations and an action plan to deal with this process and productivity problem in a setting with extreme variability.

Teaching Note: 8B02D24 (22 pages)
Industry: Health Care Services
Issues: Bottlenecks; Scheduling; Process Analysis; Capacity Analysis
Difficulty: 4 - Undergraduate/MBA

Chapter 9:
Internet Service

Sid L. Huff, Mike Wade

Product Number: 9A98E010
Publication Date: 4/23/1998
Revision Date: 1/27/2010
Length: 14 pages

Scandinavia Translations (Scantran) provides translation services between English and the three Scandinavian languages (Danish, Swedish and Norwegian), as well as Finnish. The business is operated primarily by a husband and wife team. The unique thing about Scantran is that it is a purely virtual business: they never meet with, see, and rarely even speak with any of their clients, nor with any of their individual translators. Almost all the business is done over the Internet, supplemented by faxes and occasionally the telephone. Documents are mainly transferred as file attachments to Internet electronic mail messages. There are no other permanent employees, and all the work is done out of the couple's apartment, with no need for expensive overhead such as office premises or fixed salaries. Scantran's business has grown rapidly since its inception, and is faced with a number of decisions: Can the company maintain the great flexibility provided by the Internet, and still expand? If the decision is to grow, what should the new business model be? This case nicely illustrates both pros and cons of virtual small businesses, typical of a great many Internet-dependent startup companies created in recent years.

Teaching Note: 8A98E10 (7 pages)
Industry: Administrative, Support, Waste Management and Remediation Services
Issues: Translation Services; Internet; E-Commerce; Virtual Business
Difficulty: 4 - Undergraduate/MBA

Michael R. Pearce, Neal Costello, Michael Hall, Lindsay Nicholl

Product Number: 9B02A014
Publication Date: 7/22/2002
Revision Date: 10/28/2009
Length: 11 pages

Three years after launching a content-based Web site, a nationwide hard goods retailer invested in software to support Internet shopping. The online component was one element in a multiple channel retailing approach, which also included retail stores, a phone-order service and an annual catalog. Although the company is the country's most shopped retailer, the online retail segment has not turned a profit. The director of marketing must consider the effect of multiple channel retailing on the company's profitability.

Industry: Retail Trade
Issues: Distribution Channels; E-Business; Retailing; Internet Marketing
Difficulty: 4 - Undergraduate/MBA

Chapter 10:
Forecasting Demand for Service

Elizabeth M.A. Grasby, Jannalee Blok

Product Number: 9A98D010
Publication Date: 11/5/1998
Revision Date: 1/27/2010
Length: 6 pages

In early January 1998, the co-owners/photographers of Off Broadway Photography, were reviewing the company's year-end financial statements. Although profit levels were up from last year, sales were down. To improve both their sales and profit levels, the partners were considering three options; purchasing bulk film, outsourcing black and white film development, and changing the proof format. Students need to assess the company's current customer requirements and what is important to them, the company's current activities as to both efficiency and effectiveness and how the company could become more efficient, and therefore more profitable. The tradeoffs presented require both quantitative and qualitative analysis.

Teaching Note: 8A98D10 (12 pages)
Industry: Other Services
Issues: Process Analysis; Service Operations; Consumer Analysis; Tradeoff Analysis
Difficulty: 3 - Undergraduate

Chapter 12:
Queuing Models and Capacity Planning

Victor Siu, Chris K. Anderson, Stephan Vachon

Product Number: 9B00D007
Publication Date: 5/2/2000
Revision Date: 1/8/2010
Length: 7 pages

An assistant manager of a university student residence is aware that there are capacity and service problems in the cafeteria. Long waits in line were common, and he hoped to propose some improvements to residence management, preferably ones with no major investments or disbursements involved.

Teaching Note: 8B00D07 (9 pages)
Industry: Accommodation & Food Services
Issues: Service Operations; Queuing Theory; Simulation
Difficulty: 4 - Undergraduate/MBA

Chapter 13:
Managing Capacity and Demand

P. Fraser Johnson, Robert Klassen, John S. Haywood-Farmer

Product Number: 9B00D003
Publication Date: 3/29/2000
Revision Date: 1/29/2002
Length: 7 pages

American Airlines is a widely cited leader in the development and implementation of yield management practices. This case is based on a training exercise used at American Airlines to introduce managers to their yield management system. Participants are given the responsibility for a single flight from Dallas-Fort Worth, Texas to Miami, Florida and are required to make a series of sequential booking decisions in real time. The objective of the exercise is to maximize total revenue for the flight, after taking into account no-shows and penalties. De-briefing following the exercise provides an opportunity to discuss both the strategic and tactical issues that arise when applying yield management systems in service firms. The case is designed for use in a service management elective course or in a service operations course and is intended to expose students to yield management by giving them hands-on experience managing bookings for a flight. The game takes approximately 50 minutes to play, leaving approximately 30 minutes for class discussion. Ideally, a supplemental reading dealing with yield management should be assigned with the case in order to provide background theory on yield management and to describe the complexities of a yield management system.

Teaching Note: 8B00D03 (20 pages)
Industry: Transportation and Warehousing
Issues: Planning; Pricing Strategy; Capacity Analysis; Services
Difficulty: 4 - Undergraduate/MBA

Chapter 14:
Managing Facilitating Goods

Hart Posen

Product Number: 9A99D010
Publication Date: 9/30/1999
Revision Date: 1/14/2010
Length: 5 pages

A purchasing specialist at Oracle The Assistance Group, a fast-growing London (Ontario)-based firm, was asked by her supervisor to look into alternative warehousing solutions to resolve the firm's problems with inventory storage. She knew that action would have to be taken soon, since the existing facilities were stretched to capacity and the potential addition of a new client would cause serious inventory management problems.

Industry: Administrative, Support, Waste Management and Remediation Services
Issues: Inventory; Purchasing
Difficulty: 2 - Intro/Undergraduate

Chapter 15:
Service Supply Chain Management

P. Fraser Johnson

Product Number: 9B01D014
Publication Date: 3/28/2002
Length: 4 pages

With revenues of over US$1 billion, UPS Logistics Group was a wholly owned subsidiary of United Parcel Service, which offered a full range of supply chain services in North America, Europe, Asia and Latin America. UPS Logistics was responsible for distribution in Eastern Canada for the Canadian Pharmaceutical Distribution Network, an association of pharmaceutical manufacturers that jointly distribute products to hospital pharmacies. Members of this association are unhappy with the current performance of the supply chain, and have asked UPS Logistics' general manager for operations to establish a set of key performance indicators for the network's distribution operations. The general manager must determine how the logistics would be measured before setting specific improvement targets.

Teaching Note: 8B01D14 (14 pages)
Industry: Health Care Services
Issues: Performance Measurement; Outsourcing; Logistics; Distribution
Difficulty: 4 - Undergraduate/MBA

John Kamauff, Sara Allan

Product Number: 9A95D021
Publication Date: 5/13/1996
Revision Date: 10/23/2008
Length: 18 pages

This case demonstrates how forming strategic partnerships with suppliers and clients can lead to win-win-win situations in the supply chain. It can be used to discuss the importance of information sharing and the use of information technology to drive the direction of the individual relationships. It also shows how cultivating partnerships can result in a competitive advantage in a highly competitive service industry. Techniques for developing and maintaining such a relationship are also brought out in the case, and it provides an opportunity to focus on the key concepts of supply chain management as they apply to service industries.

Teaching Note: 8A95D21 (3 pages)
Industry: Administrative, Support, Waste Management and Remediation Services
Issues: Customer Relations; Management in a Global Environment; Supplier Relations; Supplier Selection
Difficulty: 4 - Undergraduate/MBA

Chapter 16:
Managing Service Projects

Sid L. Huff, David Keane, Tracey Priest, Jane Farley

Product Number: 9A99E008
Publication Date: 6/4/1999
Revision Date: 1/15/2010
Length: 20 pages

The National Library of New Zealand, based in Wellington, had launched a large project to redevelop the computer systems it used for interfacing with its customers. Because of the expense involved, it had decided to undertake the project jointly with the Australian National Library. The general idea underlying the National Document Information Service project was to allow library users to access library information holdings electronically, so that as many people as possible could utilize library information resources without having to physically come to the library itself. During the design phase of the project, the worldwide web emerged as a new kind of universal interface, causing the designers to pause and rethink the system's architecture with the web in mind. The National Document Information Service project also gave rise to numerous organizational and managerial issues within the library itself. This case draws the reader's attention to the emergence of digital libraries, and the many challenges real libraries face as they try to embrace the electronic future.

Teaching Note: 8A99E08 (9 pages)
Industry: Educational Services
Issues: Project Management; Internet; Digital Libraries
Difficulty: 4 - Undergraduate/MBA

Robert Klassen, P. Fraser Johnson

Product Number: 9A98D012
Publication Date: 8/5/1998
Revision Date: 8/4/1999
Length: 10 pages

The basics of project management are described and applied to a simple tutorial problem. The steps for project management, as well as the calculation of the critical path, using CPM, are presented.

Issues: Project Management
Difficulty: 4 - Undergraduate/MBA

Chapter 17:
Linear Programming Applications in Service

Peter C. Bell

Product Number: 9A99E018
Publication Date: 6/16/1999
Revision Date: 1/15/2010
Length: 3 pages

The executive director of the Canadian Medical Hall of Fame and the outreach coordinator for the Faculty of Science at the University of Western Ontario had to allocate conference spaces for about 300 students to a series of sessions highlighting and demonstrating various research actives. Space limitations meant that not all students could attend the same topics, so the task was to allocate students to the sessions in an attempt to satisfy the majority of requests. This mathematical programming exercise allows use of a relatively simple formulation to initially solve the problem, followed by attempts to include some elements of subjective fairness in the final assignment of conference slots. (A Microsoft Excel model is available for use with this case, product 7A99E018.)

Teaching Note: 8A99E18 (6 pages)
Industry: Educational Services
Issues: Linear Programming; Scheduling; Spread Sheet Application; Resource Allocation
Difficulty: 4 - Undergraduate/MBA

Peter C. Bell

Product Number: 9B00E004
Publication Date: 5/9/2000
Revision Date: 1/8/2010
Length: 6 pages

The Hooker Group, a major Australian property developer, is in liquidation owing a significant amount to external creditors. The administrator of the liquidation of the 27 companies in the Hooker Group must decide how to share the available assets of these 27 companies among the creditors. The situation is complicated by the fact that the 27 companies have all signed a deed of cross-guarantee under which they accept all responsibility for the liabilities of all companies in the group. (A Microsoft Excel model is available for use with this case, product 7B00E004.)

Teaching Note: 8B00E04 (10 pages)
Industry: Real Estate and Rental and Leasing
Issues: Bankruptcy; Forensic Accounting; Linear Programming; Spread Sheet Application
Difficulty: 4 - Undergraduate/MBA

Chapter 18:
Productivity and Quality Improvement

P. Fraser Johnson, Mark Sheppard

Product Number: 9B00D016
Publication Date: 10/20/2000
Revision Date: 10/18/2002
Length: 20 pages

Blue Mountain Resorts had been driving its business with a service quality program for several years, which the vice-president of human resources was responsible for coordinating. With a new ski season underway, and the critical Christmas season approaching, he wanted to continue progress of the program by introducing a new set of initiatives. He had recently gathered together a team of Blue Mountain Resort managers, from a variety of different areas in the company, to identify opportunities to improve service quality. The group provided three proposals that he felt warranted consideration. At the upcoming executive team meeting, he would be expected to set the priorities for the coming year and recommend what action, if any, should be taken for each. He had to decide which programs made the most sense for immediate action and which ones required additional study and analysis. Each of the proposals affected different parts of the organization, so he also needed to be concerned about who else in the company should be involved in further evaluation and implementation.

Teaching Note: 8B00D16 (14 pages)
Industry: Arts, Entertainment, Sports and Recreation
Issues: Continuous Improvement; Cost/Benefit Analysis; Service Operations; Service Quality
Difficulty: 4 - Undergraduate/MBA

Chapter 19:
Growth and Expansion

Kenneth G. Hardy, Ken Mark

Product Number: 9B01A006
Publication Date: 3/5/2001
Revision Date: 12/4/2009
Length: 16 pages

AWARD WINNING CASE - This case was one of the winning cases in the 2001 Regional Asia-Pacific Case Writing Competition. Beijing Toronto International Hospital was a new private facility being built in Beijing that would offer a full range of general and specialized Western-quality medical services to a very specific market segment: expatriates and wealthy Chinese families. Membership cards were sold that entitled each member to a distinct level of hospital service. The chief executive officer found that as the building neared completion, only a few memberships had been sold which resulted in a cash shortage. He did not know why sales failed to materialize as expected, but felt that he must redirect and revitalize the marketing campaign. He considered several options and had to determine what would work best in the Chinese market.

Teaching Note: 8B01A06 (9 pages)
Industry: Health Care Services
Issues: China; International Marketing; Market Entry; Health Administration; Market Strategy
Difficulty: 4 - Undergraduate/MBA

Elizabeth M.A. Grasby, Joanne Drouillard

Product Number: 9B00M021
Publication Date: 8/31/2000
Revision Date: 1/11/2010
Length: 18 pages

The part owner and general manager of Hidden River Golf Club must prepare for a shareholders' meeting where he will present an overview of the club's financial health and his recommendations on three key issues: whether or not to expand the nine-hole course to 18 holes; the pricing scheme for the upcoming golfing season; and whether to keep or eliminate seasonal golf memberships. Students will be exposed to the usefulness of analytical tools such as the statement of changes in financial position, ratio analysis, cost behavior, and projected statements. They will also see how in-depth analysis is required before any decisions can be made or potential opportunities exploited, and that differential analysis, as a management tool, can aid in decision making.

Teaching Note: 8B00M21 (24 pages)
Industry: Arts, Entertainment, Sports and Recreation
Issues: Strategic Planning; Financial Analysis; Expansion
Difficulty: 1 - Introductory