This paper focuses on the issues faced by the operations managers related to the production of the products and its distribution to the final customers. Chicken Cottage is the chosen organisation. The study of its operational challenges help in illustrating the impact of such issues upon the business of the selected organisation. Chicken cottage is one of the fastest growing UK based fast food brand. Since its introduction in 1994 with its first store in London, Chicken Cottage has grown to become a global brand with more than 100 outlets in the UK and a number of fast food restaurants in Canada, India, Pakistan, Middle East and Slovakia (Stephenson, 2014). The offerings of Chicken Cottage are different from that of the commonly sighted items in any fast food restaurants which contributes to its competitive advantage among the high-street rivals. The menu has been designed in such a way that it caters to the appetite of all the members of the community.
Chicken cottage is a joint venture company, where 30% shares belong to Global Food Brands Inc. and the remaining 70% is acquired by Terengganu Inc. Sdn Bhd (a government-link company of Malaysia) (Chicken Cottage, 2016a). Outlets of Chicken Cottage offers a more than just a quick service in related to food, but provides for a more homely atmosphere where families can bond over a nice meal (Marketing Week, 2010). Chicken Cottage upholds the characteristics of a large chain while preserving individuality of each restaurant (Chicken Cottage, 2016b).
Over the years, the fast food industry has grown in leaps and bounds with the increase in the frequency of visits by the consumers, making the industry one of the prime focuses of the researchers. In 2015, almost 27% of people who were surveyed, have revealed that they have visited fast food restaurants more than once in a week, presenting opportunities for the fast-food restaurants to earn profitable returns (Statista, 2016a). This has also created intensified competition for the existing organisations within the industry, which can be better reflected from the figures below.
Figure 1: Frequency of fast-food restaurants visit in 2015
(Source: Statista, 2016a)
The greatest competitors of Chicken Cottage are McDonald’s, KFC and Subway who occupies the top positions in the customers’ preference rankings with its increasing number of outlets around the world.
Figure 2: Customers' Ranking of Fast-Food Brands
(Source: Statista, 2016b)
Market order and qualifiers play an important role in deciding the competitive characteristics of a company. In order to become a market qualifier, a suppliers needs to offer the services or fulfil the criteria just as its rivals; whereas to acquire the position of a market winner, a producer is required to supply more than what its rivals are offering. A market order winner first needs to fulfil the criteria of being an order qualifier, then it should direct its resources to become a market winner (Palmer, 2010). The market order winners and qualifiers for Chicken cottage are illustrated below.
Figure 3: Market order-winners and Market qualifiers of Chicken Cottage
(Source: BBC News, 2014; Chicken Cottage, 2016c)
The order qualifiers and order winning characteristics contribute to the success of the organisation; whereas, order losers prevent Chicken Cottage from expanding its market presence. For example, its uniquely prepared chicken dishes attract more customers who are experimental with their food, and prefer a little spice. Conversely, in order to practice competitive pricing, there have been issues related to the raw materials (i.e., raw chicken) and cleanliness which has become one of the main concerns of the operations managers.
The supply chain management (SEM) of Chicken Cottage, which involves manufacturing and distribution of the food products to the customers, is entirely based on a simple rule of franchising unlike, the SEM of many large-scale food restaurants like McDonald’s, KFC, etc. Under the SEM of Chicken Cottage, there is a producer and a number of retail outlets, which contribute to the generation of the entire revenue of the company. Under the franchising system of Chicken Cottage, it provides the right to sell products under its name; whereas, the cost of setting up the business is borne by the franchisees starting from hiring of employees to making decisions related to daily business operations. The senior management of the company helps in setting up the entire business unit by providing the necessary training and knowledge support. This renders the individualistic approach of each store, in spite of belonging to a global chain of fast-food restaurants. The infrastructure and service delivery of Chicken Cottage are the two main pillars supporting the brand name of the company. However, this is the source of trouble for the company as the faults of the franchise lead to the loss of Chicken Cottage. For example, many stores were ranked poor in terms of management quality of services. The operations managers are not able to control the vast network of franchise leading to such issues (BBC News, 2014).
Figure 4: Value Chain of Chicken Cottage
Finance, License Fees, Technical Support and Advertising
(Source: Chicken Cottage, 2016a)
Findings and Conclusion
The operation of Chicken Cottage can be divided in two parts:
The franchisees which own the right of operating their own business deciding upon their own value chain for achieving the success.