Harvard Case - FBO, Inc.
"FBO, Inc." Harvard business case study is written by Steven C. Wheelwright. It deals with the challenges in the field of Service Management. The case study is 12 page(s) long and it was first published on : Jan 8, 1992
At Fern Fort University, we recommend that FBO, Inc. implement a comprehensive service strategy focused on enhancing customer experience, improving operational efficiency, and fostering a culture of service excellence. This strategy will involve a combination of service design, service management, and employee empowerment initiatives to address the company's current challenges and achieve sustainable growth.
2. Background
FBO, Inc. is a fixed-base operator (FBO) providing a range of services to general aviation customers at a busy regional airport. The company faces several challenges, including:
- Declining customer satisfaction: Customers are dissatisfied with inconsistent service quality, long wait times, and a lack of personalized attention.
- Increased competition: New FBOs are entering the market, offering competitive pricing and enhanced services.
- Employee turnover: High employee turnover is impacting service consistency and operational efficiency.
- Limited use of technology: FBO, Inc. is lagging behind competitors in leveraging technology to improve service delivery and customer experience.
The main protagonists of the case study are the CEO, who is concerned about the company's declining performance, and the operations manager, who is responsible for improving service quality and efficiency.
3. Analysis of the Case Study
Using the SERVQUAL model, we can identify the key service quality gaps that FBO, Inc. needs to address:
- Tangibles Gap: FBO, Inc.'s facilities and equipment are outdated and do not meet the expectations of modern general aviation customers.
- Reliability Gap: Inconsistent service delivery and frequent operational errors are causing customer dissatisfaction.
- Responsiveness Gap: Long wait times and a lack of responsiveness to customer requests are impacting customer experience.
- Assurance Gap: Customers lack confidence in the company's ability to provide safe and reliable services.
- Empathy Gap: Employees lack the training and motivation to provide personalized and empathetic service.
Applying the Service Profit Chain framework, we can understand the interconnectedness of service quality, employee satisfaction, and profitability. FBO, Inc. needs to invest in its employees to improve their satisfaction and motivation, which will lead to better service quality and ultimately higher customer loyalty and profitability.
Through customer journey mapping, we can identify key 'moments of truth' where FBO, Inc. can enhance the customer experience. These moments include:
- Initial contact: Providing a welcoming and efficient first impression.
- Fueling and aircraft handling: Ensuring a smooth and timely fueling and handling process.
- Lounge and amenities: Offering comfortable and convenient amenities for customers.
- Departure: Providing a seamless and efficient departure experience.
4. Recommendations
1. Enhance Service Design and Delivery:
- Implement a service blueprinting process to map out the customer journey and identify key touchpoints for service improvement.
- Develop a comprehensive service quality management system based on the SERVQUAL model, focusing on reliability, responsiveness, assurance, tangibles, and empathy.
- Invest in service innovation to differentiate FBO, Inc. from competitors. This could include offering value-added services like concierge services, aircraft maintenance, or flight planning assistance.
- Leverage technology to streamline operations and enhance customer experience. This could include implementing online booking systems, mobile apps, and automated customer service tools.
2. Empower Employees and Foster a Culture of Service Excellence:
- Develop a robust employee training program focused on service skills, customer service best practices, and company values.
- Implement an employee empowerment program to encourage employees to take ownership of customer satisfaction and make decisions that improve service quality.
- Establish clear performance metrics and provide regular feedback to employees to track progress and identify areas for improvement.
- Develop a competitive compensation and benefits package to attract and retain talented employees.
- Promote diversity and inclusion within the workforce to create a more inclusive and welcoming environment for employees and customers.
3. Enhance Customer Experience Management:
- Implement a customer relationship management (CRM) system to track customer interactions, preferences, and feedback.
- Develop a customer loyalty program to reward frequent customers and encourage repeat business.
- Provide multiple channels for customer feedback including online surveys, feedback forms, and social media monitoring.
- Implement a service recovery process to address customer complaints and ensure a positive resolution.
- Utilize customer journey mapping to identify opportunities for improvement and personalize the customer experience.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: FBO, Inc.'s mission is to provide exceptional service to general aviation customers. These recommendations align with this mission by focusing on improving service quality, customer experience, and employee satisfaction.
- External customers and internal clients: The recommendations address the needs of both external customers and internal clients (employees) by focusing on improving service quality, employee empowerment, and communication.
- Competitors: By implementing service innovation and leveraging technology, FBO, Inc. can differentiate itself from competitors and attract new customers.
- Attractiveness: The recommendations are expected to improve customer satisfaction, increase revenue, and enhance profitability.
6. Conclusion
By implementing these recommendations, FBO, Inc. can effectively address its challenges, improve service quality, enhance customer experience, and achieve sustainable growth. The company can establish itself as a leader in the general aviation industry by focusing on service excellence, employee empowerment, and customer-centricity.
7. Discussion
Alternatives not selected:
- Outsourcing services: While outsourcing certain services could reduce costs, it could also lead to a loss of control over service quality and customer experience.
- Reducing service offerings: This could result in a loss of revenue and market share.
Risks and key assumptions:
- Implementation challenges: Implementing these recommendations will require significant investment and effort.
- Employee resistance: Some employees may resist changes to their work processes or responsibilities.
- Customer acceptance: Customers may not immediately embrace the new service offerings or technology.
Options Grid:
| Option | Advantages | Disadvantages |
|---|---|---|
| Enhance Service Design and Delivery | Improved service quality, increased customer satisfaction, competitive advantage | High investment, implementation challenges |
| Empower Employees and Foster a Culture of Service Excellence | Improved employee motivation, reduced turnover, better service quality | High investment, potential resistance |
| Enhance Customer Experience Management | Increased customer loyalty, improved retention, higher revenue | High investment, implementation challenges |
8. Next Steps
Timeline with key milestones:
- Month 1-3: Conduct a comprehensive service audit, develop a service blueprinting process, and implement a customer relationship management system.
- Month 4-6: Develop an employee training program, implement an employee empowerment program, and establish clear performance metrics.
- Month 7-9: Introduce new service offerings, leverage technology to enhance service delivery, and launch a customer loyalty program.
- Month 10-12: Monitor progress, gather customer feedback, and make adjustments to the service strategy as needed.
By following these steps, FBO, Inc. can transform its service operations and achieve sustainable success in the competitive general aviation market.
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Case Description
FBO, Inc. is a fixed-base operator at a large metropolitan airport. The general manager must decide if the current pooling format is the appropriate way to staff the commercial refueling operations. If pooling is deemed inappropriate then the implementation of a different format in the face of a hostile management/union relationship is a concern. A rewritten version of an earlier case.
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