Harvard Case - Mall of America
"Mall of America" Harvard business case study is written by Elizabeth A. Powell, Sheila McMillen. It deals with the challenges in the field of Service Management. The case study is 10 page(s) long and it was first published on : Jun 18, 1997
At Fern Fort University, we recommend that the Mall of America (MOA) focus on enhancing its customer experience through a comprehensive strategy that leverages service innovation, employee empowerment, and technology-enabled services. This strategy should aim to differentiate MOA from competitors, strengthen its brand and drive customer loyalty.
2. Background
The Mall of America, located in Bloomington, Minnesota, is the largest shopping mall in the United States, attracting over 40 million visitors annually. It features over 520 stores, an amusement park, an aquarium, and numerous entertainment options. The case study highlights the challenges MOA faces in maintaining its competitive advantage in a rapidly evolving retail landscape.
The main protagonists of the case study are the MOA management team, who are tasked with developing strategies to address declining foot traffic, increasing online competition, and changing consumer preferences.
3. Analysis of the Case Study
The analysis of the case study can be structured using the Service Profit Chain framework, which emphasizes the link between employee satisfaction, customer loyalty, and profitability.
Internal Service Quality:
- Employee Empowerment: MOA has a history of employee empowerment, but it needs to be further strengthened. This can be achieved through clear service level agreements (SLAs), regular employee performance management, and providing employees with the necessary training and resources to deliver exceptional service.
- Employee Incentives: MOA should implement a robust employee incentive program that rewards employees for exceeding customer expectations and contributing to overall service quality.
- Diversity and Inclusion: Creating a diverse and inclusive work environment fosters a sense of belonging and can lead to improved service quality. MOA should actively promote diversity initiatives and ensure that all employees feel valued and respected.
External Service Quality:
- Service Quality Gaps Model: MOA should conduct a thorough analysis using the Service Quality Gaps Model to identify discrepancies between customer expectations and perceived service quality. This will help identify areas for improvement.
- Service Blueprinting: Developing a comprehensive service blueprint for all customer touchpoints will help MOA visualize the entire customer journey and identify opportunities for service innovation and improvement.
- Customer Journey Mapping: By mapping the customer journey, MOA can identify key moments of truth where customers form impressions about the mall. This will help focus efforts on enhancing these critical interactions.
- Service Recovery: MOA should implement a robust service recovery system to address customer complaints and service failures effectively. This will demonstrate a commitment to customer satisfaction and help build trust.
Customer Loyalty:
- Customer Relationship Management (CRM): MOA should leverage CRM systems to gather customer data and personalize interactions. This will allow for targeted marketing campaigns and improved customer service.
- Customer Loyalty Programs: Implementing a loyalty program that rewards repeat customers can significantly increase customer retention and drive revenue.
- Customer Feedback Management: MOA should actively solicit and analyze customer feedback through surveys, online reviews, and social media monitoring. This will provide valuable insights into customer preferences and areas for improvement.
Financial Performance:
- Service Productivity: MOA should focus on improving service productivity by streamlining processes, optimizing resource allocation, and leveraging technology.
- Service Portfolio Management: MOA should carefully evaluate its service offerings and prioritize those that contribute most to customer satisfaction and profitability.
- Service Differentiation Strategies: MOA needs to differentiate itself from competitors by offering unique services and experiences. This could include unique events, partnerships with local businesses, or personalized shopping experiences.
4. Recommendations
Enhance Service Quality:
- Implement a comprehensive service quality improvement program that focuses on employee empowerment, training, and customer feedback.
- Develop a service blueprint to map the customer journey and identify opportunities for improvement.
- Implement a robust service recovery system to address customer complaints and service failures effectively.
Embrace Technology:
- Invest in technology-enabled services to enhance the customer experience, such as mobile apps, digital wayfinding, and online shopping options.
- Leverage self-service technologies to improve efficiency and customer satisfaction.
- Explore service modularity to offer customizable experiences and cater to individual customer preferences.
Foster Employee Empowerment:
- Implement a comprehensive employee empowerment program that provides employees with the authority and resources to make decisions and solve customer issues.
- Develop a strong service culture that emphasizes customer service excellence.
- Implement a robust employee incentive program to reward employees for exceeding customer expectations.
Strengthen Brand and Customer Loyalty:
- Develop a clear and compelling service value proposition that highlights the unique benefits of shopping at MOA.
- Implement a comprehensive customer relationship management (CRM) system to gather customer data and personalize interactions.
- Launch a customer loyalty program that rewards repeat customers and encourages repeat visits.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: The recommendations align with MOA's core competencies in retail and entertainment, while also supporting its mission to provide a unique and memorable shopping experience.
- External Customers and Internal Clients: The recommendations address the needs of both external customers and internal clients (employees) by focusing on customer satisfaction, employee empowerment, and improved service quality.
- Competitors: The recommendations aim to differentiate MOA from competitors by focusing on service innovation, technology-enabled services, and a strong customer loyalty program.
- Attractiveness: The recommendations are expected to improve customer satisfaction, increase foot traffic, and drive revenue growth.
6. Conclusion
By implementing these recommendations, MOA can enhance its customer experience, strengthen its brand, and drive customer loyalty. This will help MOA maintain its competitive advantage in a rapidly evolving retail landscape and ensure its continued success.
7. Discussion
Other Alternatives:
- Focus solely on online retail: While this could be a viable option, it would require significant investment and potentially alienate existing customers who prefer the in-person shopping experience.
- Lowering prices: This could attract price-sensitive customers but could also damage the brand image and reduce profit margins.
Risks and Key Assumptions:
- Implementation challenges: Implementing these recommendations will require significant investment and effort, and there is a risk of encountering resistance from employees or management.
- Changing consumer preferences: Consumer preferences are constantly evolving, and there is a risk that the recommendations may become outdated or ineffective over time.
Options Grid:
| Option | Benefits | Risks |
|---|---|---|
| Enhance Service Quality | Improved customer satisfaction, increased foot traffic, improved brand image | Implementation challenges, potential for resistance from employees or management |
| Embrace Technology | Enhanced customer experience, improved efficiency, reduced costs | High initial investment, potential for technical challenges |
| Foster Employee Empowerment | Improved service quality, increased employee motivation, reduced turnover | Potential for abuse of power, need for clear guidelines and monitoring |
| Strengthen Brand and Customer Loyalty | Increased customer retention, higher revenue, improved brand image | Potential for negative feedback from customers, need for careful planning and execution |
8. Next Steps
- Develop a detailed implementation plan: This plan should include specific timelines, budgets, and key milestones for each recommendation.
- Communicate the plan to employees and stakeholders: Ensure that everyone is aware of the changes and their potential impact.
- Pilot test new initiatives: Before rolling out new initiatives on a large scale, pilot test them with a smaller group of customers and employees to gather feedback and make adjustments.
- Continuously monitor and evaluate progress: Regularly track key performance indicators (KPIs) to measure the impact of the recommendations and make necessary adjustments.
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Case Description
The Mall of America's public relations manager considers whether to institute an escort policy aimed at curbing the disruptive behavior of some teenagers who frequent the Mall. Support for the policy is mixed. Mall visitors and merchants are generally in favor of the policy, while teens, some community residents, and activists argue that it is too extreme. To make a decision, mall officials must evaluate the policy from the point of view of multiple stakeholders.
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