Page 108 - Operations Strategy

TARgETing And OPERATiOns fOCus 83

To keep focused, however, requires clarity of vision. The policy of Ryanair’s boss, Michael
O’Leary, on customer service is also clear: ‘Our customer service’, he says, ‘is about the most well
defined in the world. We guarantee to give you the lowest air fare. You get a safe flight. You get a nor-
mally on-time flight. That’s the package. We don’t, and won’t, give you anything more. Are we going
to say sorry for our lack of customer service? Absolutely not. If a plane is cancelled, will we put you up
in a hotel overnight? Absolutely not. If a plane is delayed, will we give you a voucher for a restaurant?
Absolutely not.’
One attempt by Ryanair to cut costs prompted a backlash when it was accused of being
‘puerile and childish’ by the UK’s Office of Fair Trading (OFT). John Fingleton, the OFT’s boss,
criticised the company for adding extra fees when customers use anything but a MasterCard
prepaid card to pay for flights, using, he said, a legal loophole to justify charging the extra fee.
Mr Fingleton was reported as saying that, ‘Ryanair has this funny game where they have found some
very low frequency payment mechanism and say: “Well because you can pay with that”. It’s almost
like taunting consumers and pointing out: “Oh well, we know this is completely outside the spirit of
the law, but we think it’s within the narrow letter of the law”.’ Stephen McNamara, Ryanair’s Head
of Communications, retorted: ‘Ryanair is not for the overpaid John Fingletons of this world but for
the everyday Joe Bloggs who opt for Ryanair’s guaranteed lowest fares. What the OFT must realise
is that passengers prefer Ryanair’s model as it allows them to avoid costs, such as baggage charges,
which are still included in the high fares of high cost, fuel surcharging . . . airlines.’ But the backlash
against Ryanair’s policy continued, perhaps encouraged by the airline’s reluctance to apologise,
or sometimes even comment. Ryanair was even voted the worst of Britain’s 100 biggest brands
by readers of the consumer magazine Which? Then, after a drop in their hitherto rapid profit
growth and shareholder concern, Ryanair announced that it was to reform its ‘abrupt culture,
and try to eliminate things that unnecessarily annoy customers’. Included in these annoying
practices were fines for small luggage size transgressions and an unpopular €70 fee for issuing
boarding passes at the airport rather than printing them out at home (it was lowered to €10).
Yet Ryanair insisted that such charges were not money-spinning schemes, but were designed
to encourage operational efficiency that kept fairs low; in fact, fewer than ten passengers a day
had to pay for forgotten boarding passes.

types of focus
Just as there are many ways of segmenting markets, so there are several approaches
to focusing operations. The organisation of process technologies staff and processes
can be based on several criteria. Table 2.6 illustrates some of the more common
approaches to focus. These can be placed on a spectrum from those that take market-
related factors as being an appropriate way to segment operations resources, through
to those that allow the resource characteristics themselves to dictate how operations
are split up.

● Performance objective focus – The operation is set up solely to satisfy the performance
requirements of a particular market or market segment. All products or services pro-
duced in an operation have very similar characteristics in terms of generic perfor-
mance objectives.
● Product/service specification focus – The operation is set up for a clearly defined
product or service, or range of products or services, the implication being that
each defined range of products or services is targeted at a clearly defined market
segment.

M02 Operations Strategy 62492.indd 83 02/03/2017 13:01