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In recent years, Au Bon Pain (ABP), a chain of upscale French bakeries/sandwich cafes based in Boston, confronted a set of human resource problems endemic to the fast food industry (i.e., a labor shortage which made it difficult to attract and maintain quality crew personnel and management candidates, an inadequately trained management staff, and high turnover). To deal with the resulting "cycle of failure" while increasing individual initiative and performance at the unit level, ABP devised a new compensation-incentive system for its store managers--the Partner/Manager Program. Under this program, store managers would be paid a standard base salary plus a share of the incremental profits. The case asks students to evaluate the program by comparing it to ABP's existing compensation system, determining the different ways in which managers from two stores operating under an experimental run of the program achieved their results, and by considering the strategic implications of implementing the program in all of the company's stores.

The Hartford Steam Boiler Inspection and Insurance Co. (HSB) dominates the market segment in which it operates. Its success comes largely from the company's service delivery system, a joint product of HSB's marketing and operating managers. Vital to strategy implementation is involving the employees who deliver the service. Successful companies focus on shared values, control by peer groups, generous incentives, and--where possible--a close relationship with the customer. Using databases imaginatively permits many of these businesses to substitute information for assets that both enhance service effectiveness to existing customers and attract new ones.

The rapidly growing American subsidiary of an international resort company seeks to identify the factors underlying its success. The case describes the forces that shape the industry's structure, raising the issue of where it is possible for Club Med to establish a sustainable competitive advantage. Classic sources of competitive advantage are dealt with, leading to the role of corporate culture in creating a sustainable competitive advantage. The case also focuses on service quality from the standpoint of customer dissatisfaction and its associated costs.

Highlights the issue of high employee turnover in a multi-site, international subsidiary of a large resort company. Also described are service-quality problems the company has because the amount of value added through employee interaction with customers is high. Analysis of recruiting and hiring as a process flow is required to analyze the situation. There is also a cross-cultural issue due to a structural imbalance in the ratio of non-American (primarily French) managers to American managers.

The Paul Revere Insurance Co. lost its number one position in disability insurance, its main product, and formulated a strategy to regain the lead through a comprehensive quality improvement effort. The case describes the forces influencing the strategic direction of this effort, its structure, and its process over a two-and-a-half-year period. Many issues are raised regarding the design of quality improvement efforts, their implementation, and the continual efforts that must be devoted to them if they are to be an ongoing process. Situation-specific factors relating to this case are explored to determine to what extent this company's method can be duplicated by other service firms. May be used in a comparative analysis of the quality improvement analysis described in Florida Power & Light's Quality Improvement Program.

Spreadsheet supplement for case 387043.

The service sector, now nearly three quarters of the U.S. gross national product, may be headed toward the same global noncompetitiveness as manufacturing. Deregulation of U.S. communications and financial markets has helped drive U.S. industries into global competitive leadership, but success may be producing a familiar complacency that repeats in services the same insularity that has damaged manufacturing. This report on a multiphase study shows that warning signs have already begun to appear. U.S. companies are paying insufficient attention to customers and quality and overemphasizing scale economies.

Americana Hotels decides to lease a resort hotel on Jamaica's north coast from the Jamaican government. Management must decide whether to operate it as a traditional resort, or as an all-inclusive, club-type resort, similar to those operated by Club Med. The traditional resort appears to be a low-risk, solidly profitable opportunity. The all-inclusive option, on the other hand, has enormous profit potential, but the company has no experience operating this type of resort--and there are major differences in its operational characteristics.

A completely unexpected telephone call comes from the Jamaican Prime Minister. The government's position provides an interesting look into government-business relationships, especially in third-world nations.

New competition has led to doubts about Singapore Airlines' excellent reputation for in-flight services. The key to maintaining or improving service is the attitude and proficiency of the cabin crews. The company now discovers that there may be problems in this group. This is a rewritten version of earlier cases by D.D. Wyckoff.

Supplement the (A) case. This is a rewritten version of an earlier supplement by D.D. Wyckoff.

Professional service firms are paying an increasing amount of attention to formal marketing practices to attract clients. The professionals are being prompted by legal sanctions, an overabundance of professionals, and a declining public image. Professional service firms are inhibited from freely using traditional marketing approaches by special challenges: strict ethical and legal constraints, buyer uncertainty, and the need to be perceived as having experience.

Discusses the experience of waiting and the factors that affect customers' tolerance for waits. Eight (testable) propositions concerning the psychology of queues are presented, together with specific managerial advice.

The root of most service problems is a lack of systematic design and control. The use of a blueprint can help a service developer not only to identify problems ahead of time but also to see the potential for new market opportunities. A service company that relies on ad hoc management is not equipped to react quickly to market needs and opportunities.

A law firm must decide how to split partnership profits among the partners. Issues of seniority versus performance, performance evaluation, and lack of consensus of values dominate the discussions.

The quality of customer service is often as important as the quality of the product. A company can evaluate its customer service by performing a customer service audit. To effectively implement a customer service program the company should educate customers; educate employees; be efficient first, nice second; standardize service response systems; develop a pricing policy; involve subcontractors, if necessary; and evaluate the customer service operation.

Various proposals are set forth for expanding the capacity of the hospital. In assessing them, serious consideration has to be given to the culture of the organization and the importance of preserving it in a service delivery system. In addition to issues of capacity and organizational analysis, describes a well-focused, well-managed medical service facility that may well point the way to future economies in the field.

Effective management consulting has eight fundamental objectives: responding to a client's request for information; providing solutions to specific problems; giving an in-depth, accurate diagnosis; presenting a program of recommended corrective actions; implementing changes; building consensus and commitment; facilitating client learning; and enhancing organizational effectiveness.

Describes the marketing planning process adopted by the corporate headquarters of a chain of 22 diverse hotels. Raises the question of whether it is possible to standardize the planning process so that individually tailored marketing strategies are developed for each hotel unit. This company's approach contrasts with the standardized product/market strategy found in some other hotel chains.

Management of a resort hotel near Palm Springs is reviewing the hotel's performance nine months after opening and planning a marketing strategy for 1980. Of particular concern is the strategy to adopt during the shoulder and off-seasons when demand for the product is lower. Should the hotel even remain open in the summer when other major hotels in the area are closed? Will attempts to stimulate summer demand negate the hotel's efforts to win a five-star rating? Twelve pages of exhibits include data on hotel usage in the area, and operating costs and revenues for Rancho Las Palmas.