MGT 3501 Lecture Notes - Lecture 5: 5Star, Happy Hour, Airbnb
Document Summary
Involves experienced/more employees to compensate for the variations among customers. 5-star hotels have more employees and almost everyone can assist you. Motel have barely one or two workers who aren"t very skilled and can answer only basic questions/provide basic services. Costs more and forces the company to bear the brunt of the variability. Success of strategy hinges on the company"s ability to persuade the customer to pay more to cover the expense. Service experience has to be very good. Companies are persuading customers to serve themselves. Experiences varies with the customer"s capability and effort. Effective for high arrival or request variability. Must ensure the customers feel compensated in some way: low prices, etc. A major challenge for managers is matching service capacity with customer demand on a daily basis in a dynamic environment. Ex: how many airplanes to purchase, how many hotels to build. Whenever demand falls short of capacity, the results are idle servers and facilities.
