Presented by group 5: 0742890,, 0738201, 0734937, 0742890,

0837822, 0738481
1
 Contents Number
2

 Learning objectives 3
 Introduction 4
 Q.1. Where is the opportunities for bidirectional optimization at
Peapod? 6
 Q.2. How can Peapod manage its service perishability? 9
 Q.3. How can peapod manage its productive capacity? 13
 Q.4. Suggest reasons why Peapod has not yet become profitable. 15
 Recommendations 18
 Conclusion 19
 Bibliography 20
 Learning objectives
3

Identify the opportunities for bidirectional optimization at

Peapod?

Demonstrate how Peapod manage its service perishability?

Express the ways can peapod manage its productive

capacity?

Analyse the reasons why Peapod has not become

profitable.
 Introduction
4

Peapod is virtual grocery delivery service owned by

Royal Ahold.

Peapod was founded in 1989 by Andrew and Thomas

Parkinson.

The idea behind Peapod is to save customers time.

Peapod provides flexible delivery hours for customers

 The Strategic
Service Vision of Peapod
5

Service Delivery Operating Strategy Service Concept Target Market

System
• To provide the
world in providing
local interactive
grocery shopping
service
• Allow time
flexibility
Segment
• Offer customized • Do peoples • Well educated
service shopping
• Busy people
• They aim to satisfy
each customer • Deliver to their
door • Technically savvy
• Uses windows
platform with • Change people s • Dual income
pictures of various experience while families
products and lists. shopping.

• Help customers
save time

James ,A and Mona, J Fitzsimmons (2008) Service Management: Operations, Strategy, Information technology. 6th ed. Mc-Graw-Hill Education
 Q.1. Where are opportunities for bidirectional
optimization at Peapod?
6
Bidirectional optimization is
feasibility of enhancing customer
satisfaction at the same time
providing what is most suitable
for the company.

Peapod is a single-Level Bidirectional Service

Customer-supplier duality Supply Relationship

Customer duality is when Service

Category
Customer
-Supplier
>Input
Output>
Service
Provider
customers become participant
of the service delivery. Minds Student >Mind
Knowledge>
Professor

Bodies Patient >Tooth Dentist

Customers have to make an order on the Filling>

internet , phone, fax as well as choose Belongings Investor >Money Bank

Interest>
their delivery time that suits them in
order to receive a service. Information Client >Documents
1040>
Tax Preparer

James ,A and Mona, J Fitzsimmons (2008) Service Management: Operations, Strategy, Information technology. 6th ed. Mc-Graw-Hill Education
 Q.1. Where are opportunities for bidirectional
optimization at Peapod?...continued
7
Managing Productive Capacity
 Service capacity is when services
provider provides its services with
minimum excess.
 Peapod meet its service capacity by using
high level of service duality that suits
both customer and Peapod.

Customers supplied inputs can

vary in quality
 Peapod can give more choices on its time
window so customers can chose how
much the pay for their delivery.
 For example Tesco allows customers to
make orders a week in advance and
request lees pay for it while people who
want next day delivery pay more.

James ,A and Mona, J Fitzsimmons (2008) Service Management: Operations, Strategy, Information technology. 6th ed. Mc-Graw-Hill Education
 Q.1. Where are opportunities for bidirectional
optimization at Peapod?...continued
8
High customisation The higher the customization the
creates high service higher the cost so this benefits
Peapod.
value
 Busy customers can participate
less and pay more for the service
quality they receive.
 For example Peapod can provide
automated delivery order so
customers can receive their
weekly shopping with out having
to make an order every week.
 This will help Peapod prioritise
their services and be organised.

James ,A and Mona, J Fitzsimmons (2008) Service Management: Operations, Strategy, Information technology. 6th ed. Mc-Graw-Hill Education
 Q.2. How can Peapod manage its service
perishability?...continued
9

Perishability
 One of the factors used to distinguish
services from physical goods.
 Unlike physical products, services cannot be
stored for later sale so that a failure to sell at
a time of creation results in a complete loss
of the service.
Managing Pershability is the path peapod
takes in the service management to limit the
waste of productive capacity in distributing
the work force.

James ,A and Mona, J Fitzsimmons (2008) Service Management: Operations, Strategy, Information technology. 6th ed. Mc-Graw-Hill Education
Westburnpublisher,(2009)westpublisher,[Online www : http://www.westburnpublishers.com/marketing-dictionary/p/perishability.aspx)
Sticky-market(2009)sticky-market[Online www] accessed on (25 of April 2009)
 Q.2. How can Peapod manage its service perishability?
.....continued
10
Ways for Peapod to mange it
service pershability.
An effective use of time
window
 Dynamic schedule optimization
software allow Peapod to allocate every
worker to ever point of delivery.
 Peapod have incorporated the ability
to utilize the time in which their
workers are seen to be constructively
doing the tasks in which they have
been given.
 Workers are available to undertaken
any task at any given time. This will
enhance the infrastructure that has
been created within peapod
James ,A and Mona, J Fitzsimmons (2008) Service Management: Operations, Strategy, Information technology. 6th ed. Mc-Graw-Hill Education
 Q.2. How can Peapod manage its service perishability?
....continued
11
The process of training,
refining, extending skills
and capacity.
 Peapod train and enforce the skills
and capabilities of their workers.
 This allows for consumers to
benefit from a personal shopper
who will carefully select the
produce and ensure that this is
kept chilled until required.
 Training given to workers at
peapod ensures that expected to
cut out long run costs ensuring the
productivity of the organization

James ,A and Mona, J Fitzsimmons (2008) Service Management: Operations, Strategy, Information technology. 6th ed. Mc-Graw-Hill Education
 Q.2. How can Peapod manage its service perishability?....continued

12
Peapod manage its pershability

 Peapod is working with the Cube Route service across

the entire organization which are located in 13 markets
across the United States.
 The Cube Route service is being used by Peapod for
dispatch management and visibility into its delivery
operations.
 This allow customers track the status of each delivery in
real time, and respond to customer queries quickly and
efficiently.

“Cube Route, Inc offers information digitization, dispatch

management, package tracking, and booking notification
module service”
(LinkedIn, 2009)
Linkedin, (2009) Linkedin [Online www] ttp://www.linkedin.com/companies/cube-route Accessed on(25 April 2009)
http://findarticles.com/p/articles/mi_m0EIN/is_2005_Sept_19/ai_n15396276/?tag=content;col1
Smartcomputing(2009)Smartcomputiong [Online www] (http://www.smartcomputing.com/Editorial/article.asp?article=articles/archive/l0507/20l07/20l07.asp&guid=Accessed on(25
James
April ,A and Mona, J Fitzsimmons (2008) Service Management: Operations, Strategy, Information technology. 6th ed. Mc-Graw-Hill Education
2009)
 Q.3. How can peapod manage its productive
capacity?
13

Productive Capacity
 The maximum output you could achieve
with your current production equipment
when it is working for the maximum
practical number of hours and with the
maximum efficiency and minimum
down and change over times.
(sticky-marketing,2009)

 The Main deliberation of product

capacity for mobile workers is the
amount of the time spent between jobs
and the distance between jobs.
James ,A and Mona, J Fitzsimmons (2008) Service Management: Operations, Strategy, Information technology. 6th ed. Mc-Graw-Hill Education
Sticky-market(2009)sticky-market[Online www] http://www.sticky-marketing.net/glossary/productive_capacity.htm) accessed on (25 of April 2009)
 Q.3. How can peapod manage its productive
capacity?.......continued
14
The strategy for Managing
Productive Capacity

Transfer: make knowledge

available.
Peapod can provide FAQ to guide
them through their order and
answer any enquiries they have.
Proving all prices of product on the
website.
Replacement: substitute
technology for server
Automated service that makes their
order based on previous orders and
deliver it on the usual time.
 Q.3. How can peapod manage its productive
capacity?......continued
15
Embellishment: enable
self-service by teaching
While delivering orders,
deliver a guide to help
with inconveniences that
happens when using the
website.
Allowing customers make a
decision on when and
where to receive their
product

James ,A and Mona, J Fitzsimmons (2008) Service Management: Operations, Strategy, Information technology. 6th ed. Mc-Graw-Hill Education
 Q.4. Suggest reasons why Peapod has not yet become
profitable.
16

Reasons why Peapod has not

become successful.
1. Their target market is very
limited. As they only target Well
educated, technically savvy, dual-
income families. So they could
target every one that want to use
their service and deliver
customised service.
2. Customers have to make their
order before they receive the price
they have to pay. People always
want to know before hand how
much it is going cost them so

James ,A and Mona, J Fitzsimmons (2008) Service Management: Operations, Strategy, Information technology. 6th ed. Mc-Graw-Hill Education
 Q.4. Suggest reasons why Peapod has not yet become
profitable......continued
17
strength

Weakne
sses

•Customers can access the services via •They don't have ambient condition on
internet, fax and phone. their side so they can not enforce
•They give customers impulse purchasing.
•People are not comfortable on giving
their details to a third party to use and
Peapod store.
•Peapod has the opportunity to expand SWOT analysis •Peapod does not stand a
world wide because research shows
chance compared with
65% of people hate grocery shopping. click-and-mortar
companies.

Threats
nity
Opportu

James ,A and Mona, J Fitzsimmons (2008) Service Management: Operations, Strategy, Information technology. 6th ed. Mc-Graw-Hill Education
 Recommendation
18

Based on customers previous order Peapod can

provide customers with their weekly shopping
automatically.
Incorporate with local supermarkets that are trusted
by the local people and deliver fresh products to their
customers.
Expand their target market in to delivering their
services for every one that wants to use it.
 Conclusion
19

Peapod achieves bidirectional optimization by highly

customising the services it offers as well us creating
value at the same time.

Peapod uses effective time keeping, the process of

training, refining, extending employees skills and
capacity to avoid pershability.

Peapod has limited target market that gives them the

opportunity to miss out on untouched target market.
 Bibliography
20
Books:
Fitzsimmons, J and Fitzsimmons, M (2008). Service Management: Operations, Strategy,
Information technology. London: London. 315-335.
Journals:
Alam, I. (2006). Service innovation strategy and processes: a cross-national comparative analysis.
International Marketing Review, Vol. 23, Iss: 3 pp.234-254.
Mathieu, V. (2001). Service strategies within the manufacturing sector: benefits, costs and
partnership, International Journal of Service Industry Management, Vol. 21, Iss: 5 pp. 451-475.
Websites:
Linkedin, (2009) Linkedin [Online www] ttp://www.linkedin.com/companies/cube-route Accessed on(25 April 2009)
http://findarticles.com/p/articles/mi_m0EIN/is_2005_Sept_19/ai_n15396276/?tag=content;col1
Smartcomputing(2009)Smartcomputiong [Online www] (
http://www.smartcomputing.com/Editorial/article.asp?article=articles/archive/l0507/20l07/20l07.asp&
guid=Accessed
on(25 April 2009)
Sticky-market(2009)sticky-market[Online www] http://www.sticky-marketing.net/glossary/productive_capacity.htm
) accessed on (25 of April 2009)

ANY QUESTIONS?