Case Study: Hazel

Introduction to Operations Management

Jao, Arold Mikko A.

Kaw, Seleena Marie H.

EXPRODU XOC
Mr. Joey Accuña
View Point: Hazel

Time Context: Present

Objective: To prevent depletion of her financial resources by having a continuous source of income,
which would preferably continue to increase proportionately with the number of years, for support of
her basic needs.

Statement of the Problem: Hazel is to choose from the most income generating method to have
continuous financial stability supporting her basic and needs and current lifestyle.

Areas of Consideration
Financial Marketing Production/Operation
Strengths  Hazel has a small-scale  15years worth of  Quality of service is
lawn mowing business experience from tested – it is good
that earns meager Fortune500. enough to satisfies her
income.  Hazel earned loyal neighbors and
customers. recommend her to
 Word of mouth – free and others.
indirect marketing from
her current clients.
Weaknesses  Her savings were  Little knowledge of good  Unfamiliarity with the
depleted having no marketing that is operations in terms of
source of income for applicable to the nature other variation of the
eight months since of the business service she offers that
termination from the may result to poor and
Fortune 500 Company. unwanted quality.
Opportunities  The existence of her  Clients and friends are  There are other 400
lawn mowing business spreading the news about people with whom she
can be a good credential the business. was laid off with that
that may enable her to  Good credentials that she could hire.
loan from a bank for makes her a good
financing. prospect in job
application
Threats  In case of loaning, she is  Possible entrants in the  Existing competitors,
to have a collateral that industry- new who have been in the
is a great risk – she may competitors may affect business for a longer
lose her collateral when her sales. period of time, may
she loses the ability to  Existing competitors, have already perfected
pay off the interest. which may have a bigger their quality and
market share is hard to services.
compete with – it is hard
to break loyal customers.
 Competition in job
seeking with terminated
employees and new
workforce.
Alternative Courses of Action
 Expand the business
 Continue the business as it currently is
 Apply for another job

Evaluation of Alternative Courses of Action

 Expand the business
o ADVANTAGES:
 Accumulate more profit
 Cater to more people and have a bigger market share
 More opportunities to expand to an even bigger business
o DISADVANTAGES:
 Needs more capital equating to higher risk
 Needs more employees resulting to higher expenses
 Needs more equipment, which is hard to be addressed by Hazel’s current
financial position
 Lack of knowledge in expanding/operating the business
o SWOT

Strength Weakness Opportunities Threats

 The current market  Lack of knowledge in  Bigger potential  Existing competitors
share already has operating a bigger market to tap already have
confidence in the business. established their
business/management  Unknown reaction of market share
– current market is the new target market.  Other areas may
stable. present unfavorable
factors such as soil and
weather conditions

 Continue the business as it currently is.

o ADVANTAGES:
 No need for additional capital
 No need to hire more employees
 No need for additional equipment
 More time to stabilize theory
o DISADVANTAGES:
 No growth
 Loss opportunities for growth
 Stagnant business
 Closes the room for improvement
 o SWOT

Strength Weakness Opportunities Threats

 Accustomed to  Slow development of  The market would  Competitors may kill
handling the current knowledge/technology adapt and accept off the business by
market (her neighbors on other new concept of availing using more effective
and friends) and variations. professional lawn care services.
knowledge in how it services.
works.
 Refinement of
processes through
repetition.

 Apply for another job

o ADVANTAGES:
 No need to worry about capital
 No risk
 Less things to worry about
 Fixed work hours
o DISADVANTAGES:
 Fixed income
 Less flexible work hours
o SWOT

Strength Weakness Opportunities Threats

 Worked for a Fortune  Lack of knowledge in  Possible higher  The workforce has
500 company for newer and more income/pay from a big other more competent
almost 15 years. advanced processes company. and younger people
and technology. whom some companies
might prefer.

Conclusion
Out of the three alternatives, expanding the business seems to be the most advisable course
of action. Through expanding, income becomes greater resulting to the betterment of her current
lifestyle. Also, by doing so, there will be no loss opportunities – the higher capacity of the business will
be able to entertain current and potential loyal clients.
The number of advantages and disadvantages of the three alternative courses of actions are
not measure in terms of quantity, but of the gravity of each. Continuing with the current business
operations and getting a job will obviously meet her basic needs, but then again, she could do more
than to simply work for a minute income. In Filipino, it will be “isang kahig, isang tuka.” It means that
what is earned for the day is just right for the day’s spending. In such scenario, there will be no
savings. In both cases, there might be less risks, however, progress will be slow: continuing the
business as it is will not give her much changes in her life or things to think about because the
repetitive work in the business should have become second nature to her; getting employed in a firm
will connote uncontrollable working hours and repetitive paper works.
Recommendations
Expanding the business is the most advantageous course of action to be taken. Expansion
should not be prevented due to lack of resources or unfamiliarity of the target market. Hazel has only
started with the lawn mowing services and is doing well – this is a good sign. Financial limitation can
be addressed by availing of a loan, while unknown market can be coped with market research.
When financial problem in the business expansion is met through loaning, everything will fall
into their respective places. The capital will solve the problem the need of equipments and initial
inventories to be used in business operation. Furthermore, it will support the compensation for
employees.

Contingency Plan
In business, there are so many factors presenting so much uncertainty thus creating risks.
Although there are solutions provided to the disadvantages of the course of action expanding the
business, problems can still be encountered.
In the scenario that the market is growing faster than expected, there can be an instance
when demands cannot be met.

PROBLEM: Incapacity of the staff to meet the demands of the clients.

Actions Taken
To provide solution to the said problem, staffs should be trained to be more efficient. Newly
hired staff should be trained and old staff be retrained on how to use the equipment, troubleshooting
equipment, how to treat clients, how to maintain proper decorum during work, etc. Staff should also
be briefed and debriefed before and after every assignment or project. Competent employees will yield
to faster and higher excellent service.
There should be regular evaluation on the employees from the client, superiors and fellow
peers. In order for employees to always be on their best behavior, it should be done randomly.
Employee misconduct should be penalized while employee in good conduct should be praised and
acknowledged. The human resource should act like clock where everyone contributes to one single
goal of satisfying clients’ need.
Tools and equipment should be maintained properly. Tools and equipments should be
catalogued properly. Staff should always have a report before and after every usage. Failure to do so
will result to a penalty on the employee. After using, these should be cleaned before being used again.
Maintenance of equipments will ensure the quality service including meeting the demand.
Subcontracting and outsourcing are good options when the company has already reached its
maximum operational capacity. Subcontracting minor jobs of a weighty project would significantly
ease the job to be done by the company’s staff. With this, the company may take on more projects
and clients. The company may also tie-up with other companies to outsource some of their clients.
They can form an alliance that would benefit both companies equally. This would ensure that the
company would satisfy their clients.
Answers to Questions
1.
Hazel’s customers will judge the quality of the lawn care services in terms of the health of the
lawn: green grass, shrubberies, etc., absence of dead patches, neatness and cleanliness of the lawn,
and healthy foliage. Furthermore, prompt response to customer needs is a big plus.

2.a
 Possible increase or decrease in market share – an increase or decrease in customer demands
would require her a specific number of qualified employees, whether part-time or full-time,
which can determine her profitability. There should be efficiency thus, idle employees should
be minimized to cut down expenses.
 Cost of equipments, inventory, and other related materials – awareness of the changes in cost
would allow her to have a good pricing that would not compromise the ability of the business
to earn.

2.b
The inventory of service type of business depends on the equipments and other materials
required for the service to be rendered. In this scenario, the lawn mower requires power to operate
and maintenance materials.
A fuel-powered lawn mower obviously requires fuel, while whipper snipper type requires thin
nylons that should be replaced when it wears out. Others would require blades. It may be advisable or
tricky even to have a lawn mower with cord, which will then make use of the client’s power supply and
yield less inventory expense. In addition, maintenance materials such as oils and lubricants, air filters,
and other spare parts.
Due to other services offered, it would also require Hazel to have inventories such as
fertilizers. This is mainly supplied periodically.

2.c
Scheduling should be done efficiently in this kind of industry. Plants, in particular grass, has a
rate on how fast they grow hence, the service is done periodically. Schedule is a must as to distribute
the lawn care services throughout a period and not leave idle days. It is also for maintenance of short
grass and neat lawn. This is crucial to meet growing customer needs.
In other instances such as application of fertilizers, one of the other services offered, should not be
done during rainy days for it may be washed off. In other words, the different seasons will affect the
scheduling – spring, summer, and fall may be considered peak seasons for the nature of the business.
Having the proper scheduling will help in managing resources including human resource.

2.d
 Quality assurance will enable Hazel’s business to have continuous customer loyalty – if good
quality service is consistent, then her current clients is satisfied enough and will be hesitant to do lawn
care by themselves again or result to risking the unknown quality service of other lawn care services.
Indirectly, it can be a form of marketing where her lawn care services may be endorsed by her current
clients to their friends and other neighbors. A friend’s recommendation is a powerful way of gaining
more customers.
Lastly, it will also prevent other entrants to the market. Even if a competitor arises, it will be
hard for them to have a piece of the market share if Hazel provides quality assurance. Clients’ loyalty
is hard to change.

2.e
Maintenance of equipment is very important. Once equipments are not available, lost
opportunities will be experienced: lost of service revenue, lost of potential customers, lower customer
loyalty, etc.
Aside from the said maintenance, customer services must be maintained. This is where extra
services should be rendered as to make the clients feel that they are really being taken care of.

3.a
Working for the company will alleviate Hazel from having risks of investing in her own
business. The job will be probably easier and the pay will be sufficient for her daily needs since it had
been such for 15years in Fortune 500 Company.
Although, starting her own business can give her more flexibility in terms of time, since she is
her own boss, but has more tasks to consider. She will only have time on her hands once business
system or process is established and the business has been stabilizes. Moreover, having a business
creates a large room for improvement and higher income resulting to compensation of her basic needs
and betterment of her lifestyle. On the contrary, the higher the investments equates to higher risk.
Caution should be observed.

3.b
Expanding the business, as mentioned, will generate more risk due to additional investments
that will be contributed in the business. It may allow more income, but expanding a business is not an
easy task. Factors such as increasing expense, hiring of more employees, additional equipments, etc.
will affect the business to the point that the system is altered.

3.c
Launching a Web site is costly, but will surely reach quite a number of potential customers.
However, the problem is the scope. In her lawn care service, it is very advisable to have nearby dense
community as her market than a huge market all over the place. Other cost like transportation cost
will shoot up the operating expense.
 Targeting business nearby can be the task of launching a web, but the cost is still impractical.
She can result to cheap for of advertisements: flyers, door-to-door, etc.

4.a
Hazel could cut the grass more frequently, cutting only a third of the vertical growth of the
grass, and leave the grass clippings on the lawn.
Advantages: The grass would shade out weeds and have a more efficient root system. Grass clippings
decompose easier than other alternatives. Hazel could lessen her costs in buying fertilizers.
Disadvantages: Leaving too much clippings would damage the lawn. Hazel would need to invest in
mulching mowers and make sure that the blades are kept sharp. She would also need to make an
efficient schedule to make sure that every lawn in her service is maintained properly.

4.b
She could gather the grass clippings and make compost out of it.
Advantages: She could reduce the cost of buying fertilizer. She could also make her own formula of
fertilizer to specifically target her target market’s wants and needs.
Disadvantages: It would take time and effort on her part for the grass clippings to become compost. It
would add to costs to buy additional chemicals to add to the compost fertilizer.

5.
Hazel should send a check for the idea especially if she has implemented the bonus policy
when the student was still under her employment. She should still give credit to the former employee
because it was his idea to begin with. By doing so, she would set an example to her former, present,
and future employees to be morally correct or ethical. People looking for work would want to apply for
a job with her because they know that they would be well appreciated by Hazel. Unfortunately, some
people may want to use the “good faith” of Hazel to their own advantage. Some may use others to get
new ideas and pass it as their own, especially if those people are not known by anyone within the
industry. It could also inspire jealousy within the workplace. The less creative thinkers would feel that
the more creative thinkers are monopolizing or exploiting the bonus policy.

6.
Additional services such as fertilizing lawns, trimming shrubberies, weeding gardens, clearing
pathways during winter, going into gardening, etc. would require more staff and possibly some full-
time employees. These services are essential for Hazel to compete with other competitors. She could
give out service packages from which her clients could choose. She could also do custom jobs for
specific clients who would want to have exclusivity. Some people may want her to build them gazebos,
fountains, trellises and the like, which are unlike any others within their neighborhood, to beautify
their lawns or gardens.
 Seasonal weather also has a great effect on process variation of Hazel’s business. Staff should
be in full capacity during spring, summer and autumn, while in winter, some of her customers may
want to have a winter garden and may continue to patronize her services. Although she may not
require a full staff during the winter months, she might need to hire people who would be willing to
work under somewhat undesirable conditions.
Sudden changes in weather also disrupts Hazel’s business schedule. She needs to have
contingency plans for cases when the weather takes a turn for different case scenarios. She should
also be able to hire people who are flexible and would be able to cope up with the changing weather.
Contractual and seasonal workers would also have an effect on how the business would
function. During breaks, there would be a flood of people who would be willing to do part time jobs.
While when the breaks are through, a great number of those people would decrease since they have
to go back to their work or studies.
Hiring too many people when there is too few clients would mean greater costs, while too few
employees available would decrease the optimal productivity of the business process. To remedy this,
Hazel can ask her clients in advance what jobs they would like to avail from her and would have to
hire people who are more suitable or compatible with the few jobs available. She would also need to
hire fulltime employees to make sure that she has a consistent minimum output for the whole year.
She should also make a strict timetable when there is too few staff available.
Economical condition of the country would have the greatest impact on Hazel’s business. If the
country were experiencing a recession, people would less likely procure her services. People would
have less disposable income to spend. There would also be a great influx of unemployed people, with
people getting laid off and students graduating. Hazel would need to give service discounts and
promotions to attract and maintain clients.
While in an economic boom, more people would acquire her services since they have more
disposable income to spend. There would also be fewer people who would be unwilling or would not
need to work, either part-time or fulltime. She could hire fulltime employees since she would have a
steady stream of clients.

7.
Sustainability, the use of resource that do not harm ecological systems and promote human
existence, can be done by the use of lawn mowers that do not emit any pollution such as the
traditional cylinder and rotary movers both that do not require fuel nor electricity. Other services
supports human existence. Even the issue on grass clippings is considered so it would not be added in
the landfill.