Ferndale Sands Conference Centre

An overview of its services and allocation of resources

Hult International Business School

March 2020
1. Introduction
Ferndale Sands Conference Centre is a former hotel of 52 rooms in Victoria State, Australia,
which in the past four years became an “executive retreat” rather than a provider of
company meetings, offering luxurious Victorian facilities, high-quality service and catering,
as well as fully ranged recreational facilities (gym, golf, tennis, swimming pool, etc.). The
length of the events attended can vary from one day to two weeks. Additionally, it has
negotiated the accommodation of three universities for their Executive Education Programs.

The problem started -or at least the owner noticed it- when a journal article claimed to have
uncovered administrative complacencies and inefficiencies, menacing Ferndale Sands's
reputation with sarcastic language, posing that it was a palace but without any knowledge
of the fundamentals. In addition, the article showed a survey comparing Ferndale Sands
with similar conference centers in and around Melbourne, with favorable results to it. As is
shown in Figure1, the survey answers are displayed in a 1 to 5 scale, finding that Fernand
Sands occupies the second place after Collins International (The 1 to 5 scale methodology is
shown in Appendix 1).

As we can see in Figure 1, without using any weight to the aspects of the survey, we can
notice that Ferndale Sands scored >= 4 in 7 of 11 aspects, overperforming in Size of Menu
but underperforming significantly in Price, Flexibility of accommodation, and Off-peak price
discounts. Moreover, we can notice that Collins International and The Yarrold Conference
Centre offer equivalent services to Ferndale Sands (average scores of 3.91 and 3.27
respectively), being ST Kildan Conference Centre a lower-end option (2.55 average score).

According to Slack and Brandon-Jones (2018), effective operations management enables

businesses to enhance efficiency, revenues, and allocate resources effectively, developing
capabilities and providing a competitive advantage. Therefore, operations tools should be
applied to address the critical points that Ferndale Sands needs to solve to attend
customer’s expectations.

2. Performance Factors Ranking

According to Slack and Brandon-Jones (2018), in order to develop competitive advantages,
the company has to determine the manner they perform its activities, right, fast, on-time,
efficiently, or in a flexible way, but reflecting on what the costumers rank as important.

According to Ferndale Sands’ latest survey results, the percentage of clients that value as
important or very important are shown in Table 1.

Therefore, in order to rank those Performance Factors in the Importance scale proposed by
Slack and Brandon-Jones (2018), we should first order them per importance and then apply
the equivalence proposed in Figure 2.
This analysis will enable us to obtain the abscissa axis (X) from the Importance-Performance
Matrix.

3. Ferndale Sands’ Performance Ranking

According to Slack and Brandon-Jones (2018), comparing business performance with
competitors (target) should guide priorities and opportunities for improvement.
Nevertheless, the company should not focus immediately on aspects that already are
significantly better than the competitors (target), even if the aspect is considered as
important, or the performance is low.

To assess Ferndale Sands’ Relative performance with the main competitors, we used the
analysis made in Section 1 to obtain the Performance scale (1 to 9) proposed by lack and
Brandon-Jones (2018). We will focus on the main competitors, Collins International and
Yarrold Conference Centre, since we identified that St Kildan Conference Centre is a low-end
player in the market.

Firstly, using the scores (1 to 5) shown in Section 1 - Figure 1, we made an average of the
main competitors’ scores, and obtained a difference between Ferndale Sands sand the
average of the competitors, as we can see in Table 2.
Secondly, using the scale shown in Figure 3, which compares the score difference between
Ferndale Sands with the competitor’s average, we obtained the values for each
Performance facto according to the scales proposed by Slack and Brandon-Jones (2018).
Additionally, an adjustment was made when the low-end player had Equal or Better
performance than the average, worsening by 1 Ferndale Sands performance level.

Finally, this analysis enabled us to obtain the ordinate axis (Y) from the Importance-
Performance Matrix, as we can see in Table 3.
4. Importance-Performance Matrix
According to Slack and Brandon-Jones (2018), to prioritize the improvements, both relative
importance of the performance factors and the company’s performance against competitors
(target) should be analyzed together through the Importance-Performance Matrix, which
positions the importance of each performance factor with the performance that is currently
achieving. Finally, four zones are proposed to determine which aspects that are more urgent
to improve, since most operations tolerate lower performance for relatively unimportant
performance factors, but will allocate resources on those that are important. The proposed
zones are 1) The Appropriate Zone, 2) The Improve Zone, 3) The Urgent Action Zone, and 4)
The Excess Zone.

Therefore, after ranking the performance factors and assessed Ferndale Sands relative
performance with its main competitors, we developed the Importance-Performance Matrix
as we can see in Figure 4, where we can see some noticeable deviations, like Flexibility, Style
and Quality of Food, Administration and Support, Size of Menu, Recreational Facilities and
Off-Peak price discounts.
Hence, the distribution of the Performance Factors by zones could be as the following:
1. The Appropriate Zone: Service and Quality, Ease of Access, Décor, and Service &
Quality (that may be too high in comparison to the bound of acceptability). The
management already knows that they are strong in some of these aspects, and they
are making a considerable market differentiation.
2. The Improve Zone: Off-peak price discounts and Price. Nevertheless, Price
performance may enhance if the value proposition is adequate. Discounts policies
should be reviewed, but after completing the actions in the Urgent Zone.
3. The Urgent Action Zone: Flexibility and Administration & Support. Flexibility
performance is very difficult to achieve since the Victorian facilities aren’t versatile
enough to attend customers’ needs. On the other hand, Administration & Support ‘s
lower performance confirms Mario Romano’s disconformity with the survey results,
but a complete analysis should be performed before determining immediate actions,
without allowing emotions to rule key decisions.
4. The Excess Zone. Size of Menu and Recreational Facilities. According to the
management, these aspects require strong amounts of resources, which may be a
considerable over expense, since customers consider them as the least important.

5. Analysis of the propositions from managers Nick Godfrey and Robyn

Wells
Mario Romano, after finding out that his Business was harshly criticized by an article of The
Conference Centre Journal, met with his principal managers Nick Godfrey (Catering &
Recreational Facilities) and Robyn Wells (Front-House & Client Relations), touching the
following topics, the validity of the survey, problems with flexibility, the importance of the
Administration & Support result, Quality and cost of the menu, and the need of increasing
revenues and reduce costs.

We can highlight that both managers had doubts that may surprise, as the importance they
gave for a bad review, holding information about reservation flexibility, considering expend
more money instead of finding efficiencies or re-allocation of resources, reducing costs from
unrelated areas without analyzing the importance, the worthiness of time to be invested in
improvements, or if revenues and costs are equally important; reflecting on a silo, narrow,
and complacent mindset, lacking self-criticism.

However, after analyzing the problems, they offered the solutions displayed in Figure 5 in
the answer of Mario’s request, who stated that the decision will focus on the immediacy of
the effects:

Any of the proposals suggests attending critical underperforming aspects as Administration

& Support or Off-Peak Price Discounts, and managers are disregarding resource allocation
and the value that Operations Management offers to create a competitive advantage. On
the contrary, some of them suggest investing in more equipment and advertising,
maintaining the current inefficiencies and underperformance.
Therefore, even though there are important aspects that haven’t been considered as
mentioned before, as Mario requested, the proposals that he should pick are Reduce Menu
Choices and Close the Golf Course, activities that are not being valued by clients, on the
contrary, this actions could free important economic resources to focus them on activities
that customers do value. Additionally, Ferndale Sands should find the option to leverage
resources or partnerships to implement flexible rooms, at least for a portion of clients.

Nevertheless, in the following section, an additional approach is proposed.

Balancing Resources (Additional Approach)

If we perform a theoretical resource balancing, using the Importance-Performance Matrix’s
and the 1 to 5 scoring presented in Section 1, we can suggest a reallocation of resources as
shown in Table 4, to evaluate the effects on the overall performance, and asses if we could
create value without expending more money.

As we can see in Figure 6, after reallocating the resources the average performance
improved to the same level as the main competitor (3.6 to 3.9) without investing more
money, creating a competitive advantage. Therefore, with enhanced efficiency, the
company could analyze investing in flexible rooms, surpassing its competitors.
6. Conclusions
Operations Management is a key function in the business since it not only can represent a
competitive advantage, but also can drive the company to success, or to shrink if the
appropriate attention is not paid in this function. Like a rally competition analogy, where
everyone has their function, the copilot reads the map, points if they have to accelerate or
brake, and warns for curves or difficult paths, is the same of the strategy in a company, the
engine configuration, chassis, and equipment, is where the value is produced, and the pilot
should be Operations and Process Management. Therefore, winning the race, ruin the car or
not even reach the goal, is up to the pilot.

Assessing the performance of business activities and compare them with the importance
that customers give to them, enables an effective allocation of resources. Similarly,
improving the efficiency enough to avoid expend money in more installed capacity by
allocating the resources properly. Thus, this assessment can become a competitive
advantage as we reviewed in the previous sections

Furthermore, despite one may have the best-designed processes or policies, human
behavior is driven by emotions and context, which can lead to focus in activities that not
offer value, thinking in silos, and preventing them to view the company as a whole, even
worse when companies have to invest money this behavior can cause serious losses.

Finally, it is very important to pay the right attention to the company’s reviews, as shown in
a survey performed by BrightLocal (2019), 82% of clients said that negative reviews made
them less likely to use a business.
References
 Slack, N., & Brandon-Jones, A. (2018). Operations and process management
principles and practice for strategic impact. London, Pearson Education Limited.
 Murphy, R. (2019, December 11). Local Consumer Review Survey. Bright Local.
Retrieved from https://www.brightlocal.com/research/local-consumer-review-
survey/#Q6
Appendix
Appendix 1. Scale (1-5) application to The Conference Centre Journal’s survey, used in Figure 1.

- Original Survey - - Scale -

Ferndale Sands The Yarrold St Kildan Conference
Aspects Collins International 1 2 3 4 5
Conference Centre Conference Centre Centre
Price ($$$$$=very expensive,
$$$$ $$$$$ $$$ $ $$$$$ $$$$ $$$ $$ $
$$$= average, $= budget)
Size of menu Extensive Standard Standard Limited Limited Standard Extensive
Traditional, luxurious and Modern, very luxurious
Decor Modern but basic Needs renovation NR MBB L&T VL&S
tasteful, and stylish
International modern, Varies, undistinguished
Style and quality of food Modern, best in the State Varies, very basic VB UBA SS BIS
slightly standardized but acceptable
Excellent, friendly and
Quality of service Good Limited Enthusiastic but limited Limited EBL Good EFR
relaxed
Variable, some problems
Administration and support Good Good OK VSPR OK Good
recently
Flexibility of accommodation Poor Very good Acceptable OK Poor OK A VG
Some in summer, none in
Off- peak price discounts None offered Willing to negotiate Willing to negotiate NO WTN SS&SW
winter
Requires notice for
Equipment Normal range Normal range Normal range RNFAU NR
“anything unusual”
Full range, gym, tennis,
Recreational facilities Gym, swimming pool Gym only Gym only GO G&SP FR
golf, swimming pool, etc.
Good, will pick up from City center, no airport
Ease of access Close to city center 10 km from city center. 10Km CCC CC&BT Good
airport and city. shuttle to hotel, but bus