PARKnSHOP
is Hong Kong's biggest food retailer, with a chain
of over 186 stores, of which 29 are Superstores.
For most of its 27-year history PARKnSHOP
had been the second-largest supermarket chain in
Hong Kong, behind the long-time market leader.
Determined to change this position, however, PARKnSHOP
set out on a journey of fundamental change in the
mid 1990s which has seen it expand |
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the nature and scope of its business,
become a truly quality-driven organization, achieve market
leadership and begin to change the very nature of food
shopping in Hong Kong.
The external signs of this change have been many: the
development of PARKnSHOP Superstores offering a
full range of Wet Market food as well as extensive supermarket
ranges; the Fresh Check campaign which is bringing world-class
standards of food hygiene and safety to Hong Kong for
the first time ever; the PriceWatch value campaign which
has transformed PARKnSHOP's value perception; and
ever-increasing standards of Customer Service.
But behind these visible external signs there has been
a parallel change in the PARKnSHOP organization,
turning a traditional retailer into a customer-focussed
business with clear organizational Goals and Strategies
and a quality-driven approach to process management which
has achieved outstanding results.
Leadership and Strategic Planning
Back in the mid-1990s PARKnSHOP recognized the
need for greater clarity in the business` direction and
in the corporate strategies it would employ to get there.
In a series of internal workshops, the senior management
team at PARKnSHOP hammered out a new Mission for
the business. "To Be The Family's First Choice For Food
Shopping" and translated this into a set of clear functional
Goals for different parts of the organization.
In tandem with this development, the management team also
mapped out a new process for development, implementation
and monitoring of its corporate strategies.
Recognizing the need for corporate strategies to be 'owned'
by the whole organization, this process involves an annual
review of business results by different work groups, and
an 'upwards cascade' of learnings and suggested refinements
to the existing strategic approach.
These learnings are then debated in a series of Workshops
which in turn produce a set of refined strategies (these
are called Critical Success Factors) for the year ahead.
Each Critical Success Factor (CSF) is 'owned' by one member
of the senior management 'Strategy Group', and this person
is responsible for pulling together cross-functional teams
to 'cascade' the CSF back down the organization and to
establish and implement the plans necessary to execute
it effectively.
As the year progresses, CSF Teams report regularly to
the Strategy Group, thus ensuring a continuous 2-way dialogue
up and down the organization on each Critical Success
Factor. Often these reviews will involve cross-functional
teams involving relatively junior people, but helping
to cement ownership of the CSFs right across the PARKnSHOP
organization.
Each year since the mid-1990s this process is repeated.
Each year, following organization input, some CSFs are
refined, and some dropped, to be replaced by new ones
as the business situation changes. But this focus on the
key strategic priorities, and the cross-organizational
ownership that the process brings, has played a huge role
in changing the nature of its organization and in delivering
the success PARKnSHOP has achieved.
A diagrammatic summary of this process is :
Customer and Market Focus
Alongside the change to the process of Strategic Planning
outlined above, the company has also step-changed its
understanding of, and focus on, its customers.
Like many retailers, PARKnSHOP had historically
had an imperfect understanding of its customers, their
needs and desires as far as food shopping was concerned,
and theirviews of PARKnSHOP and its competitors.
This began to change in the mid-1990s as it developed
a more sophisticated understanding of the segmented nature
of the market in Hong Kong. With this came a+n acknowledgement
that it had only a sketchy insight into the different
needs of the customer segments it had identified, and
with this acknowledgement came a determination to improve
in this area.
Working with external research agencies PARKnSHOP
has now built up an outstanding understanding of its customers,
its competitors, the market-place and its performance
within it, and have put in place relatively sophisticated
systems to track each of these regularly.
More importantly, it has established new systems of sharing
this information internally such that individual managers
have the relevant information to enable them to make data-based,
customer-focussed decisions on a day-to- day basis.
Typical outputs of this increasingly sophisticated understanding
are seen in the development of the company's Superstores,
where it is able to effectively segment its offer for
international customers (Stanley Plaza), affluent local
customers (Festival
Walk)
a mix of affluent, budget and business customers
(Hopewell Centre) or a typical budget housing estate
customer base (Hau Tak Estate).
This customer-focussed, data-driven approach is
now pervasive across PARKnSHOP's business
and, as Information Technology develops exponentially,
provides both one of its biggest opportunities and
biggest challenges for the future. |
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Information and Analysis
Providing up-to-date and relevant information to decision-makers
across the business has been at the core of PARKnSHOP's
drive for Quality.
Each week, the senior management group (the Strategy Group)
review a 'dynamic scorecard' of key business data, which
includes updates on consumer attitudes, pricing and promotions,
customer service performance, and detailed sales and profit
data 'sliced and diced' appropriately inline with the
main internal business processes. Cost centre efficiency
is also tracked and reported weekly to ensure the senior
management team constantly has its 'finger on the pulse
of the business'.
Further down the organization, processes have been designed
to ensure decision-makers have the latest customer, market-place
and cost data available to them in a form relevant to
the decisions they make every day. These processes provide
data that impacts every element of PARKnSHOP's
business - from the product ranges in its stores, to the
pricing and promotions it runs, to the service its staff
provide, to the layout and design of its stores themselves.
Human Resource Focus
PARKnSHOP's approach to the development of its
most valuable resource - its people - has been driven
by a desire to involve them both in the development of
the company's strategic thinking and in the implementation
of the plans that flow from it.
PARKnSHOP's annual process of strategy development
is an inclusive one, with involvement from work groups
across the organization. The company's strategies for
the year ahead are presented by the management team at
its Annual Conference, and feedback from the whole organization
is actively sought both through quantitative surveys,
and via an Employee Forum discussion group.
PARKnSHOP's human resource needs, organizational
structure, and corporate training programmes are reviewed
each year against its corporate goals and the Critical
Success Factors it has developed and, each year, changes
are made to ensure PARKnSHOP has the people, the
structure and the skill-base it needs to deliver its annual
Goals.
Every individual employee has a personal development plan
and a set of performance goals for the year ahead, and
these are reviewed regularly. PARKnSHOP's objective
is to have everyone understanding its corporate strategic
direction, seeing and being enthused by their role in
delivering it, and feeling able to advance in the organization
as far as their abilities and desires allow.
Process Management
PARKnSHOP's approach
to process management is both data-based and interactive,
and is diagramatically represented as follows:
|
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Keys to effective process management
in its organization are:
| (i) |
Ensuring real clarity
about end-user needs for each key process in its
business |
| (ii) |
Putting in place mechanisms to monitor
process outputs and to feed this data back regularly
to process managers to facilitate their evaluation
and refining of the process on an on-going basis
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The company talks internally about having a culture of
Continuous Improvement and of always being prepared to
analyze critically the quality of its work and look for
ways to improve it. Constant focus on the customer, and
the provision of quality data ensures that these attitudes
work in a positive way to keep its business moving forward.
Business Results
Over the last two to three years PARKnSHOP has
made huge progress in the market place, establishing clear
market leadership for the first time in its history.
Customer satisfaction tracking data also show consistently
improving levels of satisfaction in all the key areas
of PARKnSHOP's business: quality and choice, value,
store environment and customer service.
Most importantly the combination of Superstore expansion
and its developments in the area of fresh food, in particular
the hygiene and safety enhancements of its Fresh Check
campaign have begun to change the way people shop for
food in Hong Kong, with levels of customer loyalty to
PARKnSHOP, and particularly to its Superstores, rising
all the time.
Nowhere has the application of Quality Management processes
had a bigger impact on its business than in the area of
fresh food.
In 1996 when PARKnSHOP opened its first Superstore,
it was a na ve new entrant in the centuries-old market
for fresh food in Hong Kong. Today, with 29 Superstores,
it is an increasingly important player and, thanks to
a Quality approach to this area, it is bringing new standards
of hygiene and safety to an area where Hong Kong has traditionally
been extremely vulnerable.
In 1998, recognizing the consumer desire for safer fresh
food, and the hygiene problems endemic in the traditional
fresh food supply chain in Hong Kong, it launched its
Fresh Check campaign, a Quality-Driven programme committed
to "Providing Hong Kong's consumers with fresh food whose
hygiene and safety match the standards of the very best
in the world".
Today, its Fresh Check campaign has made huge strides
towards achieving this Goal, including:
| (i) |
establishment of a regular
programme of hygiene auditing for all its fresh
food suppliers; |
| (ii) |
establishment of Hong Kong retailing's
first-ever dedicated Food Safety Laboratory testing
over 1,000 samples a week for micro-biological and
toxic chemical safety; |
| (iii) |
establishment of a Food Hygiene
Academy for its staff - over 3,500 have successfully
graduated to date; |
| (iv) |
development of Hygiene Improvement
Plans for each of its fresh food suppliers, and
the investment of its resources in training and
equipping its staff to meet these standards; |
| (v) |
annual Food Hygiene Awards for its
suppliers; and |
| (vi) |
development of new, more informative
fresh food labelling, including nutritional content
information. |
Together these results provide compelling justification
for the effort and resource it has put into turning PARKnSHOP
into a truly Quality-Driven organization. |
