Question: Provide a synopsis of the case given below – Outline key service management issues arising from the case (listed in one paragraph). Highlight the problems cited in the case, using sub-headings (one paragraph per problem)
Traditional men’s hairdressers (barbers) in Japan provide a haircut, a shampoo, a shave and a head and shoulder massage. This service usually takes about 40 minutes to one hour and the charge is usually around 4,000 to 5,000 yen (about £35). One day Mr Kuniyoshi Konishi, a senior manager in one of the big commercial firms in Japan, while having a haircut in one of the top hotels in Tokyo, realised that the core value of this service was the haircut which only takes about 10 minutes. He thought by just providing the core service (the haircut), a lot cheaper and a lot quicker, one might be able to open up a new market and attract a large number of customers. He said ‘Busy people seek shorter service if the quality of the outcome (haircut) is the same.’ He added ‘You can collect the money today which you lost yesterday but you can’t collect the time you lost yesterday.’ As a result, he left his well-paid job and launched QBNET (Q for quick and B for barber). His service concept was, at maybe no surprise to ‘us’ but quite a shock for the Japanese, a quick and inexpensive haircut (about 1,000 yen, £10), no shampoo, no shaving, and no massage. He focused on making things as simple, cheap and efficient as possible. He provided small vacuum cleaners to quickly remove hair around the neck after the cut. Disposable paper towels were used around the neck and disposable paper combs were also provided. The interior of the shop was simple; there was no cash register, no telephone, and no toilet. There were no chairs for people waiting but a small bar where customers could lean. On the first day of opening the shop had over 100 customers. He quickly expanded to a second and then a third shop, developing efficient processes as he went along. For example, when the customer arrives he has to buy a fixed-price ticket from a vending machine, and the time when the customer arrived is noted. When the employee starts working on the customer he registers the number of the customer’s ticket so that the difference between the time when the customer bought the ticket and the time started is recorded. This is used to provide potential customers with the waiting time using lights on the outside of the shop. A green light means there will be no waiting, a yellow light means a wait of five to ten minutes, and red means over ten minutes. The door of the shop also has a sensor to count the number of people passing through. All this information is transmitted via the internet to the head office. To help expand his business and deal with the problem that the barber’s job was now quite routine and standardised, he paid higher salaries than traditional barbers. He also started a Business-Partner Scheme whereby an employee who had worked for three years could take over the franchise for the shop paying 10% of turnover plus a shop rental charge. In 2006, nine years after opening the first shop in Kanda in Tokyo, Mr Konishi had 291 shops with a total turnover of about 3.8 billion yen (about £29m). He then sold the business. By 2010 QBNET was running nearly 400 shops including premises in Singapore, Hong Kong and Thailand.