1. MANAGEMENT 435 SERVICE MANAGEMENT
PowerPoint Set 2

2. Topic 5 Service Strategy
Strategy is the first step in the management process.
Growth of the service sector in the US economy
Pg 37: “The purpose and place of a service firm in the market begins with an entrepreneur's idea and an unmet need (leading to) formulating a strategic service vision”
Competitive environment of services is different/difficult 36
Low entry barriers. Low economies of scale. High demand fluctuations. Little buying power against suppliers. Substitutions threatening. Harder to attain customer loyalty. Exit barriers.

3. Service Strategy Strategy Formulation Process Mgmt 339 Pg 35-
Environmental analysis.
External environment. Factors. Opportunities and threats
Internal environment. Elements. Strengths and weaknesses
Vision. Mission and values
SWOT analysis. Life cycle stage.
Grand strategies: Growth (concentration/expansion; diversification; vertical integration/using economies of scope; mergers/acquisitions)
Competitive Strategies (also called Business level strategies). 38-
Cost leadership 39; Differentiation 40; Focus 41
Cost leadership: low cost services; standardized services; no personal service; no flexibility; no conveniences 39
Differentiation by quality, availability (convenience; speed), dependability (safety), flexibility/variety (customization; personalization) 40-41
Focus 41: Goes with CL and Differentiation

4. Service Strategy Implementing strategy 37 Implementation tools
Strategic (long term) decision making areas
Service design. Recall the 5 elements in service package
Service process design
Technology
Capacity
Quality
Facilities: Location. Layout. Focus
Workforce
Suppliers. Supply chain
Implementation tools
Policies; Procedures; Budgets

5. Service Strategy Role of IT in competitive strategy 42 – 50
Information for customers. Information about customers. Supplier transactions. Electronic record keeping/privacy and security issues. Making intangible services more tangible. Influencing customer expectations and perceptions, Reducing uncertainty and perceived risk
Service strategy is something that evolves over time
Four stages 51
Service strategy and service process – Volume/variety considerations
How firms formulate strategy. New service development process
Articles 12, 14 and 15.. Pg. 66-
Service blueprinting 71 Flowcharts 72

6. Service Strategy Global service strategy issues
Domestic growth and expansion strategies 340
Single site v. Multisite. Single service v. Multiservice
Focused Service; Clustered Services; Focused Network; Diversified Network
Franchising strategy Benefits/Issues
Generic International Strategies 346
Force towards global integration
Force towards Local Responsiveness
Global, Multi domestic and Transnational strategies

7. Service Strategy
Factors in the international environment crucial for services 347
Country – political/legal; economic factors
Customers – socio-cultural; Cultural transferability 348
Competition
Company resources and corporate culture
Workers: norms and values 348
Hofstead’s five dimensions 349 – Power Distance, Individualism, Masculinity, Uncertainty Avoidance, Long term orientation
Common global service strategies 351
Multi-country expansion; Importing customers; Following customers; Service Off shoring; Beating the clock
Articles 16 and 19
Service Off-shoring issues
Article 18

8. Topic 6 Service Design Three areas designed together
Service, Marketing and HR
What do we design – Service Package
Explicit services, Implicit services, Facilities, Facilitating Goods, Information
Design principles
Information sources. QFD 116
Phases of design. Feasibility studies
Ensuring effective delivery of designed service. Methods
Generic approaches to designing explicit services 75
High volume standardized services 75 – Production line approach. Technology predominant
Customer participation in the process 77 Self service and SST.
Customer contact level 78 High and low contact operations. Separation 79

9. Service Design Designing implicit services and Facilitating goods
Capacity management: managing demand and supply 257 –
Yield management 270
Waiting time/appointment systems 262; 293-
Complaint systems. Call centers
Service recovery
Cultural and linguistic issues
Service standards
Supplier issues
Designing Facilities ; 225 -
Locating service facilities. Commercial facilities. Public facilities
Strategic location considerations 226
Servicescapes. 198 Physical surroundings
Layout Balancing flows. Minimizing distances
Selected Articles from