1. MKSE and the Intangibles: puzzling over the ‘service’ economy JC Spender LUSEM & ESADE

2. agenda are ‘services’ different ? knowledge versus agency researching service firms future of work 14-July-2011MKSE 20111/13

3. what makes services different ? tertiary sector, electricity as ‘service’ intangibles, the ‘knowledge-economy’, Penrose’s point timing, no inventory, consume as produced transaction not pre-determined - responding to the particular trends - rising consumer power, changing consumption subjective goods, tourism Veblen goods, Giffen goods, persuasive advertising ‘service economy’ does not follow economists’ rules 14-July-2011MKSE 20112/13

4. so what ? from imposing planning and efficiency-seeking towards a responsive relationship with consumer from imposing stability towards embracing instability exploiting unique non-forecastable needs/opportunities anti-economic theory of the firm - imagination constrained, not resource constrained service challenge - create manageable order from chaos 14-July-2011MKSE 20113/13

5. production - service planning - imposing consumption pattern on the consumer servicing the uniqueness of the consumer’s needs and desires it’s NOT about fitting ‘service goods’ into a planning model 14-July-2011MKSE 20114/13

6. analysis breaks down - engage agency analysis - universals under which the unique is categorized (e.g. medical patient - or person ?) how to respond to the unique and construct a customized solution ? service as ‘business art’ - imagination supported by, not subordinated to, ‘knowledge’ bricolage - making novel use of what is available 14-July-2011MKSE 20115/13

7. service as business’s art-form 14-July-2011MKSE 20116/13 imaginatively combining what’s available

8. service firm NOT about categorizing customers managing the imagination of the service-provider expanding knowledge available - but what knowledge ? K-categories as components of service business model 14-July-2011MKSE 20117/13

9. simple (but useful) business models which suggest K-categories NOT solutions SWOT BCG matrix Balanced Scorecard Porter’s 5-forces 14-July-2011MKSE 20118/13 Step 1 - select K-categories that seem to matter in the particular situation

10. general idea there is NO certain or necessary definition of the service firm - management choose K-categories based on their experience, competitors’ actions, R&D forecasts, economic history, academic theories, market surveys, etc. A B C D E Step 2 - find a way to enter and operate within the ‘strategic opportunity space’ - constructed picture of the firm’s world 14-July-2011MKSE 20119/13

11. K-dimensioned value-add 14-July-2011MKSE 201110/13 our business model or ‘vision ’ A what we know about using A that the market does not what we know about using B that the market does not B what we know about coordinating A with B that the market does not it’s all about K-based micro-monopoly

12. from concept to value-adding division of labor, resource contracts, etc. persuade others into ‘the vision’ actualize value-adding process A B C D E 14-July-2011MKSE 201111/13 drawing on and combining the palette of categorizing and process knowledge

13. service K-categories intangibility, inseparability, variability, perishability, rent- ability (Shostack) setting, quality, relationship/brand, demand management (Swartz & Iocobucci) diagnose needs/desires, value-add process, delivery, Veblen/Giffen pricing, acquire/maintain reputation (Spender) there are NO universal K-categories - so why not ask the managers/entrepreneurs ?? 14-July-2011MKSE 201112/13

14. service as the future ( and past ) of work growth of services, outsourcing managing service provider’s imagination, franchising expanding K-categories available, IT impact from planning and stability towards the precariat networking and other dynamic modes of organizing 14-July-2011MKSE 201113/13