session iv services strategy - copy - copy
TRANSCRIPT
-
8/3/2019 Session IV Services Strategy - Copy - Copy
1/28
Service Strategy
What is service value? What is a
Strategy? Service competitiveness?Service Strategy?
-
8/3/2019 Session IV Services Strategy - Copy - Copy
2/28
What is Service Strategy?
Service strategy is the set of plans and
policies by which a service organization
aims to meet its service objectives Service strategy is a deliberate search for
a plan of action that will develop a
businesss competitive advantage and
compound it.
-
8/3/2019 Session IV Services Strategy - Copy - Copy
3/28
Why an organization needs
service strategy To draw a route to desired outcomes on
service to defend itself against competitors
and to remain competitive To focus its activities and energies
To help to define service it offers
To provide consistency in service and helpreduce uncertainty
-
8/3/2019 Session IV Services Strategy - Copy - Copy
4/28
Service Strategy Concerns
Refining of mission, long term goals etc. to
operational goals
It translates strategic positioning into a clear
operational plan
Decision making on aspects of capacity, facility
size. Facility location, skills, service quality,service delivery, service recovery
-
8/3/2019 Session IV Services Strategy - Copy - Copy
5/28
Steps in Service Strategy
Setting of order winners and order
qualifiers
Target Market segment Setting of service concept
Setting of operating system
Setting of service delivery system Taking decisions on locations, facilities,
execution activities
-
8/3/2019 Session IV Services Strategy - Copy - Copy
6/28
Order Qualifiers
Those competitive priorities ,that respond to
What characteristics must my service
have just to be able to compete? Fast food--- speed
Package delivery---- packaging
design(safe at destination) Air travel------- time
Gourmet restaurant-------- environment
-
8/3/2019 Session IV Services Strategy - Copy - Copy
7/28
Quality Winners
What characteristics should I emphasize to
convince the customer to buy my service
instead of my customers Oberoi hotels, Hiltons, ----- Luxury
Jet Airways--- price
Shatabdi travel----- time
-
8/3/2019 Session IV Services Strategy - Copy - Copy
8/28
Target market segment
Determine common characteristics
Identify dimensions to segment market
Develop demographic, geographic or
psychographic basis
Determine importance and needs of
segmentation as perceived by the organization Monitor how well the needs are being served?
Identify who is responsible to serving the needs
-
8/3/2019 Session IV Services Strategy - Copy - Copy
9/28
Example:
1.Who could be the customers for
Macdonald?2. Who could be the customers for a
gourmet lunch at a luxury hotel.
3.Who could be the customers for a linervoyage
-
8/3/2019 Session IV Services Strategy - Copy - Copy
10/28
Service Concept
Service concept is set of competitive priorities that targetmarket values
Focus is on results that must be produced
It describes how the target market, employees andmarket as a whole perceive the service elements
Elements of service to be provided, in terms of results forthe customers
Alignment of service concept with business of the
organization What efforts are implied to design, deliver and market
the concept?
NEEDS DETAILED DISCUSSION
-
8/3/2019 Session IV Services Strategy - Copy - Copy
11/28
Operating Strategy
What are important elements of strategy in
operations,
Which of these require concentration of efforts?
Where will investments be made?
How will quality and cost be controlled?
What results will be expected against
competition in areas of cost, service, quality,productivity, morale of servers
-
8/3/2019 Session IV Services Strategy - Copy - Copy
12/28
-
8/3/2019 Session IV Services Strategy - Copy - Copy
13/28
Competitive priorities
The set of operationally oriented
dimensions that companies can compete
on ------ Competitive priorities
Cost, quality, delivery(time),service,
flexibility, environment (Ambiance)
-
8/3/2019 Session IV Services Strategy - Copy - Copy
14/28
Services as Competitive
Advantage:Services stand out in areas of:
Nature of output
Degree of customer contactCA is built around these two imperatives
-
8/3/2019 Session IV Services Strategy - Copy - Copy
15/28
Service as CA
Service organizations can compete on:
1. Outcome ( nature of)
2. Experience ( customer contact plays a vital role)
Five positions are: Failing: below industry expectations
Arrogant/Complacent: outcome is excellent butcustomer treatment is poor
Retaining customers in the short run: possible to
retain customers for short time even if outcome is poor
Average: Little to choose from several players
World Class:As the best in all that is done
-
8/3/2019 Session IV Services Strategy - Copy - Copy
16/28
-
8/3/2019 Session IV Services Strategy - Copy - Copy
17/28
Service Growth Planning
Mfg. companies grow by:
Adding machines, building new plant,expanding existing facility
High volumes on principles of economy ofsize.
Standardization
Centralization of controls
Going nearer to site of availability of rawmaterials, cheaper labour, availability of skills,state subsidies. Infrastructure, tax concessions
-
8/3/2019 Session IV Services Strategy - Copy - Copy
18/28
Service organization ,
Services have different characteristics:
Rely on extensive customer contact
Location has to be near to customers Decentralization is desired
Economy of size is detrimental in manyareas
-
8/3/2019 Session IV Services Strategy - Copy - Copy
19/28
Strategy for Growth of Services
1. Multisite service firms
2. Industry Roll-up
3. Franchising
-
8/3/2019 Session IV Services Strategy - Copy - Copy
20/28
Multi-site service firms
Customer contact varies from place to
place and hence same rate of success is
not obtained.
The model cannot be replicated from place
to place
Multi-site firms have to move away from
the owners personality quirks,
-
8/3/2019 Session IV Services Strategy - Copy - Copy
21/28
Multi-site service life cycle Stages
1.Entrepreneurial stage
Firms work under the owners personality quirks
Skills of local marketing and PR matter most
Motivation of employees matters
Innovation is the key
Service delivery system, operating strategy are
developed for replicating elsewhere
-
8/3/2019 Session IV Services Strategy - Copy - Copy
22/28
2. Multi-site rationalization
Development of procedures, training, accountingsystems vital for multi-site
Individual personality of entrepreneur is lost ordiluted
3 Growth
Operations and design are already established
Sales publicity becomes feasible against localpublic relations
Wider consumer audience becomes a criticalskill
-
8/3/2019 Session IV Services Strategy - Copy - Copy
23/28
4. Maturity
Challenges to maintain market position
Maintaining standards and operationalcontrol over dispersed employees is
difficult
Low level employees start leaving asthese are not at the hub of an exciting new
idea.
-
8/3/2019 Session IV Services Strategy - Copy - Copy
24/28
5Decline/ Regeneration
Service concept becomes stale
Decline sets in revenues Regeneration is the necessity through
revision of service concept
-
8/3/2019 Session IV Services Strategy - Copy - Copy
25/28
-
8/3/2019 Session IV Services Strategy - Copy - Copy
26/28
Roll ups
Use of traded stock to buy up small firms.
Increases market coverage
Roll-ups succeed as single unit service setup is retained.
Local culture and customer contact is
retained
Once single units, now can share facilities
and bring down costs
-
8/3/2019 Session IV Services Strategy - Copy - Copy
27/28
Franchising: sale of rights to operate to
someone else in return for a portion of sales as
royalties
Rapid growth
In absence of patenting , it provides easy way
to access the specifications, practices,
controls. There is thus danger of leakage of
secrets.
franchise can lead to a situation of better
profits
-
8/3/2019 Session IV Services Strategy - Copy - Copy
28/28
Franchising
Area Advantage Disadvantage
Facilities
Finance
Franchisee bears
Franchisee incurs
Limits control
Franchiser saves
Operations
Time
Franchisee
entrepreneurial spirit
Fast
Controls are difficult
Customer contact Depends on franchisee customers can shift
loyalty to franchisee
Quality Franchisee has a lot to
decide
Extremely difficult for
franchiser
Profits
Marketing
Franchisee profits get
limited
Franchiser gains
Brand gets established