Developing Global Strategies

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Developing Global Strategies for Service Businesses

Session 11

1

Globalization Framework for Service Businesses
• Industry Globalization Drivers
• • • • • • • • Common customer needs Global customers Global Channels Global economies of scale Favorable logistics Information technology Government policies and regulations Transferable competitive advantage 2

Globalization Framework of Service Businesses
• Special Characteristics of Service Businesses
• • • • • • • • Performance not an object Customer involvement in production People as part of service experience Quality control problems Harder for customers to evaluate Lack of inventories Importance of time factor Electronic channels of distribution 3

Globalization Framework for Service Businesses
• Three Categories of Services
• People processing services – involve tangible actions to customers in person. The customer becomes a part of the production process, which tends to be simultaneous with consumption. ex: passenger transportation, health care, food service.

• Possession processing services – involve tangible actions to physical objects to improve their value to customers. The object needs to be involved in the production process, but the customer does not. ex: freight service, car repair, laundry.

• Information based services – involve collecting, manipulating, interpreting, and transmitting data to create value. ex: accounting, banking, education, legal services.
4

Globalization Framework for Service Businesses
• Global Strategy
• Global market participation strategy – building significant share in global strategic markets. ex: Tokyo, London, New York.

• Global services – a standardized core product or
service that requires a minimum of local adaptation.
ex: In Britain, McDonald’s includes both coffee and tea on the menu, while it serves beer in France and Germany.

• Global location value chain – where to locate a
business’s activities and how to coordinate them.
ex: sending checks to be processed in a different country.

• Global marketing of services – applying a uniform
marketing approach around the world, although not all elements of the marketing mix need to be identical. ex: a strong global brand image.
5

Supplementary Services
• Supplementary services - are used to add value and provide differentiation from competition, enabling firms do develop effective globalization strategies • The Flower of Service – composed of eight supplementary service categories

6

Supplementary Services

7

8 Supplementary Services to the Core Process
• Information – giving customers relevalnt information about the service. • Payment – ease and convenience of payment. • Consultation – involves a dialogue to probe customer requirements and then develop a tailored solution. • Order Taking – making it wasy to place orders or reservations in the language of their choice. • Hospitality – take care of the customer by considering cultural definitions of appropriate hospitality, which may differ widely from one country to another. • Safekeeping – looking after a customer’s possessions. • Exceptions – fall outside of normal service delivery. This includes special requests, handling customer complaints, and problem solving. • Billing – clear and timely billing. 8

Elements of a Strategic Service
Target Market Segments
• Common characteristics of important market segments. • Market segmentation criteria: Demographic? Psychographic? • How important are the individual segments? • What needs does each have? • How well are these needs currently served? In what form? By whom?

Service Concept
• Important elements of the service offered in terms of benefits / value for the customer. • How are these benefits to be perceived by the target segment? By employees? By the market in general? By others? • How is the service concept perceived? • What efforts are required in the way in which the service is: Designed? Delivered?...
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