Developing Global Strategies
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
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