service operation management 9

Growth and Globalizationof Services

Generic Growth and Expansion Strategies

Focused service – A single location and service expands by adding capacity or peripheral services.

Clustered service – Service firms with large facilities grow by diversifying the services they offer.

Focused network – A single service firm adds sites to grow but maintains control and consistency across sites (e.g. franchising).

Diversified network – Firms that grow through acquisition often combine the multisite and multiservice strategies.

Globalization of ServicesGeneric International Strategies

TransnationalStrategy

GlobalStrategy

Multi-domesticStrategy

NoInternational

Strategy

Low High

Force Towards Local Responsiveness

Force Towards GlobalIntegration

High

Low

International Strategic Service VisionService Delivery

SystemOperating Strategy

Service Concept Target Market Segments

Available technology?Infrastructure?Utility service? Labor market norms and customs? Space availability? Interaction with suppliers? Educating customers?    

Appropriate managerial practice?Participative?Autocratic? Labor market institutions?Government regulations?Unions? Host government policies? Language?Front office?Back office? 

What are customer expectations?Perception of value?Service ethic? Service encounter?Language?Acceptance of self-serve? What are the usage patterns? Cultural transferability?  

What are the market segments?Domestic?Multinational?Tourist? What are important cultural differences?Language?Life style?Disposable income? What are the workforce demographics?Skills?Age distribution?Attitudes?Work ethic?

Global Service Strategies Multi-country expansion – Replicating a service in more than one country,

often with little adaptation

Importing customers – Attracting customers to an existing site rather than building overseas.

Following your customer – Expanding overseas to serve existing customers with multinational operations

Service offshoring – Outsourcing of activities internationally, often to reduce cost

Beating the clock – Using service locations around the globe to achieve 24/7 service