Strategic Service Vision

WARSAW SCHOOL OF ECONOMICS
DEPARTMENT OF MANAGEMENT THEORY
STRATEGIC SERVICE VISION

MIM 1 - Service Quality in the New Economy
Strategic Service Vision

SERVICE CONCEPT MODEL

Customer Value Operations & Technology Service Concept
Capacity Management Facilities & Location
Performance Measurement
Internationalisation
Process Design & Management
Service Strategy
Customer Information Relationships & Loyalty Technology Communication Customer & Promotion Satisfaction Pricing
Empowerment Job & Role Design
Collaboration
Competencies
Innovation

FIVE KEY COMPONENTS OF A STRATEGY

Operations potential and capability
Corporate objectives
Parameters for change
Operation
Operations task
Environment
Opportunities
Performance objectives
Value
Service concept

STRATEGY DRIVERS
Needs of stakeholders
Corporate objectives
Activities of competitors
Operation
New services, skills, etc. Visionary leadership
Environment
Performance objectives
Repositioning of competitors
Service concept
Needs of customers 4

THE FIELD OF STRATEGY MAKING

Setting objectives desirable future
WANT
SHOULD
Managing the firm-environment fit
CAN
Allocating resources
ALLOWED
Defining ethical standards


STRATEGIC SERVICE VISION
The need of most service organizations to plan as well as direct marketing and operations as one function has led to the formation in leading companies, so called Strategic Service Vision (SSV).
(Heskett, 1987)

EXTERNALY ORIENTED SSV (1)

Target Market Segments What are common characteristics of important market segments? What dimensions can be used to segment market? demographic? psychographic? How important are various segments? What needs does each have? How well are these needs being served? In what manner? By whom? Positioning How does the service concept propose to meet customer needs? How do competitors meet these needs? How is the proposed service differentiated from competitors? How important are these differences? What is good service? Does the proposed service concept provide it? What efforts are required to bring customer expectations and service capabilities into allignment? Service concept What are important elements of the service to be provided, stated in terms of results produced for customers? How are these elements supposed to be perceived by the target market segment? By the market in general? By employees as a whole? By others? How do customers perceive the service concept? What efforts does this suggest in terms of the manner in which the service is: designed? delivered? marketed? ValueValue-Cost leveraging To what extent are differences between perceived value and cost of service maximized by: Standardization of certain elements? Customization of certain elements? Emphasizing easily leveraged services? Management of supply and demand? Control of quality through: Rewards? Appeal to pride? Visibility and supervision? Peer group control? Involving the customer? Effective use of data? To what extent does this effort create barriers to entry by potential competition

EXTERNALY ORIENTED SSV (2)

Operating strategy What are important elements of the strategy/? Operations? Financing? Marketing? Organization? Human resources? Control? On which will the most effort be concentrated? Where will investment will be? How will quality and cost be controlled? Measurement? Incentives? Rewards? What results will be expected versus competition in terms of: Quality of service? Cost profile? Productivity? Morale and loyalty of servers? Strategy System Integration To what extent are the strategy and delivery system internally consistent? Can need of the strategy be met by delivery system? If not, what changes must be made in: The operating strategy? The service delivery system? To what extent does the coordination of operating strategy and service delivery system ensure: High quality? High productivity? Low cost? High morale and loyalty of servers? To what extent does this integration provide barriers to entry by competition? Service Delivery System What are important features of the service delivery system including: The role of people? Technology? Equipment? Layout? Procedures? What capacity does it provide? Normally? At peak levels? To what extent does it: Help ensure quality standards? Differentiate service from competition? Provide barriers to entry by competition?
Basic SSV elements
Integrative SSV elements
(Heskett, 1991)

ELEMENTS OF AN EXTERNALLY ORIENTED SERVICE STRATEGY
Identification of Target Market Segments Positioning (Customer focus) Development of a Service Concept to address tageted customer needs Maximising value Development of Operating Strategy, to support the service concept Transformation of strategy into system Design of a Service Delivery System to support the Operating Strategy Final Output (Quality)
(Na podstawie Heskett, 1991, de Matta 1995)

TARGET MARKET SEGMENTS
Common characteristics Dimensions to segment the market Demographics Psychographics Need of each segment By whom and in what capacity are the needs being served
10

SERVICE CONCEPT
Results produced for customers Service perception by each target segment, employee, market in general Individual customers service perception Service design, delivery and marketing requirements
11

OPERATING STRATEGY
Operations, financing, marketing, organisation, human resources Controlling quality and cost Incentives and rewards Comparing service quality, cost, productivity, morale and loyalty of servers with competition
12

SERVICE DELIVERY SYSTEM
Workers, technology, layout, systems and procedures Normal and peak service capacity Quality standards Service differentiation Risk of copy cats
13

TASKS AT THE STAGE OF SERVICE CONCEPT INTEGRATION WITH OPERATING STRATEGIES
Maximise the difference between service value and service cost by: standardisation or customisation supply and demand management service quality control creating barriers to entry by competition
14

SSV EXAMPLE: INSURANCE COMPANY

HARTFORD STEAM BOILER INSPECTION & INSURANCE COMPANY
Target Market Companies using boilers and related equipment with high operating risk Service Concept Emphasise cost reduction in addition to risk reduction Operating Strategy Concentrate on a few types of equipment, hire more engineers than competition, maintain close contact with customers Service Delivery System Maintain a large database on equipments operating and performance characteristics. Inspect equipment before and after it is insured.
15

ELEMENTS OF AN INTERNALLY ORIENTED SERVICE STRATEGY
Directing the vision inward by targeting employees as well as customers Elements are the same as the externally- oriented SSV
(Na podstawie Heskett, 1991, de Matta 1995)
16

INTERNALY ORIENTED SSV (1)

Target employee group What are common characteristics of important employee group? What dimensions can be used to describe these employee groups? demographic? psychographic? How important are each of these groups to the delivery of the service? What needs does each group have? How well are these needs being served? In what manner? By whom? Positioning How does the service concept propose to meet employee needs? How do competitors meet these needs? How relationships with employees differentiated from those between competitors and their employees? How important are these differences? What is good service to employees? Does the proposed service concept provide it? What efforts are required to bring employee expectations and service capabilities into alignment? Service concept What are important elements of the service to be provided, stated in terms of results produced for employees and the company? How are these elements supposed to be perceived by the targeted employee groups? How are these elements perceived? What further efforts does this suggest in terms of the manner in which the service is: designed? delivered? ValueValue-cost leveraging To what extent are differences between returns to employees and the level of effort they put forth maximized by: The design of service concept? The design of the elements of the operating strategy? Job design? The leveraging of scarce skills with a support system? The management of supply and demand? Control of quality through: Rewards? Appeal to pride? Visibility and supervision? Peer group control? Involving the customer in the delivery of the service? Effective use of data?
17

INTERNALY ORIENTED SSV (2)

Operating strategy How important is direct human contact in the provision of the service? To what extent have employees been involved in the design of the service concept and operating strategy? How desirable is it to: Increase employee satisfaction? Improve employee productivity? What incentives are provided for: Quality ? Productivity ? Cost ? How does the strategy address employee needs for ? Selection ? Assignment ? Development ? Evaluation ? Compensation ? Association? Strategy -systems integration To what extent are the strategy and delivery system for serving important employee groups internally consistent? To what extent does the integration of operating strategy and service delivery system ensure: High quality? High productivity? Low cost? High morale and bonding of the target employee group? Service delivery system What are important features of the service delivery system including: The role of people? Technology? Equipment? Layout? Procedures? What does it require of target employee groups? Normally? At peak periods of activity? To what extent does it help employees: Meet quality standards? Differentiate their service from competition? Achieve expectations about the quality of their work life?
Basic SSV elements
Integrative SSV elements
(Heskett, 1991)
18

SERVICEMASTER CO., ILLINOIS, USA
SSV EXAMPLE: INSURANCE COMPANY (1)
Business: Manages support services for hospitals, schools and industrial companies Target employee group Functionally illiterate employee Service Concept Provide educational and motivational programme to help these employees to be something
19

SERVICEMASTER CO., ILLINOIS, USA
SSV EXAMPLE: INSURANCE COMPANY (2)
Operating Strategy Invest in training and laboratory for developing new equipment and materials. Target a 20% growth per year from expansion of existing operations rather than acquisitions. Service Delivery System Redesign jobs and develop equipment and pictorial, colour coded instruction materials. Hold weekly training programmes Help people grow.
20

OTHER SERVICE STRATEGIES (1)
Stressing service quality control that is based on: enhanced visibility of service deliverer team building generous incentives customer feedback peer group control (professional standards)
21

OTHER SERVICE STRATEGIES (2)
Appraising the effects of scale on service efficiency and effectiveness (e.g., Visa, Hyatt, Marriott, SAS, power plants) Substituting information for other assets the use of forecasting and inventory control techniques (e.g., car & appliance repair shops, credit card company)
22

TODAY STRATEGIES?
From mass customisation to individualisation From forecasting to quick response From delivering service to delivering experience From inventory control to pull strategies From quality control to total quality From cost orientation into revenue and value orientation From procedures into flexibility From best practices into new practices
23

Strategic Service Vision

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Strategic Service Vision

Uploaded by

Copyright:

Available Formats

WARSAW SCHOOL OF ECONOMICS

DEPARTMENT OF MANAGEMENT THEORY