Apaar Singh MBA EPT

Class Test
Dt 17.10.21
POM 711 - Service Operations Management

Q.1. Which are the key sectors in Indian economy? What is importance of service sector in
indian economy, pl elaborate?
Ans

In Indian Economy there are major three key sectors-

a) Primary Sector- It provides food & raw material. Agriculture, Fishing, Farming, Mining
b) Manufacturing Sector - Car Factory, Brewery, Flour Mills
c) Service Sector – Banking, Retail Shops, Restaurants.

Importance of service sector in Indian economy

The service sector makes an important contribution to GDP in most countries, providing
jobs, inputs and public services for the economy. Trade in services can improve economic
performance and provide a range of traditional and new export opportunities.

i) This sector helps in the development of the primary and secondary sectors.
ii) The activities related to this sector do not produce key good but they are an aid or a
support for the production process.
(iii) It also provides essential services that may not directly help in the production of goods
such as services of teachers, doctors, barbers, lawyers, etc.
(iv) In recent times, certain new services based on information technology etc have become
more important.
(v) The services which are included in the tertiary sectors are transport, storage,
communication, banking, trade, etc. are very crucial in growth of economy.

Q.2. What are the different type of services, pl share with examples?

Ans-
The different types of service are
a) Financial Services – Financing , Leasing, Insurance
b) Infrastructure Services – Communication, Transportation, Utilities, Banking
c) Manufacturing Services- Finance, Accounting, Legal, R &D and design
d) Distribution Services- Whole selling, Retailing, Repairing
e) Personal Service- Healthcare, Restaurants, Hotels
f) Consumer Service- Self Service
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g) Business Service – Consulting, Auditing, Advertising , Waste Disposal

h) Government Services- Military, Education, Judicial, Police, fire protection.

Q.3. What are the distinctive characteristics of Services?

The distinctive characteristic of Service is as follows-

a) Simultaneity – Process and outcomes are coupled; customer facing activities cannot be
inventoried, increased importance of matching capacity to demand.
b) Customer Participation in service process – Attention to facility design, opportunities for
coproduction, concern for customer and employee behavior.
c) Perishability- Opportunity loss of idle capacity, capacity utilization is a significant
managerial challenge due to variable customer demand and lack of inventory for
absorbing fluctuations.
d) Intangibility- Customer cannot assess quality a prior importance of reputation.
e) Heterogeneity – Customer involvement in delivery process results in variation in service
from customer to customer.

Q.4. What is service strategy, share with any example of your choice?
Ans –

Service strategy helps organizations determine the types of services they should offer and the
markets to target. The goal is to make strategic decisions when planning and delivering targeted
services to drive long-term growth and success. It provides guidelines for service organizations
for designing services, competitive strategies and service delivery systems.

There are four building blocks of the service strategy stage: perspective, position, plan, and
pattern.

These four P’s guide your service strategy and play an integral role in how to outline and
implement service plans. Strategies that lack any of these components are less likely to
succeed. The basic definitions and applications for each strategy stage: 

 Perspective: Describe vision or direction for services. 

 Position: Compare strategy with competitors to understand how to best position in the
market.
 Plan: Identify the actions will take to achieve goals and overarching vision.
 Pattern: The fundamental and ongoing actions of organization will take to run
smoothly over time. This includes processes, policies, schedules, budgets, and management
systems. 
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Example - Customer Service strategy of a call centre

The perfection is required by customers and to continue/compete in the business the strategies
needs to be formulated –
 Optimize Agent training – Training to agents to meet customer needs.
 Choose the right tools- Help desk & call centre software shall meet the needs.
 Improve call centre KPI- to measure the customer service efforts.
 Personalize the experience (omni channel support)– Interaction on phone, email,
chat , social media, support requests, events.
 Make data driven decisions- Use of customer Analytics report.
 Optimize Quality Assurance – Help to enhance service quality, increase
efficiency & reduce wasteful spending.

Q.5. Explain BCG matrix?

Ans – Boston Consulting Group (BCG) Matrix is a four celled matrix (a 2 * 2 matrix) developed
by BCG, USA and it is a renowned corporate portfolio analysis tool. It provides a graphic
representation for an organization to examine different businesses in its portfolio on the basis of
their related market share and industry growth rates.
It is a two dimensional analysis on management of SBU’s (Strategic Business Units). Which is a
comparative analysis of business potential and the evaluation of environment.According to this
matrix, business could be classified as high or low according to their industry growth rate and
relative market share.
Relative Market Share = SBU Sales this year leading competitors sales this year.

Market Growth Rate = Industry sales this year - Industry Sales last year.
The analysis requires that both measures be calculated for each SBU. The dimension of business
strength, relative market share, will measure comparative advantage indicated by market
dominance. The key theory underlying this is existence of an experience curve and that market
share is achieved due to overall cost leadership.
BCG matrix has four cells, with the horizontal axis representing relative market share and the
vertical axis denoting market growth rate. The mid-point of relative market share is set at 1.0. if
all the SBU’s are in same industry, the average growth rate of the industry is used. If all the
SBU’s are located in different industries, then the mid-point is set at the growth rate for the
economy.
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Resources are allocated to the business units according to their situation on the grid. The four
cells of this matrix have been called as stars, cash cows, question marks and dogs. Each of these
cells represents a particular type of business

1. Stars- Stars represent business units having large market share in a fast growing industry.
They may generate cash but because of fast growing market, stars require huge
investments to maintain their lead. Net cash flow is usually modest. SBU’s located in this
cell are attractive as they are located in a robust industry and these business units are
highly competitive in the industry. If successful, a star will become a cash cow when the
industry matures.

2. Cash Cows- Cash Cows represents business units having a large market share in a
mature, slow growing industry. Cash cows require little investment and generate cash that
can be utilized for investment in other business units. These SBU’s are the corporation’s
key source of cash, and are specifically the core business. They are the base of an
organization. These businesses usually follow stability strategies. When cash cows loose
their appeal and move towards deterioration, then a retrenchment policy may be pursued.

3. Question Marks- Question marks represent business units having low relative market
share and located in a high growth industry. They require huge amount of cash to
maintain or gain market share. They require attention to determine if the venture can be
viable. Question marks are generally new goods and services which have a good
commercial prospective. There is no specific strategy which can be adopted. If the firm
thinks it has dominant market share, then it can adopt expansion strategy, else
retrenchment strategy can be adopted. Most businesses start as question marks as the
company tries to enter a high growth market in which there is already a market-share. If
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ignored, then question marks may become dogs, while if huge investment is made, then
they have potential of becoming stars.

4. Dogs- Dogs represent businesses having weak market shares in low-growth markets.

They neither generate cash nor require huge amount of cash. Due to low market share,
these business units face cost disadvantages. Generally retrenchment strategies are
adopted because these firms can gain market share only at the expense of
competitor’s/rival firms. These business firms have weak market share because of high
costs, poor quality, ineffective marketing, etc. Unless a dog has some other strategic aim,
it should be liquidated if there is fewer prospects for it to gain market share. Number of
dogs should be avoided and minimized in an organization.