Professional Documents
Culture Documents
MGS 8770
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Service Strategy
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Learning Objectives
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2
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What Is Strategy?
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3
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Internal focus
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Match
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4
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Market Positioning
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Common attributes
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5
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Positioning Map
Example
Palace, a successful 4-star hotel in a large city, used positioning map to
develop a better understanding of potential threats to their established
market position. It was an elegant old hotel located on the edge of the
citys booming financial district. Its competitors include 8 4-start
establishments and the 5-star rated Grand Hotel. It had been very
profitable in recent years with an above-average occupancy rate.
However, the general manager and his staff saw problems on the horizon
as permission had recently been granted for four large new hotels in the
city, and the Grand Hotel had just started a major renovation and
expansion project.
Teamed with a consultant, Palaces management identified four attributes
and their measures: 1. room price; 2. level of physical luxury (relative
ranking using benchmark of Grand-the most luxurious, and Airport Plazathe least luxurious); 3. level of personal service (rooms per employee
ratio); and 4. location (distance from the stock exchange).
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Positioning Map
Expensive
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Grand
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Regency
PALACE
Shangri-La
High
Service
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Moderate
Service
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Atlantic
Sheraton
Alexander IV
Italia
Castle
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Airport
Plaza
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Less Expensive
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Positioning Map
High Luxury
Regency
Grand
PALACE
Sheraton
Financial
District
Italia
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Atlantic
Airport
Plaza
Moderate
Luxury
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Inner
Suburbs
Alexander IV
Castle
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Shangri-La
Shopping District
& Convention Center
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Positioning Map
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Heritage
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Marriott
Continental
Grand
Action?
Regency
High
Service
Future
Situation
Expensive
Mandarin
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Shangri-La
PALACE
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No action?
Moderate
Service
Atlantic
Sheraton
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Alexander IV
Italia
Castle
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Airport
Plaza
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Less Expensive
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Positioning Map
High Luxury
Mandarin
New Grand
PALACE
No action?
Shopping District
& Convention Center
Castle
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Shangri-La
Sheraton
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Marriott
Action?
Financial
District
Regency
Heritage
Grand
Continental
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Inner
Suburbs
Italia
Alexander IV
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Atlantic
Basic
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Airport
Plaza
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Target
Entire
Market
Strategic Advantage
Low cost
Uniqueness
Overall cost
Differentiation
leadership
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Market
Segment
Focus
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Competitive Service Strategies
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Competitive Service Strategies
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Differentiation
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Focus
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Buyer Group
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Service Offered
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Geographic Region
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Strategic Analysis
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Industry
- Number of competitors
- Customer volume
- Information asymmetry
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- Industry capacity
Threat of Substitutes
- Buyer propensity to substitute
- Buyer switching costs
- Product substitution for service
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Strategic Analysis
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SWOT Analysis
Strengths
What are your companys
advantages?
What do you do better than
anyone else?
What unique resources do you
have?
What do people in your market
see as your strengths?
Weaknesses
What could you improve?
What should you avoid?
What factors lose sales?
What are people in your market
likely to see as a weakness?
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Opportunities
What are your competitors
vulnerabilities?
What are the current market
trends?
Does technology offer new service
options?
Are there niches in the market your
organization can fill?
Threats
What obstacles do you face?
What are your competitors doing?
Is changing technology threatening
your position?
Do you have cash-flow problems?
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Ideally, a service
delivery system
should support the
operating strategy,
which should support
the service concept,
which supports the
target market
Target Market
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Market positioning
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Service Concept
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Operating Strategy
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Service Delivery System
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Internal capability
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Strategic Service Vision
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Strategic Service Vision
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Service Concepts
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Operating Strategy
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Strategic Service Vision
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Strategic Service Vision Example:
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Southwest Airlines
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Service Concept
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Operating Strategy
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Competitive Environment
of Services
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Exit Barriers
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Availability
Convenience
Dependability
Personalization
Price
Quality
Reputation
Safety
Speed
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Strategic Roles of
Information in Services
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Strategic Focus
External
(Customer)
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Off-line
(Analysis)
Revenue generation:
Yield management
Point of sale
Expert systems
Productivity enhancement:
Inventory status
Data envelopment analysis
(DEA)
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Internal
(Operations)
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Discussion
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Reading
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