Service Industry
As a person with knowledge of the service industry, the author has always brought up to his superiors the viability of strategy formation regarding the analysis of this topic and at times fails to understand the reasons or logic behind certain strategic implementations imposed on it.
By delving into this project paper, the author intends to have better insights into how quality in the service industry is thought up, formulated and then imparted down into the subsidiaries of the service industry. The author hopes to have an in-depth understanding as to how the perfection of quality in the service industry enables companies and organizations to compete effectively and profitably in this era of internationalization where competition is extremely intense.
In order to reinforce the learning objectives, two key focal issues were focused upon, i.e. innovation and diversity. Innovation was discussed with regard to quality within the service industry where it was renowned for its development and manufacturing capabilities to constantly innovate. Diversity came under strategic thinking and formation as the author considered the diverse culture, political climate, economic surroundings, social environment, technological settings, government policies and legal systems in order to better understand the issues being discussed.
EXECUTIVE BRIEF
This essay utilized the service industry as the model to review its present conceptualization of quality and how it dealt with critical situations. From the analysis, key trends in the service industry were then identified, how it worked and its effectiveness in dealing with critical situations was ascertained. The paper then moved on to assess the service industry with regard to its suitability to critical situations, during which the internal capabilities of the service industry in relation to the strategy being followed by most businesses was determined also. An overall analysis of the performance and effectiveness of the service industry was also conducted to assess and compare the capabilities of the industry with those of others. Gaps in the service industry and environment were then identified.
Finally, several choices of strategies to improve the service industry as effective means in critical situations were recommended and evaluated in terms of appropriateness to the issues reviewed, feasibility in carrying out the options and acceptability within the key stakeholders and decision makers. Several key implementation issues related to managing strategic change were also addressed as well.
INTRODUCTION
The service industry is often characterized as an industry where the efficient and effective implementation of the policies and tasks necessary to satisfy a firm's customers, employees, and management are often best exemplified. The service industry focuses on the careful management of the processes involved in the production and distribution of products and services (1998).
More often than not, small companies and businesses within the service industry don't really have the capabilities to implement strict and efficient procedures to ensure quality. Instead, these companies and businesses engage in activities that various schools of business management typically associate with quality procedures. These activities include the manufacturing of safe products, product development, production and distribution.
However, quality within the service industry deals with all operations done within companies and organizations. Activities such as the management of purchases, the control of inventories, logistics and evaluations are often related with quality. A great deal of emphasis lies on the efficiency and effectiveness of processes. Therefore, quality within the service industry includes the analysis and management of internal processes.
ANALYSIS
Why is it becoming more difficult to create and maintain a differential advantage in many service businesses?
In the last five years, the service industry has seen so much activity in terms of massive changes in the landscape of service companies and businesses. These changes range from mergers and acquisitions to changing consumer tastes and finally, to different branding strategies. These activities are expected to continue over the course of the next ten years. This is perhaps the major reason why it has become more difficult to create and maintain a differential advantage in many service businesses (1994).
The second reason is that some service businesses nowadays also often neglect production planning as a necessary function in order to create a differential advantage. In manufacturing companies this process is often very easy to neglect because of the fast rate of change and the occurrences of unplanned events. Without production planning, service businesses fail to use several critical methodologies depending on the rate of demand of the customer and the price of the product. Therefore, the objectives of the service businesses for every transaction, which are efficiency and effectiveness, are not achieved.
Without production planning, the activities and resources of service businesses are not coordinated over time. This ultimately results in the failure to achieve the business goals leading to maximum resource utilization. Without production planning, service businesses are not able to monitor the progress of their plans at regular intervals and maintain their control over operations. Production planning within the service should involve four elements: scheduling, labor planning, equipment planning, and cost planning (1999).
- Scheduling involves the specification of the beginning, the length or the duration, and end of the planned activities.
- Labor planning involves allocating the necessary personnel and delegation of responsibilities and resources
- Equipment planning involves identifying the types and needs in terms of equipments.
- Cost planning involves determining the costs and the possibility of their occurrence.
The last reason is the fact that some service businesses fail to value the importance of supply chain analysis. Supply Chain analysis in the service industry involves working across multiple enterprises in an effort to limit the supply chain time of delivering products and services to the consumers.
The uncertainty of demands in supply chains within the service industry is easily solved through the implementation of faster response times. This is something that service businesses fail to realize. If implemented properly, the product supply chains of service businesses will have the luxury of longer lead times in terms of batch production of products and services in order to meet the demands. Most supply chains of service businesses are already moving in a position to support faster changes of demand by the consumers ( 2001).
If the supply chains of service businesses are agile, they will be able to enjoy so many advantages. As mentioned above, the supply chain analysis tends to shorten the supply chain itself. Also, this will significantly reduce company inventories. Forecasting, scheduling and planning, on the other hand, will significantly improve.
In your opinion, how can quality be used to provide a differential advantage for a service?
In lieu of the present developments in the service industry, there have been significant visions of learning concerning quality that evolved. A majority of these learning visions are based on the idea that the pursuit of quality involves a social process where knowledge is denied instead of being acquired passively. Quality, then, transforms into an interactive process. The interaction is being verified through the help of the participants in the process of achieving quality services such as the business management and the public consumers. In this framework, high quality of service would mean the continued guidance and support of the active learning process of the public. Obviously, this would call for an intensive and phased guiding strategy (1989).
When in the active pursuit of high quality services, the interaction of the business management with the public consumers form an integral part towards its success. Collaborative learning as a method is gradually being used by most service businesses nowadays. Through this approach, the public consumers can learn from the service businesses through the imitation of their techniques in the socialization processes. In the process, the public consumers are able to obtain the chance to see their own ideas regarding high quality services in a different aspect and therefore be able to take alternatives into consideration. The relative effectiveness of this approach is determined with the capability of the public consumers to continuously challenge their pre-acquired knowledge by trying to adapt to the interpretations of the service businesses.
Aside from the public consumers and the service businesses, the different resources of quality belong to a third category of factors in the pursuit of quality. Moreover, methods of obtaining quality services have shown signs of significant growth over the past years. Consequently, obtaining knowledge regarding quality service becomes more complicated. This is because the transformation of all this information into knowledge requires the public consumers to possess the appropriate reference frameworks. But service businesses can certainly help the public consumers transform information into valuable knowledge.
Quality can be transformed into a differential advantage for a service when combined with effective strategies. The first is building a strong local operating platform of quality services, and then testing it over time to determine if profitable growth would be possible through the selection of the right services and creation of the structures for distribution to supply a local national market. The second is broadening the portfolio of quality services. By broadening the portfolio of quality services, service businesses will be able to meet the consumer’s needs and minimize the costs of local infrastructures.
The third strategy involves a balanced portfolio of quality services among established and developing markets. In this instance, the established markets will provide the funds to invest in developing markets that have lower GDPs but possess a tremendous potential for growth and development. The last strategy involves market consolidation which would help in the securing of positions and the creation of shareholder values. Service businesses should strive to be in the top position on each market
The occurrence of quality research within the service industry reflects the growing difficulty in the management of service organizations that require the effective use of valuable resources such as money, materials, equipments, and people. This is the reason why quality research analysis is being done by service businesses in order to determine the most effective ways to coordinate these resources through the application of analytical methods derived from fields of studies such as mathematics, science, and engineering (1997).
Through this process, quality-related problems are solved in different ways and alternative solutions are then relayed to the service business management. The management then selects the appropriate course of action in line with the business goals. More often than not, quality research analysis is concerned with complicated issues such as top-level strategy, resource allocation, designing of production facilities and systems, pricing and the analysis of large databases.
Quality research analysis actually may vary according to the structures and philosophy of the service company. But most cases, it centralizes quality research analysis in one department. Quality research analysis may also have the possibility of working closely with top level managers in order to identify and solve a variety of problems.
No matter what the type or structure of the service company is, quality research analysis operates under similar sets of methodologies in order to carry out the analysis to support the service company’s goal to improve its overall performance. The process is started by the description of the symptoms of a service problem, followed by the formal definition of the problem. For example, a quality research analyst might be questioned regarding the most effective inventory level for every needed part on a production line. Also, the analyst might be asked to determine the optimal number of services needed.
CONCLUSION
The results of the analysis carried out on the service industry indicated very significant effects, even amidst the threats of unrest. Therefore, we could conclude that the service industry could still be expected to improve faster than average.
The review of the service industry’s capabilities and resources revealed very little inconsistencies regarding the strategies of most service businesses. This is coherent with their traditional inside-out approach. However, the need to reconcile both the inside-out and outside-in approaches becomes imperative now for the service businesses.
The analysis among the service industry as well as its quality management and capabilities revealed certain gaps, most of which are biased towards the service industry. However, these gaps paved the way towards determining a number of recommended strategic options to secure the competitiveness of the service industry.
Also, the service businesses have to find a balance between adherence to internal forces within the management and to the changing forces of the environment in order to implement such strategic options.
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