What Are Business Services?
Business services are a wide range of activities that help businesses function. These include computing, telecommunications, management and professional services. Many types of business services are specialized and based on contracts.
The main difference between a product and a service is that the latter is intangible and cannot be reproduced. It is not possible to create the same service twice, or to store it for future use.
A service-oriented business can be characterized by three primary characteristics: its emphasis on meeting a single market segment’s needs, its dependence on an internal organizational structure that provides a limited number of functions, and its focus on satisfying customer preferences.
Purity of the business and a clear picture of the service are important aspects in building strategic management plans for service-oriented businesses. A pure service business can provide a concrete product–such as the written report of a management consultant–that does not require the presence of a customer.
The ability to deliver the desired quality of service depends on a variety of factors, including an organization’s size and capacity, its resources, and its capabilities. This is a challenge for smaller firms that may not have the necessary resources to perform a complete range of tasks in-house.
Cost and convenience are also significant considerations for service-oriented firms. For example, a company that provides animal control or pest control must ensure that the service is affordable and convenient.
Typically, consumers are more willing to pay for a service when they believe it is essential to their quality of life. However, during periods of recession, people tend to cut back on spending and are more likely to look for ways to save money when paying for services.
These trends can lead to a decrease in demand for some services, such as landscaping or pet grooming. This can create a potential market for other businesses, such as carpet cleaners or house painters.
In addition, the availability of new communication technologies and infrastructures has led to an increased reliance on outsourcing by business services providers. These technologies enable companies to quickly and effectively respond to rapidly changing business needs.
Customers and employees are increasingly relying on services to solve problems, maintain equipment or keep their facilities functioning properly. For example, a tech support person can assist with computer or network troubleshooting.
The need for businesses to rethink their service offerings is particularly acute because of the growing popularity of the Internet. This trend is expected to continue, as more and more businesses rely on online platforms for information, communication, and services.
It is imperative that service-oriented managers understand the implications of this shift in perspective. This will allow them to design and execute new strategies that will attract customers and retain existing ones.
Despite the challenges, service-oriented managers can make good use of many traditional techniques that they apply to other businesses. For example, they can improve the quality of their products and the efficiency of their operations.
A service-oriented business can offer a unique advantage over other businesses by focusing on an attractive group of customers. The service can satisfy those customers’ needs more efficiently and conveniently than its competitors’. This will create a customer base that can be sustained over the long term.