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This week 3 discussion board talks about the following OBJECTIVES & TOPICS:

3.1: Services is something provided to people in different sectors of any industry utilized to support the econmy of the American society. 3.1 Process is a way of life for all individuals compartmentalized into society to ease the burden and grant relief for the suffering, the terminally ill, the rich who pay too many taxes, the hard working who rarely relax, and the poor whom are 145% below the United States federal poverty levels deserving of assistance to meet basic needs, and equal rights to enjoy the privileges granted to most within those compartments serving various levels of challenges for different groups of populations. This structure was built and is an application system applied to every aspect of the American social structure to organize the People, and to satisfy the People while sustaining a balanced lawful environment to the best of our abilities (Walker, 2017) /(UOP, 2019)/(Sakhi, R. L., 01/2019). Managing anything requires endurance, training, education, skills, and love of People in order to practice serving those who follow you. In leadership positions many people have the right and share the privilege of experiencing leadership opportunities such as parenting skills, fast food chain supervision of employee teams, law firm & certified professional accountants, wives and head of households including supervisors of pets. When keeping focus on this week's topics and competencies we have the opportunity to combine these definitions to remind ourselves how the process of service management is created, sustained, improved, and adapts accordingly to any environment artificial or natural in habitat.

According to Fitzsimmons (2013) "Our welfare and the welfare of our economy now are based on services" (Fitzsimmons, Fitzsimmons, & Bordoloi, 2013). The American services culture is based on food services, communication, and emergency with an emphasis on manufacturing and agriculture in food or goods (F,F,B, 2013).

" Service Operations Management is established firmly as a field of study that embraces all service industries" (F, F, & B, 2013).

Understanding Services

1 The Service Economy

Our textbook is authored by three accomplished people:
Mona Fitzsimmons: Journalism of Michigan/Healthcare & Wildlife/Red Cross Volunteer/Geology Graduate/University leveled teaching
James Fitzsimmons: PhD UCLA/Research of ER Ambulatory Location/BSE Engineering University of Texas @ Austin/University leveled professorship
Sanjeev Bordoloi: Graduate PhD University of Texas @ Austin/Research interests in theory constraints, lean management, process analysis and design/Engineering & Business/Minnesota/Operations Management research/teaching with renowned excellency

All three authors of our textbook share some things in common such as:

Society, Process, Environmental Awareness, and Teaching
Service operations is defined as a discipline by the DSI (Design Services Institute) in Boston, MA since 1987
Management aspects of service operations engages in the embracing of all industries providing services in an economy (Pp. vii).

Source: Fitzsimmons, Fitzsimmons, and Bordoloi (2013).

2 Service Strategy

Competitive Service Strategies²

There are three generic competitive strategies: overall cost leadership, differentiation, and focus. Each strategy will be described in turn, with examples of how service firms use them to outperform their competition.

Overall Cost Leadership

An overall cost leadership strategy requires efficient-scale facilities, tight cost and overhead control, and often innovative technology as well. Having a low-cost position provides a defense against competition, because less efficient competitors will suffer first from competitive pressures. Implementing a low-cost strategy usually requires high capital investment in state-of-the-art equipment, aggressive pricing, and start-up losses to build market share. A cost leadership strategy sometimes can revolutionize an industry, as illustrated by the success of McDonald's, Walmart, and Federal Express. Moreover, service firms have been able to achieve low-cost leadership using a variety of approaches.

Seeking Out Low-Cost Customers

Some customers cost less to serve than others, and they can be targeted by the service provider. For example, United Services Automobile Association (USAA) occupies a preeminent position among automobile insurers because it serves only military personnel and their families. This group also entails lower cost because its members, who are relatively nomadic, are accustomed to and willing to do business by telephone, mail, or online. Consequently, USAA is able to eliminate any need for the extensive sales force employed by traditional insurers. Another example of this strategy is provided by low-cost retailers such as Sam's Wholesale Club and Costco, which target customers who are willing to buy in quantity, do without frills, and serve themselves.

Standardizing a Custom Service

Typically, income tax preparation is considered to be a customized service. H&R Block, however, has been successful in serving customers nationwide when only routine tax preparation is required. Also, storefront legal services and family health care centers are attractive means of delivering routine professional services at low cost. The key word here is routine. However, product substitution is always a danger (e.g., Turbo Tax).

Reducing the Personal Element in Service Delivery

The potentially high-risk strategy of reducing the personal element in service delivery can be accepted by customers if increased convenience results. For example, convenient access to ATMs has weaned customers from personal interaction with live tellers and, consequently, has reduced transaction costs for banks.

Reducing Network Costs

Unusual start-up costs are encountered by service firms that require a network to knit together providers and customers. Electric utilities, which have substantial fixed costs in transmission lines, provide the most obvious example. Federal Express conceived a unique approach to reducing network costs by using a hub-and-spoke network. By locating a hub in Memphis with state-of-the-art sorting technology, the overnight air-package carrier was able to serve the United States with no direct routes between the cities that it served. Each time a new city is added to the network, Federal Express only needs to add one more route to and from the hub instead of adding routes between all the cities served. Page 34The efficiency of the hub-and-spoke network strategy has not been lost on passenger airline operators, either.

Taking Service Operations Offline

Many services, such as haircutting and passenger transportation, are inherently "online," because they can only be performed with the customer present. For services in which the customer need not be present, the service transaction can be "decoupled," with some content performed "offline." For example, a shoe repair service could locate dispersed kiosks for customer drop-off/pick-up, thus consolidating orders for delivery to an off-site repair factory, which even could be located offshore. Performing services offline represents significant cost savings because of economies of scale from consolidation, low-cost facility location (e.g., American Airlines has one of its 800-number reservations centers located in the Caribbean), and absence of the customer in the system. In short, the decoupled service operation is run like a factory.

Differentiation

The essence of the differentiation strategy lies in creating a service that is perceived as being unique. Approaches to differentiation can take many forms: brand image (e.g., McDonald's golden arches), technology (e.g., Sprint's fiber-optic network), features (e.g., American Express's complete travel services), customer service (e.g., Nordstrom's reputation among department stores), dealer network (e.g., Century 21's nationwide real estate presence), and other dimensions. A differentiation strategy does not ignore costs, but its primary thrust lies in creating customer loyalty. As illustrated here, differentiation to enhance the service often is achieved at some cost that the targeted customer is willing to pay.

Making the Intangible Tangible

By their very nature, services often are intangible and leave the customer with no physical reminder of the purchase. Recognizing the need to remind customers of their stay, many hotels now provide complimentary toiletry items with the hotel name prominently affixed. The Hartford Steam Boiler Inspection and Insurance Company (now part of Munich Re) writes insurance on industrial power plants, but this company has enhanced its service to include regular inspections and recommendations to managers for avoiding potential problems.

Customizing the Standard Product

Providing a customized touch may endear a firm to its customers at very little cost. A hotel operator who is able to address a guest by name can make an impression that translates into repeat business. Hair salons have added many personalizing features (e.g., personal stylist, juice bar, relaxed surroundings, mood music) to differentiate themselves from barbershops. Burger King's efforts to promote a made-to-order policy is an attempt to differentiate itself from McDonald's classic make-to-stock approach to fast-food service.

Reducing Perceived Risk

Lack of information about the purchase of a service creates a sense of risk-taking for many customers. Lacking knowledge or self-confidence about services such as auto repair, customers will seek out providers who take the extra time to explain the work to be done, present a clean and organized facility, and guarantee their work (e.g., Village Volvo). Customers often see the "peace of mind" that is engendered when this trusting relationship develops as being worth the extra expense.

Giving Attention to Personnel Training

Investment in personnel development and training that results in enhanced service quality is a competitive advantage that is difficult to replicate. Firms that lead their industries are known among competitors for the quality of their training programs. In some cases, Page 35these firms have established collegelike training centers (e.g., McDonald's Hamburger University in Oak Brook, Illinois, near Chicago).

Controlling Quality

Delivering a consistent level of service quality at multiple sites with a labor-intensive system is a significant challenge. Firms have approached this problem in a variety of ways, including personnel training, explicit procedures, technology, limits on the scope of the service, direct supervision, and peer pressure, among others. For example, to ensure consistency, the Magic Pan chain of restaurants designed a foolproof machine to produce its famous crêpes. The question of service quality is further complicated by the potential gap between customer expectations and experiences. Influencing customer quality expectations thus becomes an issue, which is explored in Chapter 6, Service Quality.

Focus

The focus strategy is built around the idea of servicing a particular target market very well by addressing customers' specific needs. The market segment could be a particular buyer group (e.g., USAA and the military community), service (e.g., Shouldice Hospital and patients with inguinal hernias, Motel 6 and budget travelers, Federal Express and people who need guaranteed overnight package delivery), or geographic region (e.g., community college or neighborhood restaurant). The focus strategy rests on the premise that the firm can serve its narrow target market more effectively and/or efficiently than other firms trying to serve a broad market. As a result, the firm achieves competitive advantage in its market segment by meeting specific customer needs and/or by lower costs through specialization. Thus, the focus strategy is the application of differentiation and/or overall cost leadership to a particular market segment rather than the entire market.

Davidow and Uttal argue how important customer selection is to achieving a successful focus strategy.³ They relate how one bank in Palo Alto, California, targets wealthy individuals and discourages others by policies such as closing an account after two checks have bounced. Davidow and Uttal's three-step approach to focus includes segmenting the market to design core services, classifying customers according to the value they place on service, and setting expectations slightly below perceived performance.

Strategic Analysis

Strategic analysis begins with a stated objective, such as "should we enter an industry with a new service offering?" Two popular planning tools include (1) Porter's five forces analysis of the target industry structure and (2) SWOT analysis to assess the organization's strengths, weaknesses, opportunities, and threats in a market.

Porter's Five Forces Analysis⁴

The five forces model is used at the industry level (e.g., airlines) to determine the competitive intensity and, therefore, attractiveness of a market. The five forces affect the ability of a firm to attract customers and make a profit. Figure 2.1 shows a model of the five forces with example issues to consider in each case.

Consider Netflix as an example firm entering the video rental industry. Our discussion begins with the center block (Competitive Rivalry within Industry) upon which the external forces act.

Competitive Rivalry within Industry. Often this factor is the major determinant of industry competitiveness. Rivals might be aggressive price competitors or they might use nonprice strategies such as innovation, branding, or superior quality. Industry capacity relative to total customer demand is an important indicator of whether a new entrant will find customers. An exception was Southwest Airlines, which entered the Texas market offering low-cost fares and frequent departures that tapped a latent demand of business commuters who usually traveled by car. When Netflix entered the Page 36market offering DVDs exclusively by mail, its only rivals were rental stores such as Blockbuster.

FIGURE 2.1 Porter's Five Forces Model

3.2: Examine measures of cost control (measuring devices utilized to measure the success of cost control budgeting):

3.3 Evaluate methods of service training:

"Supporting Facility and Process Flows" (Pp. 115) I have reviewed the objectives from our text and the following is the result:

PART TWO Source: Pp. xi (Fitzsimmons, Fitzsimmons, & Bordoloi, 2013).

Designing the Service Enterprise

3 New Service Development

4 The Service Encounter

5 Supporting Facility and Process Flows

6 Service Quality

7 Process Improvement

Supplement: Data Envelopment Analysis (DEA)

8 Service Facility Location

Chapter 5

Chapter 4 Case Studies and Discussion Topics Itinerary

Source: Judith Martin, "Complaint-Handling Requires a Deft 'Switcheroo,'" Associated Press as printed in Austin American Statesman, November 1, 1992, p. E14.

TABLE 4.5 Satisfaction Duality (Pp. 105)

FIGURE 4.4 Relationship between Customer and Employee Perceptions of Customer Service

Source: Service Management: Operations, Strategy, Information Technology, Ch. 5 (Pp. 115), Fitzsimmons, Fitzsimmon, & Bordoloi (2013).

TABLE 4.4 Examples of Unethical Behaviors in Customer-Contact Settings

Source: Adapted from Charles H. Schwepker, Jr. and Michael D. Hartline, "Managing the Ethical Climate of Customer-Contact Service Employees," Journal of Service Research 7, no. 4 (May 2005), p. 378.

FIGURE 4.1 Role of Technology in the Service Encounter

Source: With permission from Craig M. Froehle and Aleda V. Roth, "New Measurement Scales for Evaluating Perceptions of the Technology-Mediated Customer Service Experience," Journal of Operations Management 22, no. 1 (February 2004), p. 3.

TABLE 4.1 Evolution of Self-Service

Source: Reprinted with permission from James A. Fitzsimmons, "Is the Future of Services Self-service?" Managing Service Quality 13, no. 6 (2003), p. 444.

Source: https://phoenix.vitalsource.com/books/1260090507/epubcfi/6/34[;vnd.vst.idref=body017]!/4/2/2[page115]@0:0

REFERENCES

Fitzsimmons, James A.

Service management : operations, strategy, information technology / James A. Fitzsimmons, Mona J.

Fitzsimmons, Sanjeev Bordoloi.--8th ed.

p. cm.--(The McGraw-Hill/Irwin series operations and decision sciences)

ISBN 978-0-07-802407-8 (alk. paper)--ISBN 0-07-802407-2 1. Service industries--Management.

I. Fitzsimmons, Mona J. II. Bordoloi, Sanjeev. III. Fitzsimmons, Mona J. IV. Bordoloi, Sanjeev. V. Title.

HD9980.5.F549 2014

658--dc23 www.mhhe.com

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Tuesday, January 29, 2019

American Services Culture: Learning Objectives for Week 3: Ch. 5 (SMO: SIT) (Pp. 115) The thread has no unread message.Thread expanded. created by BHFSC & CCAPA WorkGroup (you)

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