SERVICE OPERATIONS
GLOBALISATION
GROWTH STRATEGIES
SINGLE SERVICE
SINGLE LOCATION
MULTILOCATION
MULTISERVICE
Focused service
Clustered service
* Dental Practice
* Retail store
* Family restaurant
* University
* Apolo clinic
* Insurance
Focused network
Diversified network
* Federal express
* McDonald's
* Hotel chains
* Banks
FRANCHISING
• Expand using own resources
• Franchising is an alternative
• Independent owner operators bound by a
contractual agreement
• Initial investment varies
• Market or region is specified
• Franchiser dictates operating policies
- Purchase source/quality
- No deviation from product
- Franchise fee
BENEFITS : FRANCHISEE
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Management training
Brand name
National advertising
Acquisition of proven business
Economies of scale
GLOBAL DEMAND
• Service from centralized location
• Open service centers in new locations
OPERATIONAL ISSUES
• Government regulations
• Bureaucratic red tape to protect local
operators
• Tight centralized control
• Working hours
- 8 hrs with minimum break
- 12 hours with long mid day break
OPERATIONAL ISSUES
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Language
Culture
Operating standards
Local firms to handle marketing &
deliveries
GENERIC STRATEGIES
GLOBAL
STRATEGY
TRANSNATIONAL
STRATEGY
NO INERNATIONAL
STRATEGY
MULTIDOMESTIC
STRATEGY
HIGH
LOW
LOW
HIGH
GLOBAL STRATEGIES
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World is one large market
Homogenous approach
Integrated across countries
Strong brand name /special identity
Example : Citibank allows customers to do
banking anyway, anywhere & anytime
MULTIDOMESTIC
• Operation in each country is autonomous
serving the needs of the local country
• Staffed /manned by local nationals
• Confederation
TRANSNATIONAL
• Service is homogenous : Fast food chains
offering local menus
• R&D (Specialized expertise) centralized
• Centralized procurement
BORDERLESS WORLD
• Customer :Availability of information
• Competitors :
- Nothing stays proprietary for long
- First mover
- Timely delivery
- Operating with partners (not alone)
BORDERLESS WORLD
• Company : Reduce unit fixed cost
• Airlines & communications
• Huge investments in equipments &
facilities
• Focus shifting from variable cost to fixed
cost
• Search for a larger market
BORDERLESS WORLD
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Currencies
Fluctuating exchange rates
Hedging & options
Forced in to global expansion to become
currency neutral
BORDERLESS WORLD
• Country
• Economic downturn in one country offset
by operations in other countries
• Compete in competitors country
• Global localization
• Understand the unique service needs
• Local units to be able to modify to meet
the local needs
TRANSNATIONAL OPERATIONS
• Cultural transferability :
• Global standardization vs local
customization (Banking – Islamic
countries)
• Language barrier
• Behavioral customs ( non smoking
zones in Restaurants)
TRANSNATIONAL OPERATIONS
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Worker Norms :
Power Distance Index : equality
Individualism : Focus on individual achievement
Masculinity :
Uncertainty Avoidance index : Tolerance
Long Term Orientation : Long term commitment
& respect for tradition ( strong work ethic &
reward in long term). Change takes time
TRANSNATIONAL OPERATIONS
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Host Government policies
Repatriation of profits
Entry barrier for certain operations (insurance)
Delays in licensing agreements
Foreign airlines landing rights
Preferential treatment to local shippers
Nations may perceive threat (economic &
cultural).
• Labor intensive services welcome : creates more
job opportunities
GLOBAL SERVICE STRATEGIES
• Efficient delivery system
• High quality product
• Flexible cost structure
GLOBAL SERVICE STRATEGIES
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Multi country expansion
Importing customers
Following your customers
Service offshoring
Beating the clock
GLOBAL SERVICE STRATEGIES
Multi country expansion
• Customer travels physically to the service
facility
• Franchisee route
• Clone the service rapidly in multiple
locations
• Customer contact & front office requires
sensitivity to local culture
• Recruit & train locals
• Cultural adaptation a major issue
GLOBAL SERVICE STRATEGIES
Importing customers
• Multi service single-site strategy
• Customer to travel long distance or
substitute travel with communication tools
• Example : Universities
Medical centers
Places of tourist attraction
GLOBAL SERVICE STRATEGIES
Following your customers
• Follow corporate clients & provide service
in other countries
• Attracting local business may need
modification in the service package
• Examples : Travel agents
Consultants
Auditors
Hotel chains
GLOBAL SERVICE STRATEGIES
Service offshoring
• Global service strategy
• Back office operations to cheaper
locations
• BPO
• Examples : Customer service, Financial
analysis, software development
GLOBAL SERVICE STRATEGIES
Beating the clock
• Bypass the constraint of domestic time
zones, working hour regulations
• Combining the demand from multiple time
zones can improve productivity of
Reservation clerks
• Example : Telemarketing