A business service is any activity that does not deliver a tangible commodity or product, but serves to support an organization’s objectives. Such services include administrative and office functions, security, travel, information technology, and other business-related support activities.
The main difference between service and product businesses is that products are physical commodities, while services are intangible. Thus, a service-oriented business needs to build a brand name identification that distinguishes it from its competition and provides a barrier to entry.
Another key difference is that service businesses are typically less centralized than product-oriented enterprises. This means that the production and delivery of a service may be decentralized, limiting the development of economies of scale. Moreover, the service business’s customer base often consists of a large number of small and medium-sized companies. As a result, defining a standardized demand is usually difficult, which means that the pricing of services must be determined by the market.
To overcome this challenge, service-oriented businesses develop a “service model” that recognizes the differences between a product-oriented enterprise and a service-oriented business. This approach helps students understand how the characteristics of a service business differ from those of a product business, and it also allows managers to develop strategies to make these characteristics work together in a way that can boost profitability.
One important aspect of this model is the recognition that service-oriented businesses need to develop a reputation for quality, and they have to do so with as much care as product-oriented enterprises do. To this end, they need to hire people who are competent in fulfilling the needs of their customers and who can develop relationships with them that will serve to enhance repeat business or referrals.
They also need to develop processes for evaluating and improving the quality of the services they provide. This requires an understanding of customer feedback and other forms of customer input, as well as the ability to communicate with them in a manner that helps them feel heard and understood.
Finally, they need to establish a clear and predictable set of values that guide the management of their business. These values are the foundation of their operational plans, and they are a vital ingredient for long-term success.
In the same vein, service-oriented businesses also need to ensure that their employees are properly trained and equipped for the job they do. This training is typically provided by the company’s own internal staff, but it can be purchased from outside vendors as well.
Using a combination of specialized and general knowledge, service professionals are capable of identifying the needs of their customers and meeting them effectively. They must also be able to communicate with their customers in a way that conveys respect, integrity, and trust. They must be willing to put in the hard work needed to achieve these goals, and they must demonstrate an ability to handle pressure, meet deadlines, and deliver on time.