SERVICE OPERATIONS

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SERVICE OPERATIONS

• GLOBALISATION

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GROWTH STRATEGIES
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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

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BENEFITS FRANCHISEE

• Management training
• Brand name
• National advertising
• Acquisition of proven business
• Economies of scale

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GLOBAL DEMAND

• Service from centralized location
• Open service centers in new locations

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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

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OPERATIONAL ISSUES

• Language
• Culture
• Operating standards
• Local firms to handle marketing deliveries

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GENERIC STRATEGIES
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GLOBAL STRATEGIES

• 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

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MULTIDOMESTIC

• Operation in each country is autonomous serving
  the needs of the local country
• Staffed /manned by local nationals
• Confederation

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TRANSNATIONAL

• Service is homogenous Fast food chains offering
  local menus
• RD (Specialized expertise) centralized
• Centralized procurement

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BORDERLESS WORLD

• Customer Availability of information
• Competitors
• - Nothing stays proprietary for long
• - First mover
• - Timely delivery
• - Operating with partners (not alone)

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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

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BORDERLESS WORLD

• Currencies
• Fluctuating exchange rates
• Hedging options
• Forced in to global expansion to become currency
  neutral

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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

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TRANSNATIONAL OPERATIONS

• Cultural transferability
• Global standardization vs local customization
  (Banking Islamic countries)
• Language barrier
• Behavioral customs ( non smoking zones in
  Restaurants)

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TRANSNATIONAL OPERATIONS

• 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

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TRANSNATIONAL OPERATIONS

• 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

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GLOBAL SERVICE STRATEGIES

• Efficient delivery system
• High quality product
• Flexible cost structure

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GLOBAL SERVICE STRATEGIES

• Multi country expansion
• Importing customers
• Following your customers
• Service offshoring
• Beating the clock

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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

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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

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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

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GLOBAL SERVICE STRATEGIES Service offshoring

• Global service strategy
• Back office operations to cheaper locations
• BPO
• Examples Customer service, Financial analysis,
  software development

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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