11

Service ManagementService Management

Ch. 1, Role of Services in an EconomyCh. 1, Role of Services in an Economy

22

Learning ObjectivesLearning Objectives

1. Central role of services in an economy.1. Central role of services in an economy.

2. Evolution of an economy from an agrarian 2. Evolution of an economy from an agrarian society to a service society. society to a service society.

3. Features of preindustrial, industrial, and 3. Features of preindustrial, industrial, and postindustrial societies.postindustrial societies.

4. Features of the new experience economy.4. Features of the new experience economy.

33

0. Service Definitions0. Service Definitions

A Service is a A Service is a Time-perishable, Time-perishable, IntangibleIntangible Experience Performed for a Experience Performed for a Customer Acting in the Role of a Customer Acting in the Role of a CoproducerCoproducer..

-James Fitzsimmons-James Fitzsimmons

44

0. Definition of Service Firms0. Definition of Service Firms

Service Enterprises are Organizations Service Enterprises are Organizations that that FacilitateFacilitate the Production and the Production and Distribution of Goods, Distribution of Goods,

Support OtherSupport Other Firms in Meeting Firms in Meeting Their Goals, and Their Goals, and

Add ValueAdd Value to Our Personal Lives. to Our Personal Lives. - James Fitzsimmons- James Fitzsimmons

55

1. Interactive Role of Services1. Interactive Role of Services

66

1. Integration of Downstream Services1. Integration of Downstream Services

example: automobile manufacturersexample: automobile manufacturers

Discussion: outsourcing, offshoreDiscussion: outsourcing, offshore

77

2. Economic Evolution2. Economic Evolution

Clark-Fisher hypothesisClark-Fisher hypothesis

Three vs. Five stagesThree vs. Five stages

Three categoriesThree categories

2. Trends in U.S. Employment by Sector2. Trends in U.S. Employment by Sector

0

10

20

30

40

50

60

70

80

9018

50

1860

1870

1880

1890

1900

1910

1920

1930

1940

1950

1960

1970

1980

1990

2000

Year

Pro

po

rtat

ion

of

tota

l em

plo

yem

ent

Service

Manufacturing

Agriculture

99

2. Percent Employment in Services2. Percent Employment in ServicesTop Ten Postindustrial NationsTop Ten Postindustrial Nations

CountryCountry 19651965 19751975 19851985 19951995 20052005

United StatesUnited States 59.559.5 66.466.4 70.070.0 74.174.1 78.678.6

United KingdomUnited Kingdom 51.351.3 58.358.3 64.164.1 71.471.4 77.077.0

The NetherlandsThe Netherlands 52.552.5 60.960.9 68.368.3 73.473.4 76.576.5

SwedenSweden 46.546.5 57.757.7 66.166.1 71.571.5 76.376.3

CanadaCanada 57.857.8 65.865.8 70.670.6 74.874.8 76.076.0

AustraliaAustralia 54.654.6 61.561.5 68.468.4 73.173.1 75.875.8

FranceFrance 43.943.9 51.951.9 61.461.4 70.070.0 74.874.8

JapanJapan 44.844.8 52.052.0 57.057.0 61.461.4 68.668.6

GermanyGermany 41.841.8 n/an/a 51.651.6 60.860.8 68.568.5

ItalyItaly 36.536.5 44.044.0 55.355.3 62.262.2 65.565.5

1010

2. Percent Service Employment for 2. Percent Service Employment for Selected Industrialized NationsSelected Industrialized Nations

Country 1980 1987 1993Country 1980 1987 1993 20002000

United States 67.1 71.0 74.3United States 67.1 71.0 74.3 74.274.2

Canada Canada 67.2 70.8 74.8 67.2 70.8 74.8 74.174.1

Japan 54.5 58.8 59.9Japan 54.5 58.8 59.9 72.7 72.7

France 56.9 63.6 66.4France 56.9 63.6 66.4 70.870.8

Israel 63.3 66.0 68.0Israel 63.3 66.0 68.0 73.973.9

Italy 48.7 57.7 60.2Italy 48.7 57.7 60.2 62.862.8

ChinaChina 13.1 17.8 21.2 13.1 17.8 21.2 40.6 40.6

Taiwan 38 42 48 55

1111

2. 2. 服務業在先進國家扮演火車頭服務業在先進國家扮演火車頭

1212

3. Stages of Economic Development 3. Stages of Economic Development by Daniel Bellby Daniel Bell

Dominant Human Unit of Living Dominant Human Unit of Living

Society Game activity labor social life measure Society Game activity labor social life measure

Pre- Against Agriculture Raw Extended Sub- Pre- Against Agriculture Raw Extended Sub-

Industrial nature Mining muscle household sistence Industrial nature Mining muscle household sistence

Industrial Against Goods Machine Individual Industrial Against Goods Machine Individual Quantity Quantity

fabricated production fabricated production

naturenature

Post- Among Services Artistic Community Quality Post- Among Services Artistic Community Quality of of

industrial persons life industrial persons life

1313

4. Experience Design Principles4. Experience Design Principles

Theme the Experience (Forum shops)Theme the Experience (Forum shops)

Harmonize Impressions with Positive CuesHarmonize Impressions with Positive Cues(O(O’’Hare airport parking garage)Hare airport parking garage)

Eliminate Negative CuesEliminate Negative Cues(Cinemark talking trash containers)(Cinemark talking trash containers)

Mix in Memorabilia (Hard Rock T-shirts)Mix in Memorabilia (Hard Rock T-shirts)

Engage all Five Senses (Mist in Engage all Five Senses (Mist in Rainforest)Rainforest)

4. Source of Service Sector Growth4. Source of Service Sector Growth

Information TechnologyInformation Technology (e.g. Internet) (e.g. Internet)InnovationInnovation Push Push theory (e.g. Post-it)theory (e.g. Post-it) PullPull theory (e.g. Cash Management) theory (e.g. Cash Management) Difficulty of testing service prototypesDifficulty of testing service prototypesChanging Changing DemographicsDemographics Aging of the population Aging of the population Two-income families Two-income families Growth in number of single people Growth in number of single people Home as sanctuary Home as sanctuary

Discussion TopicsDiscussion TopicsIllustrate how the type of work he or she does Illustrate how the type of work he or she does influences a person’s lifestyle. E.g. contrast a influences a person’s lifestyle. E.g. contrast a farmer, a factory worker, and a school teacher.farmer, a factory worker, and a school teacher.Is it possible for an economy to be based Is it possible for an economy to be based entirely on services?entirely on services?What is the value of What is the value of self-serviceself-service in an in an economy?economy?

1616

Interactive Class ExerciseInteractive Class Exercise

1.1. Identifies service firms that should be listed Identifies service firms that should be listed in the Fortune 100 and places them in rank in the Fortune 100 and places them in rank order of annual revenue. order of annual revenue. www.fortune.com

case: WAL-MART (p.14)case: WAL-MART (p.14)

2. 2. 搜尋台灣的企業排名，服務業次分類的排搜尋台灣的企業排名，服務業次分類的排名。名。

Distribution of GDP in the US EconomyDistribution of GDP in the US Economy

1717