Whether they realize it or not, every business is involved in service operations. Unlike manufacturing and product sales, which fall under the category of goods business, services are intangible products that provide value to customers through the exchange of labor for money. The broad scope of business services includes consulting, advertising, logistics and transportation, waste management, staffing, security, and more. This article outlines an approach to crafting a profitable service business based on four critical elements.
While the idea of having one’s own business may sound appealing, it isn’t always easy to do. It requires two things: a good product to sell and customers willing to pay for it. In the case of a service business, however, these requirements are more flexible and easier to meet than those associated with manufacturing or retailing goods. That’s why there are so many small service businesses that are successful at what they do.
There are several different types of business services. These include business-to-business, business-to-consumer, and social. For example, a company that provides consulting services to other companies is classified as a business-to-business service, while a restaurant that caters to the needs of the business community would be considered a business-to-consumer service.
Another form of business service is the business-to-business service, which consists of transactions between companies that are related to their industry. For example, a car manufacturing company performs a business-to-business transaction with a wholesaler who supplies the tires and rubber hoses needed to build cars. These transactions are distinct from both the business-to-consumer and business-to-government services.
The last type of business service is the social service, which encompasses a wide range of activities that can benefit a community and improve its quality of life. This can include providing education, health care, and recreational facilities. It can also include charitable donations and support for nonprofit organizations.
While the concept of a business services model is relatively new, it’s quickly becoming an important area of study and practice for managers. A growing body of research is starting to understand the reasons behind successful service innovation, while recognizing that traditional best practices aren’t as applicable as once thought. As a result, a set of tools has emerged that allows sophisticated managers to create more profitable service organizations. To succeed, they must ensure that the core elements of service design are pulling together rather than tearing each other apart. This article outlines an approach to this challenge based on four critical service dimensions that are often overlooked: the ability of the organization to deliver, the capacity to connect with customers, the value of knowledge, and the capability to develop relationships. Getting all of these right is the key to building a great and profitable service business. The article is by Chris Coyne, an associate professor of service strategy at the University of Michigan. He also serves as the director of the Service Research Center at the university’s Institute for Strategic Innovation and Leadership. He is the author of “Service Innovation” (Harvard Business School Press, 2011). He has also written extensively on the topic of organizational change and leadership.
