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ADDING VALUE THROUGH SERVICE:STRATEGIES FOR COMPETITIVE ADVANTAGEDr Christopher LovelockYale UniversityBeijingOverview Success factors in service-driven businesses Creating value for customers through service The Flower of Service: core and supplementary elements Customer loyalty creates value for the firm Some strategies to improve successWhy Effective Management of Services Will Become More Important for China More demand for services from domestic consumers as per capita income rises Tourism stimulates demand for many services Increased sophistication in manufacturing may involve emphasis on value-added services Entry of international service firms into Chinese market transfers expertise Government economic and social policies often emphasise improved services The Many Faces of ServiceService is the core product of the industry (e.g., insurance, transport, hotels, banking)Service supplements and adds value to a manufactured good manufacturer provides service to end users intermediary provides the service (e.g., retailer) Service to intermediaries -- help them to do a better job selling products to end usersService to suppliers -- builds relationships and makes purchaser an attractive customerInternal services -- within firm to other departments, branches, employees (e.g. legal, accounting, human resources)Ten Characteristics of Successful Service BusinessesClear statement of market position relative to competitors and target customersEasy to do business with for customers and suppliersFocus on building customer loyalty by creating valueOpen to innovation and new ways of workingSeek continuous improvements on quality and productivityTen Characteristics of Successful Service Businesses (cont)Make intelligent use of technologyInvest in recruitment, training, and motivation of employeesActively seek feedback from employees and customersExceptional at anticipating and resolving problemsTake a long term view2 Success factors in service-d
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