BMS
Business models and services
Summary + Article Correlation
CHAPTER 1: INTRODUCTION TO SERVICE OPERATION
Strategy= Setting goals and using available resources to achieve those goals
Vision> Objectives> Strategies> Strategic Plan
Service= Selling activity providing value for a customer
IHIP Service Characteristics
• Intangibility= cannot be tested before being bought/ they are not physical
items
• Heterogeneity = personalised services
• Inseparability= production and consumption are simultaneous; the ‘imme-
diacy’
• Perishability= cannot be stored
customer needs= price needs to match value
Operationalisation of service
operation (materials, equipment, facilities etc)> process (experience)> out-
comes (‘products’, benefits, emotions, judgements, intentions)
Input= people, process, technology
+ Operation strategy/ Transformation
+ Output = ‘product’
Service Design= Staff Experience and Operations + Customer Experience
Disintermediation theory= removing intermediary steps for cutting costs, cus-
tomer satisfaction, lower delivery times
for ex:
manufacturer> distributor> retailer> customer
producer> wholesaler> retailer> consumer
Business models
⁃ Advertising (Facebook)
⁃ Affiliate (Instagram)
⁃ Brokerage (Insurance companies)
⁃ Crowdsourcing (Fundraising)
⁃ Franchising (Mc Donalds)
⁃ Freemium (Amazon prime)
⁃ Low touch (“tech-touch” involves digital engagement, low level personal
contact with customers; eg: ATMs, petrol pumps, vending machines etc)
⁃ Brokerage and Marketplace
⁃ Pay as you go (Cars to go, OV Chipkaart)
,⁃ Subscription (Netflix)
Business Model Canvas= is used to create value for the customer, have an over-
view of the processes used in order to produce the output.
CHAPTER 2: THE WORLD OF SERVICE
Types of services (e-commerce framework)
⁃ B2B, B2G, B2C
⁃ G2B, G2G, G2C
⁃ C2B, C2G, C2C
The shift from product based economy to service based (bc of economic growth,
when economies become wealthier, they produce surplus wealth to buy services
with):
⁃ primary (agriculture, mining)
⁃ secondary (manufacturing)
⁃ tertiary (taxi driver, hairdresser, repetitive jobs)
⁃ quaternary (intellectual services; research, consultancy, design, media etc)
Key strategic challenges for service operation managers:
1. Managing tactically and strategically
2. Implementer and operations contributor to the strategy
3. Making the business case for service
4. Understanding the service concept
Influencing factors of service operation
-CSR
-Environmental responsibility
-Technology
-Globalisation
-Knowledge management
CHAPTER 4: THE SERVICE CONCEPT
The service concept= a shared and articulated understanding of the essential
nature of the service provided and received. It should provide a detailed explana-
tion of what is to be done for the customer and how this is to be achieved.
The structure of the Service concept: organisation, organising idea, service con-
cept (summary), services provided, services received (customer experience +
service outcomes)
, Organising idea= Service
provided: A subscription-
based streaming service
that allows members to
watch TV shows and
movies without commer-
cials on an internet-con-
nected device.
4 types of service pro-
cesses:
1. Capability (=high
process variety, low
volume per unit “cus-
tomers”)
2. Complexity (=high
process variety, high
volume per unit)
3. Simplicity (= low process variety, low volume per unit)
4. Commodity (=low process variety, high volume/unit)
CHAPTER 8 (P. 232-238): PEOPLE IN THE SERVICE OPERATION
Service delivery is a pressurised task because of
- pressure from managers (organisational pressures: performance objectives
and targets, nature of the task, service design, processes and resources etc)
- pressure from customers (customer expectations, intensity of contact, mood
and anxiety)
Possible outcomes of pressured service providers: poor service, increased costs,
low morale, psychological damage, poor service
Ways to manage service providers: leadership, teamwork, clarifying roles, suing
scripts, effective communication, staff discretion (=employee autonomy within
job description)
Outcomes of managing service providers: inspired, involved employees, respon-
sive, employee retention, effective delivery systems, overall business improve-
ment
CHAPTER 5: CUSTOMER RELATIONSHIPS
Customer= A ‘customer’ is the recipient and often also a provider (co-producer)
in a service process.
Categorisation based on purchasing behaviour
- Potential customer/ Prospect
- New/Fresh customer
- Impulsive/ Spontaneous customer
- Value-seeking/ Discount customer
Business models and services
Summary + Article Correlation
CHAPTER 1: INTRODUCTION TO SERVICE OPERATION
Strategy= Setting goals and using available resources to achieve those goals
Vision> Objectives> Strategies> Strategic Plan
Service= Selling activity providing value for a customer
IHIP Service Characteristics
• Intangibility= cannot be tested before being bought/ they are not physical
items
• Heterogeneity = personalised services
• Inseparability= production and consumption are simultaneous; the ‘imme-
diacy’
• Perishability= cannot be stored
customer needs= price needs to match value
Operationalisation of service
operation (materials, equipment, facilities etc)> process (experience)> out-
comes (‘products’, benefits, emotions, judgements, intentions)
Input= people, process, technology
+ Operation strategy/ Transformation
+ Output = ‘product’
Service Design= Staff Experience and Operations + Customer Experience
Disintermediation theory= removing intermediary steps for cutting costs, cus-
tomer satisfaction, lower delivery times
for ex:
manufacturer> distributor> retailer> customer
producer> wholesaler> retailer> consumer
Business models
⁃ Advertising (Facebook)
⁃ Affiliate (Instagram)
⁃ Brokerage (Insurance companies)
⁃ Crowdsourcing (Fundraising)
⁃ Franchising (Mc Donalds)
⁃ Freemium (Amazon prime)
⁃ Low touch (“tech-touch” involves digital engagement, low level personal
contact with customers; eg: ATMs, petrol pumps, vending machines etc)
⁃ Brokerage and Marketplace
⁃ Pay as you go (Cars to go, OV Chipkaart)
,⁃ Subscription (Netflix)
Business Model Canvas= is used to create value for the customer, have an over-
view of the processes used in order to produce the output.
CHAPTER 2: THE WORLD OF SERVICE
Types of services (e-commerce framework)
⁃ B2B, B2G, B2C
⁃ G2B, G2G, G2C
⁃ C2B, C2G, C2C
The shift from product based economy to service based (bc of economic growth,
when economies become wealthier, they produce surplus wealth to buy services
with):
⁃ primary (agriculture, mining)
⁃ secondary (manufacturing)
⁃ tertiary (taxi driver, hairdresser, repetitive jobs)
⁃ quaternary (intellectual services; research, consultancy, design, media etc)
Key strategic challenges for service operation managers:
1. Managing tactically and strategically
2. Implementer and operations contributor to the strategy
3. Making the business case for service
4. Understanding the service concept
Influencing factors of service operation
-CSR
-Environmental responsibility
-Technology
-Globalisation
-Knowledge management
CHAPTER 4: THE SERVICE CONCEPT
The service concept= a shared and articulated understanding of the essential
nature of the service provided and received. It should provide a detailed explana-
tion of what is to be done for the customer and how this is to be achieved.
The structure of the Service concept: organisation, organising idea, service con-
cept (summary), services provided, services received (customer experience +
service outcomes)
, Organising idea= Service
provided: A subscription-
based streaming service
that allows members to
watch TV shows and
movies without commer-
cials on an internet-con-
nected device.
4 types of service pro-
cesses:
1. Capability (=high
process variety, low
volume per unit “cus-
tomers”)
2. Complexity (=high
process variety, high
volume per unit)
3. Simplicity (= low process variety, low volume per unit)
4. Commodity (=low process variety, high volume/unit)
CHAPTER 8 (P. 232-238): PEOPLE IN THE SERVICE OPERATION
Service delivery is a pressurised task because of
- pressure from managers (organisational pressures: performance objectives
and targets, nature of the task, service design, processes and resources etc)
- pressure from customers (customer expectations, intensity of contact, mood
and anxiety)
Possible outcomes of pressured service providers: poor service, increased costs,
low morale, psychological damage, poor service
Ways to manage service providers: leadership, teamwork, clarifying roles, suing
scripts, effective communication, staff discretion (=employee autonomy within
job description)
Outcomes of managing service providers: inspired, involved employees, respon-
sive, employee retention, effective delivery systems, overall business improve-
ment
CHAPTER 5: CUSTOMER RELATIONSHIPS
Customer= A ‘customer’ is the recipient and often also a provider (co-producer)
in a service process.
Categorisation based on purchasing behaviour
- Potential customer/ Prospect
- New/Fresh customer
- Impulsive/ Spontaneous customer
- Value-seeking/ Discount customer
