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CHAPTER 10

CHAPTER 10. SERVICE STRATEGY. SERVICE STRATEGY. Characteristics of Services Capacity Management Concentrated Service Niches Major Services. CHARACTERISTICS OF SERVICES. Produced and consumed at the same time More variability in quality control Intangible No inventory with services.

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CHAPTER 10

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  1. CHAPTER 10 SERVICE STRATEGY

  2. SERVICE STRATEGY • Characteristics of Services • Capacity Management • Concentrated Service Niches • Major Services

  3. CHARACTERISTICS OF SERVICES • Produced and consumed at the same time • More variability in quality control • Intangible • No inventory with services

  4. CAPACITY MANAGEMENT Matching supply and demand for services Examples • Hotel weekend specials • Travel in Europe in low season • Ski resorts in March

  5. INCOME TAX Preparation by CPA’S April 10 $500 Feb 10 $400

  6. CONCENTRATED SERVICE NICHES • USAA Military Market • Lending Tree Online lending • Hotels Last minute reservations

  7. HYATT PRICING Monday-Thursday $200 Friday-Sunday $100

  8. LENDING TREE State Law – Cannot take out equity except by a Texas lending company

  9. MAJOR SERVICES • Professional Services • Health Services • Financial Services • Educational Services

  10. PROFESSIONAL SERVICES • Lawyers • CPAs • Real Estate

  11. SIMPLE LEGAL SERVICES • Simple wills • Simple tax filing • Uncontested divorces

  12. MAJOR CPA SERVICES • Auditing • Taxes • Consulting

  13. MAJOR ACCOUNTING FIRMS Big Four 2009Big Eight 1989 Price Waterhouse Price Waterhouse Coopers Coopers & Lybrand Deloitte Touche Deloitte Haskins & Sells Tohmatsu Touche & Ross Ernst & Young Arthur Young Ernst & Whinney KPMG Peat Marwick & Mitchell Arthur Anderson

  14. PROFESSIONAL SERVICES CHANGES • Lawyers Price Fixing • CPA’s Soliciting Competitors’ Business & Advertising

  15. HEALTH SERVICES • Doctors and nurses • Hospitals and clinics • Medical insurance

  16. DOCTORS AND NURSES • General Doctors • Specialist Doctors • Role of Nurses

  17. % OF U.S. MEDICAL SCHOOL DOCTORS AS GENERAL PRACTIONERS 1970 40% 2013 15%

  18. HOSPITALS AND CLINICS • Large hospitals • Emergency centers • Minor health clinics

  19. USE OF HOSPICE CARE 2000 22% 2009 42%

  20. MEDICAL INSURANCE • Medicare • Medicaid • Insurance providers

  21. HOSPITAL PRICING CityHospital ProcedureHospital Cost #1#2 Dallas Lower Joint Replacement $162k $43k New Jersey Respiratory Ailment $100k $7k Alabama Pneumonia $150k $14k

  22. FINANCIAL SERVICES • Banking • Insurance • Stock Brokers

  23. DISCOUNT STOCK BROKERS • Fidelity • Vanguard • Schwab

  24. EDUCATION SERVICES • High Schools • Community Colleges • Universities

  25. HIGH SCHOOL CHOICES • Public schools • Private schools • Charter schools • Home schooling

  26. COMMUNITY COLLEGES IN HOUSTON AREA • Houston Community College • San Jacinto College • Lone Star College

  27. UNIVERSITIES • State Public Universities • State Private Universities

  28. DIFFICULTY OF CHANGE IN EDUCATION Reforming and changing a curriculum is about as difficult as moving a cemetery

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