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Creating Growth With Services
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By Mohanbir Sawhney, Sridhar Balasubramanian and Vish V. Krishnan
Winter 2004
Reprint 4528
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Volume 45, Number 2, pages 34-43, 10 pages
Primary Topic: Corporate Strategy
Secondary Topic: Service and Quality
SummaryFaced with saturation of their core product markets, companies in search of growth are increasingly turning to services. A few companies have enjoyed success with this approach; others have not been so fortunate. The authors explain how managers can improve the odds of success by taking a systematic approach to creating services-led growth. Companies must begin by redefining their markets in terms of customer activities and customer outcomes instead of products and services. Customers seek particular outcomes, and they engage in activities to achieve them. These activities can be mapped along a customer-activity chain, which is the foundation for exploring services-led growth opportunities. Analogous to product-centric growth strategies such as product-line extension, product-line filling and brand extensions, customer-activity chains can be extended, filled, expanded or reconfigured with new services. The authors have developed a framework -- the service-opportunity matrix -- to help managers structure the investigation of new opportunities. For each quadrant of the matrix, they provide a set of questions to help companies determine whether a particular approach would work for them. In addition, they have devised another matrix, on risk mitigation, to help managers assess the pitfalls and risks that these opportunities represent. |
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