Diversification strategies for the service sector

Abstract

An analysis of the American economy shows that the service sector overshadows the manufacturing sector, both in size and in state of tunnoil. The tunnoil is due to Ute rapid expansion of franchise chains, computerization, evolving professional standards, and competitive pressures. From the consumer's perspective, as client sensitivity intensifies and professional malpractice suits become more threatening, the issue of understanding and examining services becomes more important. In line with Wind's (1982) observation, service decisions in a finn are not limited to individual services. A finn should take into account its service line (a number of related services), service mix (combination of service lines), and service portfolio (assortments of service mixes). The lines of demarcation among these tenns are not always clear because they depend on organizational position as well as personal preferences in defining classification systems. At the most basic level, an institution offers only a singular service. Extensions of offerings within a restricted and related group of service categories constitute a service line, an exanlple of which is the tax consulting services market where an accountant may file a tax form on behalf of a client either by mail or through computer services linked up with the IRS office.