Business services are tasks and activities that support a business, even though they do not produce any tangible product. Examples of these services include information technology, procurement, finance, and shipping.
The term “service” is not synonymous with “good.” In a broader sense, the term also refers to processes that create benefits by facilitating a change in a customer or a change in their physical possessions. For example, a restaurant may provide food, but it also provides ambience, the setting and clearing of the table, and other services that make the experience pleasant and rewarding.
In practice, this distinction is very important because it determines what a service is and whether a company will be successful in developing a business model for its business. In addition, it helps determine the type of strategy that should be used to build a service-based company.
Service-oriented companies are more concerned with building a service system that delivers value to the customers and acts as a service provider. This is different from product-oriented businesses that are more concerned with developing and identifying a specific product that can be sold.
A business that has a service-oriented approach will focus on getting all four critical elements of the service model into place: skills, experiences, customer needs, and the ability to deliver. This requires a different set of management practices, but it can help a company develop and grow successfully. In particular, it can help a business succeed in the competitive environment.