Business Services

Business services

Business services are a category of activities that benefit companies without supplying physical products. These services include advertising, marketing, consulting, logistics (including travel and facilities), waste handling, staffing, shipping, administration and security services.

Unlike product businesses, where a specific product is produced and sold to a specific consumer, service companies rely on their services to deliver value to customers. These companies are a significant part of the European economy and contribute to an estimated 11% of EU GDP.

The key to the success of a business service is to design a system that delivers value to customers, and then manage that system in such a way that it is profitable and sustains itself over time. In my Harvard Business School course on service management, I teach students to think about the differences between a product company and a service business and how these affect managerial practice.

Designing a Successful Servicebusiness

The most important step in the process of designing a service business is to identify a target market that has a compelling need and desire for the type of service you are offering. This may involve looking at how the product you sell fits into existing categories or identifying the characteristics that will make your offering stand out from competitors’ offerings.

Another key consideration is how the customer can influence the cost and quality of the service you provide. For example, a client who explains the purpose of a new facility well can be a valuable asset in the process of designing the project and can help you to create a more efficient design.