The paper 'The Service Industry and Economic Growth" is a great example of macro and microeconomics coursework. In the traditional economy, the service industry was not regarded as an important aspect as other sectors of the economy such as the manufacturing industry. However, the new economy has been affected by the rapidly improving technology amongst other factors such as the booming of the service economy and the satisfaction of the product market which has led to the revolution of the service industry (McManus 2009, pp. 18). In the modern economy, services contribute immensely to economic growth and thus organizations need to improve the quality of their service rendering.
The service sector comprises industries such as health, finance, law, insurance, tourism, education, information communication technology, among others. I would like to describe what various authors and economists identify as the need for organizations to develop their service rendering and how organizations develop services to attract new and existing customers to buy their services. I would also like to select two organizations and describe how they build their service offerings. Finally, I would like to compare and contrast the approaches of the two organizations in the service building. There is a need for organizations to develop their service offerings because efficient service delivery is a sound marketing strategy because it improves the customers’ self-assurance and also enables the organization to gain a competitive edge over its rivals.
If an organization develops its service delivery, it will attract new customers thus resulting in higher profit margins. The customers also stand to benefit. Apart from the satisfaction derived from the quality service, customers are also cushioned against high prices because of the large customer base (Rayport et al 2005, pp.
80). According to Kaiser, there is a need for organizations to develop services offerings because it will create a job market for the unemployed. When organizations develop their services offering, new job opportunities will arise due to different reasons. The first reason is that new quality services attract new customers. This facilitates organizational growth which in return spurs the demand for more workers because the number of customers has increased. Secondly, when new services are introduced, new workers with the relevant skills are required to provide the services.
This creates employment opportunities for people with those required skills. In the modern business environment, the services sector employs more people than the manufacturing and construction industries in most developed countries such as the United States, United Kingdom, Germany, Russia, Australia, and even China. Thirdly, when financial institutions (which are a part of the services industry) develop and improve their services offering, this directly increases investments in the economy. With new investments come new organizations and new employment opportunities.
According to Kaiser, if organizations develop their services offering, they will have the capacity to employ more people and this will also result in improving the standards of living of the people and also improve the economy of the country (Kaiser 2002, pp 58). According to Tarcher & Russell, if organizations develop their service offerings, they are able to reduce some of their operational costs and high overhead costs. The increased use of technology in organizations leads to a reduction in costs. Automation, in particular, has enabled most companies to save on the high labor and production costs that are associated with full labor and manual system.
Automation also helps in smooth and fast business transactions (Tarcher & Russell 2006, pp. 254).
McManus, J 2009, The service economy. Management Services. Vol. 53, issue. 2, pp.16-20.
Rayport, J., Rayport, F. & Jaworski, J. 2005, Best Face Forward: Why Companies Must Improve Their Service Interfaces with Customers. Cambridge, MA: Harvard Business School
Press, pp 77-83
Kaiser, U. 2002, Innovation Employment and Firm Performance in the German Service Sector: Physica-Verlag publishers, pp.56-60
Tarcher, S. & Russell, C.L 2006, Two Thousand and One Ways to Save Your Company by Reducing Costs: Atlantic Publishing Company: pp. 250-255
Daigneau, R. 2011, Service Design Patterns: Fundamental Design Solutions: Addison Wesley Publishers’ pp. 300-305
Howells P. & Bain K. 2007, Financial Times. Prentice Hall publishers, pp. 195-200
Ackrill, M. & Leslie H. 2008, Barclays: The Business of Banking. Cambridge University Press publishers’ pp. 400-405