Session 1

Question 1

Outsourcing -

Answer 1

refers to contracting of services that were previously conducted internally in a firm to an external service provider. Seen as being more cost effective to source from a second or third party.

Question 2

Offshoring -

Answer 2

refers to services that are conducted in one country and consumed in another (call centers in India).

Question 3

Services -

Answer 3

benefits without ownership; rental of goods:

Question 4

Services may be considered a rental of:

Answer 4

1. Labour, skills and expertise (e.g. hiring an expert to navigate the ship)
2. Goods Services (e.g. temporary right to use the ship)
3. Defined space and facility (e.g. to have a room)
4. Access to shared facilities (e.g. swimming pool, restaurants, bars, spa, fitness center)
5. Access and use of networks and systems (e.g. banking, animations)

Question 5

4 broad categories of services:

Answer 5

1. People Processing (healthcare, hairstylist)
2. Possession Processing (dry cleaning, repair and maintenance)
3. Mental Stimulus Processing (education, ad/pr)
4. Information Processing (accounting, legal services)

Question 6

Service characteristics: IHIP

Answer 6

1. Intangibility
2. Heterogeneity (variability of quality, character and content = diversity)
3. Inseparability of production and consumption
4. Perishability of output (services cannot be stored, saved, used, returned or resold once they have been used).