Introduction
Service industries have been dominating the existing economy for a relatively long period and they continue to gain popularity among entrepreneurs. There are different types of service industries, each with unique management characteristics.
Since these industries offer different services to consumers, they may be classified in respect to the level in which they relate to customers, their mode of delivery of the services, their market structure in terms of demand and supply as well as their ratio between machine usages versus human labor. In this case, service industries may be classified into four types, namely: Service factories, Professional service industries, Mass service industries and Service shops.
This study shall take into consideration an accountancy firm as a service industry. An accountancy firm is a service shop because it is a relatively small business that is independent and specializes in that field of accountancy. The accountancy firm also carries out work that is varied and hence tailored to fit the needs of customers. In this case, the focus will be in looking at its core competencies and the importance of these competencies as well as what the firm needs in order to achieve these competencies.
Accountancy firm’s Core Competency
A core competency is the company’s ability to know how to provide a service while fully utilizing the available resources (Moore, 112). The accountancy firm should aim at using the core competency to learn what its clients need so that it is able to retain the good will and expand its target market.
The firm should come up with advanced ways of book keeping. It should use computerized accounting techniques since they are faster and can be traced with ease. Computerized accounting techniques also enable the firm to stay well updated as the market economy advances.
The firm’s phase (Utter back’s model)
The accountancy firm is in its transitional phase where it is aiming to incorporate more technology in its operations. The firm aims at increasing its target markets and since its clients have been familiarized with the computerized system, the firm may now work towards coming up with new services related to accountancy and orient them to its clients. It will also take into consideration the following variables as it prepares itself for the next phase (Dundon, 17):
a) The innovation variable which takes into consideration the changes that are being implemented in the system.
b) The service variable that should aim at creating specialization and hence improving its quality.
c) The competitors in this stage will have increased but will be likely to reduce as the firm dominates its new designs.
d) The organization will have a more developed and formal system which has specialized job groups.
e) There will be threats in the firm mainly from its competitors.
f) The transitional process for the accountancy firm will likely result in rigid tasks that bring about changes in diverse stages.
The innovation process
The innovation process for the service firms is different from that of the product firms. This is because products involve more of architectural designs that will be aimed at producing more and better products into the market while for service industries the innovation process has to do with intangible designs that will create efficiency in providing up to date and customer-friendly services (Dundon, 36).
Conclusion
In conclusion it can be noted that a service shop will be creating a core competency through introducing advanced operating techniques and ensuring that its clients are well familiarized with these techniques. Since the firm does not need a large number of employees, it can make use of the few employees and apply greater use of machines while exposing the employees to the upcoming technologies (Heskette, 14).
Works Cited
Dundon, Elaine (2002). Seeds of Innovation – Cultivating the Synergy that Fosters New Ideas: New York; AMACM Publishers.
Heskett,James and Earl Sasser (1990). Service Breakthroughs: New York; Free Press Publishers.
Moore, Geoffrey. (2005). Dealing with Darwin: How Great Companies Innovate at Every Phase of their business (1st Edition). New York: Portfolio (Penguin).