Powerful Forces Which Affect Service Economy

Powerful Forces are Affect Service Economy

There are basically 5 major factor which affect service economy

1st one Government Policy:

• Changing regulations: government change it's policy, putting restriction on new entry or minimize the use of certain product. 
•  Privatization: it's effect economy of the country and service industry also
• New rules to protect customer employees, and the environment: Suppose government found that some bad contain in pizza making, and they make restriction to make, buy or sell pizza. It's big effect on food service chain. In India, there is restriction to do advertisement on favor of smoking so ad agency lost their biggest client of all company who making cigarette.
• New Agreement on trade in Service

2nd one Social Changes:

• Rising consumer exception: service is basically performance, every consumer demand good service then others. their exception increase. 

• More affluence: standard of living is increase, that's lead to more better performance
• more people short of time: now a days consumer need fast process. For example, fast delivery, fast performance of service 
• increased desire for buying experiences vs. things
• rising consumer ownership of computers, cell phones, and high tech equipment: This lead to update or change the service process
• Easier access to more information: develop website, connect with internet, 24X7 customer service
• growing but aging population

3rd one Business Trends

•  Push to increase shareholder value: company always looking to investor/shareholder value
• Emphasis on productivity and cost savings
• Manufactures add value thorough service and sell services 
• More strategic alliances and outsourcing
• Focus on quality and customer satisfaction
• Growth of franchising
• Marketing emphasis by nonprofits

4th one Advances in IT (Information Technology)

• Growth of internet
• Compact mobile equipment
• wireless networking
• Faster, more powerful software
• Digitization of text, graphics, audio, and video

5th one Globalization 

• More companies operating on transnational basis
• Increased international travel
• International mergers and alliances
• Offshoring of customer service 
• Foreign competitors invade domestic markets

(Source: Service Marketing by Lovelock)