Strategic Planning Process for the Service Economy

By Erica Olsen

Strategic Planning Process for the Service Economy

In most developed countries, some two-thirds of the GNP is made up of services. However, strategic planning and concept development are still focused on solving problems for the manufacturing industry. The only new service industry in which strategy concept makers have shown any interest is financial services, especially banking. Big banks are an integrated part of the world of big global manufacturing industries.

Is it because of this poor state of knowledge that almost the only service company that has had any impact on general strategy formulation is the fast food chain McDonalds? The success of McDonalds is based on a simple and effective strategic formula: standardization of service into a package of the smallest detail, strict quality control and cost-effective production by young, cheap, unskilled workers supervised by managers on the shop-floor.

Karl-Erik believes that “McDonaldization” strategy is far too simple a way of looking at the dynamic and fast changing world outside the manufacturing industries -people-intensive and people-dependent. Karl-Erik suggests that in order to develop truly original strategy concepts for the non-manufacturing companies one should try to turn the traditional logic of manufacturing “upside down”. Instead of basing our conceptual thinking on 100 year-old doctrines based on the notion of the one-product factory, Karl-Erik suggest that we should look away from the manufacturing industry, very far away.




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