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Introduction
Strategic management, in our opinion, is a set of forms, methods, approaches, and elements, through which the concept and strategic plan for the development of the enterprise is formed, as well as the strategy for its effective functioning is determined. It seems appropriate to choose a strategy that performs the functions of creating and realizing competitive advantages as the central element of the strategic management system. Acting as a set of coordinated measures, it ultimately leads to the receipt of economic rents. Strategic planning performs the functions of creating stability and sustainability of the service enterprise in relation to the external environment. The formation and use of a strategic management system for service activities allows improving the management system of service enterprises as a whole and transforming it into an open system, including on the basis of planning. Today, in the context of the dynamism and uncertainty of the external environment, it acquires special significance.
Literature Review
The introduction of a strategic management system for service activities requires the implementation of an organizational and economic mechanism. The main methodological principle that is put in the basis of the organizational and economic mechanism of the system is the principle of the leading link. The mission and goals of the system serve as such link. The organizational and economic mechanism of the strategic management system includes resource and organizational blocks that allow covering the entire management cycle. The direct managerial impact on strategic positions is provided by the control unit, which includes the control body and the functional structure performing the control functions (Benyoussef-Zghidi & Zaiem, 2017). In this case, there are changes only in the service influences. The information block of the strategic management system consists of a database on the technological subsystem of the enterprise, innovations, and investments, contains an assessment of the internal environment and the external environment.
Strategic planning in the system of strategic management proposed by Christensen (2016) acts as a subsystem within which the concept and strategic plan are formed. The concept presupposes the concretization of conceptual provisions for the development of service activities, which reflects the system of expectations based on a critical analysis of the existing potential and on the forecast of its improvement. After drawing up the concept, a strategic plan is created for the long term, including target figures and strategic directions for the development of service activities in the business services market. In the strategic management system, the relationship between strategy and strategic plan is carried out through goal-setting, and in the management system – through the implementation of planning and coordination functions.
The main element of the strategic management system of service activities is the strategy; its formation is a multifaceted process, affecting a large number of economic ties in the internal and external environment of the service enterprise. It seems that the strategy acts as a process of developing and implementing effective strategic decisions: the strategy appears as a vector management solution to the complex task of achieving profitability by a service enterprise, as an economic phenomenon, reflecting the strategic direction of a complex of management methods and forms of enterprise actions in the market (Majava & Isoherranen, 2019). Taking into account management specifics, the strategy of service activities in the maintenance market is a complex of functional strategies, exceptional competencies, personnel, and organizational routines. Accordingly, when planning, it is necessary to choose a basis – a service philosophy.
The literature notes that the philosophy of equipment (assets) maintenance (service level) is determined by the requirements that apply to the total time of availability (use) of equipment. The amount of required service and, accordingly, the cost of service is determined by the service philosophy adopted by the company. These five philosophies are listed below (Schilling, 2016; Smith, 2018):
- Reactive service. In too many cases, the equipment works until it breaks down; with this approach, there is no prevention, and technical personnel respond and carry out work only in cases where the equipment is faulty or malfunctioning. This approach is the most expensive way to organize maintenance. Equipment service levels tend to be below acceptable levels and product quality tends to suffer. However, this philosophy is applicable in cases where the cost of replacing failed equipment is significantly lower than the cost of repair, and the costs associated with replacing a failed element are low compared to the cost of maintenance and repair.
- Corrective action. Maintenance corrective actions are based on the results of external inspections, planned operational requests, and routine maintenance requirements. These activities require scheduled equipment shutdowns and should be planned in advance. This approach is the most cost-effective way to perform maintenance, reducing productivity losses by 2 to 4 times compared to a reactive maintenance model.
- Preventive maintenance. Prevention includes routine inspections and adjustments, and many potential problems can be anticipated before they happen. This level of service is applicable for a wide range of operations for servicing equipment, software systems in order to eliminate possible viruses and vulnerabilities, etc.
- Diagnostic service. Predictive maintenance helps prevent failures that can be predicted by analyzing the condition of the equipment. The analysis is usually carried out by examining trends in a parameter such as vibration, temperature, and deformation. Preventive maintenance focuses on manual operations, while diagnostic maintenance uses some form of technology (instrumental diagnostics). Predictive maintenance allows equipment repairs to be organized without interfering with production schedules, thereby eliminating one of the most significant factors in the cost of downtime. With diagnostic maintenance, a higher level of equipment maintenance is achieved. Development (continuation) of diagnostic maintenance is maintenance based on technical condition, which is carried out on the basis of its regular and constant monitoring. Any deviation from the standard rate outside the tolerances will trigger an alarm (or in some cases the generation of a repair order) that will be generated automatically. This real-time trend tracking enables maintenance to be performed in the most cost-effective manner.
- Prevention (providing better performance, reducing the need for maintenance). Maintenance activities of this type focus on changes in the design (construction) of equipment components that will reduce the need for maintenance. This type of service uses data accumulated from previous methods to change equipment design specifications. An analogy with a car can be used here: if to compare the maintenance requirements of a vintage 1970s car with the maintenance requirements of modern cars, one can clearly see a decrease in maintenance requirements. Adjustment is one of the main areas of service; 1970s cars required maintenance every 30,000 to 40,000 miles. Modern models require it after 100,000 miles, without compromising ride quality (Smith, 2018). These improvements were implemented as a result of the study of operational and maintenance practices and reengineering.
The challenge is to select an appropriate service philosophy as the basis for further planning both strategically and at all other levels. This philosophy will ensure the synergy of all components of the service system. However, the question is which of the types of this philosophy is optimal for clients in this or that case, in accordance with their type of activity and its characteristics.
Discussion
For effective functioning, the strategic planning system of a service enterprise operating in tech services market should be of a post-industrial nature and take into account features of maintenance services. First of all, the goal-setting system should reflect the orientation towards the production of a service or intellectual product. Efficiency needs to be viewed in terms of increasing customer satisfaction, not increasing sales. In this regard, the creation of use value should be based on a high degree of integration of the material product and its accompanying services, as well as on the creation of an intellectual product that can be brought to the stage of a client’s intangible asset. The main element of a service company operating in the technical services market is its personnel. The quality, speed, and exclusivity of the business service produced, which mainly has the nature of an intellectual product, depend on the competence.
In the process of strategic planning and in making strategic management decisions, it is necessary to use the modern paradigm of personnel management, especially in the field of creating adaptive self-learning teams. Possessing these characteristics and a post-industrial character, the strategic management system of a service company will answer the most important questions of the theory of strategic management about creating competitive advantages, consumer value, and obtaining economic rents.
The activities that take place within the service organization are not of interest to customers. Clients are interested only in those processes where they are directly involved. Therefore, it seems appropriate to involve clients in the value co-creation process already at the early stages of planning. B2B markets differ from the consumer market mainly in the characteristics of the consumer: a professional consumer who has studied the market of suppliers pursues specific goals and declares this, is more inclined to interact with suppliers in the framework of value creation. He is ready to share ideas, often enters into an open dialogue, since he is not even interested in customizing the supplier’s proposal, but rather in developing a product that is ideal for further use within the value chain. In B2B markets, value is comprised of both the technical, economic, and social benefits that the buying company receives in exchange for the amount it pays instead of the supplier (Majava, Harkonen, & Haapasalo, 2015). Unfortunately, the issues of value co-creation in the field of tech service, without reference to the sales of the assets themselves requiring service, are practically not developed. This emerging area of research needs extensive empirical research to determine the service needs of corporate clients and to find ways to implement effective planning in service companies.
Recommendations
In modern conditions, service companies are forced to look for new ways to improve their competitiveness and achieve leading positions in the market. One of these ways is to develop long-term relationships with key partners, primarily with consumers. At the same time, companies strive not only to develop long-term relationships, but also to involve consumers in the process of co-creating value. This requires companies to align goals, plans, and business processes, and establish and maintain sustainable relationships (Pellicer & Valero, 2018). In the process of implementing the planning function, it is important for the service company to determine the meaning of the relationships that arise during co-creation of value, and secondly, to analyze how the consumer decides whether he will participate in co-creation of value.
A common policy in which a service acts as a part or addition to a marketing strategy and is aimed at promoting sales, and, accordingly, all elements of the service are centered around the sale, should be replaced with a proactive planning policy. More complex goals involve the formation of a special brand service that emphasizes the uniqueness of a product or brand, as well as a focus on increasing customer satisfaction, his involvement, up to the formation of the product itself and/or the servicing process. The performance of tech service organizations needs to be examined from the point of view of meeting all customer expectations, not from the point of view of increasing sales of services. In this regard, the formation of the use value of a service should be carried out taking into account the high level of integration of the impact of a business service on a material product, as well as the development of a new intellectual product that will be used as an intangible asset by the client.
References
Benyoussef-Zghidi, A., & Zaiem, I. (2017). Service orientation as a strategic marketing tool: The moderating effect of business sector. Competitiveness Review: An International Business Journal, 27(1), 40-61.
Christensen, C. (2016). The innovator’s dilemma: When new technologies cause great firms to fail. Brighton, MA: Harvard Business Review Press.
Dombrowski, U., & Malorny, C. (2017). Service planning as support process for a lean after sales service. Procedia CIRP, 64, 324-329.
Majava, J., Harkonen, J., & Haapasalo, H. (2015). The relations between stakeholders and product development drivers: Practitioners’ perspectives. International Journal of Innovation and Learning, 17(1), 59-78.
Majava, J., & Isoherranen, V. (2019). Business model evolution of customer care services. Journal of Industrial Engineering and Management, 12(1), 1-10.
Pellicer, P.C., & Valero, F.A. (2018). Identification of reverse logistics decision types from mathematical models. Journal of Industrial Engineering and Management, 11(2), 239-249.
Schilling, M. (2016). Strategic management of technological innovation. New York, NY: McGraw-Hill Education
Smith, D. (2018). Exceptional technologies: A continental philosophy of technology. London, UK: Bloomsbury Academic.
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