Services Industries Are Important In Building Economic Growth

Introduction Services Industries are Important in Building Economic Growth. In the business world, money, tangible products, and services are the main aspects. The services sector is easier to modify since it is capital and skill intensive field. Several economic experts have outlined the reason for services development.Advertising We will write a custom essay sample on Services Industries Are Important In Building Economic Growth specifically for you for only $16.05 $11/page Learn More Services Development by Augusta Et Al According to Auguste et al, many companies that primarily deal with tangible products are finding it necessary to engage in the services sector in order to make profit for capital. In addition, the services sector helps protect some products from commoditisation. Commoditisation refers to the alienation of a company’s products from the original manufacturer or producer. If a manufacturer produces goods for use by other companie s to offer certain services, the quality of the products will be attributed to the company rendering the services. Consequently, the services company can stifle the manufacturer’s products by limiting purchases from the manufacturer or altogether shifting their supplies to another manufacturer. Consequently, manufacturers are engaging in the services sector to protect commoditisation of their products. This enables them to compete favourably with other manufacturers of similar products. Moreover, the company can directly identify with the product and the services it offers (Rust Huang 2012, p.50). Services development by Nissan et al Nissana et al argues that companies are increasingly engaging in the service industry to get a grip on the behaviour of the consumer. The extent of use of some services determines the demand for the manufactured product associated with it. The author sets an example of mobile phones (Nissana et al 2011, p.8). The extents to which mobile services are available to the consumer affect the demand for mobile phone handsets from the manufacturer. In this essence, the control of the popularity of a service enables the manufacturing company to exert control on its products. In addition, Nissan et al considers that to modify tangible products, capital for financing research and innovation is necessary. The services sector has a high capability of accumulating capital. This is especially true for the financial services sector, which involves movement of capital. If a company is involved in the financial services sector such that investors are attracted to its services, then the interested parties will deposit money in form of investments such as securities.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The manufacturing company or any other company dealing with tangible products can use the money for research and innovation to modify the existing products to meet customer demands. The invested capital is paid back by the sales of the now competitive product in the market. Ettlie Rosenthal’s perspective on eservices development Another reason for businesses that were traditionally engaged in products market to engage in provision of services associated with the products is the need to adapt to changes in the market. Ettlie Rosenthal postulates that a customer is always engaged in provision of a service, and the reaction of the customer to the service affects the quality. In production, a manufacturer designs a product depending on independent studies of the market and speculations of market trend (Ettlie Rosenthal 2011, p.285). The nature of the final product is fixed, and often, modification to fit the specific preferences of the customer is not possible. The producer can study the reaction of the customer and determine the appropriate modification for the product to suit the precise customer preference. Mor eover, the producer is able to evaluate the market, and specifically the customer, and design appropriate products for the future trend (Ettlie Rosenthal 2011, p.287). Design of Services to Attracted and New Customers Today, businesses modify their provision of services to suit the demands of the customers. In the process of modification, technology plays a major role. With technology, a system for provision of services is modified such that the methodology used is favourable to the customer, or less effort is used to provide the service. In this age, automation of service rendering increasingly plays a major role. Technology enables production of single service products, which many customers buy and utilise at the same time without modification or replication to suit every customer’s specification. This way, the cost of offering the services is reduced, and more profitability is realised (McManus 2009, p.4). Companies are also seeking cheap labour to facilitate the provisio n of affordable services to the customer. Consequently, the customer gets to buy cheaper products from the company. Companies with high dependency on technology in order to provide services are employing skilled people from developing countries because they are comfortable with low wages.Advertising We will write a custom essay sample on Services Industries Are Important In Building Economic Growth specifically for you for only $16.05 $11/page Learn More Companies that embrace this ideology before their competitors are able to outdo them in terms of sales and overall profit margin. Additionally, companies in countries like china have forced countries in the western countries to adopt this methodology in order to remain competitive. Businesses are investing more in acquisition of skill to ensure that their customers get services of high and consistent quality. This is realised through investment in education and training. Skill plays a cardinal role ensu ring that the services offered are of high quality. Particular need for skill is in the management of the companies (McManus 2009, p.2). Another realisation by the service industry is that their customers value convenience and flexibility of services. In the light of this knowledge, companies offering the services employ the latest and the most efficient technology for the convenience of the customer. The applied technology is also able to change its manner of providing services to suit the needs of the customers. This trend is most evident in the banking services. Competitors have employed technology to increase convenience without worrying about security (Riedl 2010, p.15). Banking systems that update their technology to the latest standards to meet the demand of their customers outdo their rivals in the business since customers prefer convenience and flexibility in the banking sector. Organisations are also pushing for reforms in the regulatory barriers that make provision of ser vices slow and costly. The regulations affect services such as entertainment, distribution of services, time of operation of companies that offer certain services such as sales promotion, and licensing of companies to allow them provide certain services (BG et al 2006, p.5). Barclays bank is paradigm of international banking services provider that avails banking services to customers around the world. The company uses modern software to offer deposit services and money transfer services. Microwave systems are employed to increase the speed at which interbank transactions and communications are executed. A modern form of computing is used by the bank to enable it to provide its services to its customers. The employment of personal digital assistants to execute bank transactions by customers has put the bank among some of the leading banks in the world. A customer can make payments, obtain statements and make interbank transactions on a mobile device. These services are used with the knowledge that a mobile digital device such as a mobile phone is always within reach of the customer.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The use of this technology to enhance convenience and flexibility for the customer encourages more transactions. Moreover, the services of the bank are being always utilised at a fee from a distance by the customer (Eaton 2012, p.6). Walmart is an international retailer owning businesses around the world. In addition, it is the biggest retail distributor in the world, and is the largest corporation in terms of revenue in the world. The company has its base in the United States of America (Wilbert 2012, p.7). Due to its complexity and size, Walmart has adopted technology to enable it to keep up with the versatility of smaller companies. The company is in the process of adopting radio frequency identification technology in its retail outlets and supply management. The technology allows the computer system to detect and identify a product from a longer distance than the existing technology. This advance in computer technology will help increase the efficiency of service to customers. M ore importantly, the supply system that facilitates stocking of its stores will be highly enhanced. Moreover, the technology will enable the company to make more profit and attract more customers due to the convenience that it brings (Kuepper 2010, p.4). Barclays bank and the Walmart use different methodologies to implement their technological advancement. Barclays bank will have to rely on another services company to facilitate its transactions. A mobile telephony service provider must support the services of the bank in order to realize the installation of the system. Although the system is functional in some parts of the world, the bank must seek agreement with other mobile telephone service providers to realise its ambition. On the other hand, Walmart uses a system tailored for its special purpose. Once the company purchases the software and hardware from the technologies company that deals with the radio frequency systems, the distributor will not be dependent on the technologi es manufacturer to run its services. Conclusion Both companies will be applying the latest developments in computer technologies in operations. Mobile banking is a relatively new field still under research, and it is in its first stages of implementation around the world. The radio frequency identification technology is a new invention with retail business as one of its applications. Walmart will be one of the first companies to adopt such a system for its retail outlets supply. Such development of services by companies helps to keep demand high and counter competition from other competitors. References BG, A., EP, H., V, P. (2006). ‘The right service strategies for product companies. McKinsey Quarterly, 1(1), 1-7. Eaton, K. (2012). Mobile Payments For Everyone! Barclays Pushes Future Tech Info Now. Most Innovative Companies, 1(February), 1-10. Ettlie, J., Rosenthal, S. (2011). Service versus Manufacturing Innovation. Product Innovation Management , 28(1), 285-289. Kuepper, J. (2010). Wal-Mart Opens Doors to Widespread RFID Adoption. Investor, 1(August), 1-6. McManus, J. (2009). The Service Economy. Management Services, 1(Summer), 1-6. Nissana, E., Galindob, M., Me ´ndez, M. (2011). The future of services in a globalized economy. The Service Industries Journal, 31(1), 59-78. Riedl, A. (2010). Location factors of FDI and the growing services economy. Economics of Transition, 18(4), 1-18. Rust, R., Huang, M. (2012). Optimizing Service Productivity. Journal of Marketing, 76(March), 46-66. Wilbert, c. (2012). How Wal-Mart Works. How Wal-Mart Works, 1(April), 1-9. This essay on Services Industries Are Important In Building Economic Growth was written and submitted by user Darien Y. to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.