SCM 352 – Chapter 10 Globalization of Services

25 vocabulary flashcards covering domestic growth models, franchising, strategic planning, globalization strategies, and cultural considerations from Chapter 10.

Focused Service

A single-location service start-up built around a clear, unique concept (e.g., FedEx’s original Memphis hub-and-spoke overnight delivery).

Focused Network

Growth strategy that adds multiple sites of the same service to stay close to customers while maintaining control, often via franchising (e.g., McDonald’s).

Clustered Service

Expansion strategy in which a large, fixed-facility service diversifies its offerings at one site (e.g., small colleges expanding into four-year universities).

Diversified Network

Growth through acquisition that mixes multi-site and multi-service operations; may be reversed if synergy is not achieved (e.g., United Airlines’ brief entry into hotels and car rentals).

Franchising

A contractual system in which a franchiser licenses a proven business concept, brand, and operating system to franchisees who supply capital and run individual units.

International Franchise Association (IFA) Definition

Franchising grants franchisees the right to sell a product/service and use the franchiser’s business system in exchange for fees and adherence to standards.

Franchisee

An owner-operator who buys the franchise, provides capital, manages daily operations, and trades some autonomy for brand affiliation and support.

Benefits to the Franchisee

Access to an established brand, national advertising, a proven business model, and economies of scale that lower the risk of failure.

Issues for the Franchisor

Challenges include regulating franchisee autonomy, crafting enforceable contracts, and resolving conflicts while protecting the brand.

Five Cs of Strategic Planning

Key globalization considerations: Customers, Competitors, Company, Currency, and Country.

Global Strategy

Treats the world as one homogeneous market, delivering a standardized service across countries (e.g., Ikea, Singapore Airlines, Citibank).

Multidomestic Strategy

Operates as a federation of locally managed units that tailor the service to each country’s needs (e.g., Booz Allen Hamilton’s overseas offices).

Transnational Strategy

Leverages corporate expertise globally while adapting service delivery to local markets (e.g., McDonald’s offering vegetarian items in India).

Multisite Expansion Strategy

Rapid cloning of a service in many locations—often via franchising and a “cookie-cutter” format—to reach customers who must visit the facility.

Multiservice Single-Site Strategy

Offers many services at one location, attracting customers willing to travel or using telecom substitutes (e.g., Mayo Clinic, Disney World).

Following Your Customers

Opening foreign offices primarily to continue serving existing corporate clients abroad, sometimes adapting services for local business.

Importing Customers

A multiservice strategy that draws customers to a unique destination instead of exporting the service (e.g., ski resorts at Mt. Crested Butte).

Exporting a Service

Entering foreign markets with little or no modification of the service, often selling a cultural experience (e.g., McDonald’s in Europe).

Service Offshoring

Outsourcing back-office or routine service activities to a foreign provider to reduce costs while keeping customer-contact tasks at home.

Beating the Clock

Gaining competitive advantage by using time zone differences to provide continuous service or bypass domestic work-hour constraints.

Cultural Adaptation

Modifying a service to respect local customs, language, and norms (e.g., no interest on loans in Muslim markets, midday siesta in Spain).

Standardization vs. Customization Dilemma

The strategic challenge of balancing global efficiency with the need to tailor services to local preferences.

Geert Hofstede’s Cultural Dimensions

Research identifying five work-value dimensions across 50 nations, highlighting cultural variations that affect service management.

Host-Government Restrictions

Legal or regulatory barriers—such as limits on profit repatriation—that can impede international service expansion.

Cookie-Cutter Approach

Replicating an identical service format in multiple locations to scale quickly and ensure uniform customer experience.