Building competitive strategies for service organizations: a study of selected companies in Ahmedabad

Abstract

Research work aims to analyze the competitive environmental factors, strengths and weaknesses of the service firms and assess various strategies adopted by them for creating their competitive advantages. It attempts to investigate the success of firms with respect to application of the generic competitive strategies developed by Michael Porter. The study was conducted on seventeen firms drawn from various service areas and the analysis is carried out based on both survey and case methodology. Case study was conducted on three service firms. The major findings of the research are: a) The main environmental factors influencing the strategy formulation are competition, taste preference of customers and changing life style etc. b) Growth in sales is the most preferred organizational objective followed by increase in profit. c) Of the dimensions for competition, relationship with the customers is the most dominant one. d) Differentiation strategy is the most widely adopted competitive strategy of the generic strategies. However, combination of both cost leadership and differentiation strategies is also practiced. e) Firms adopting differentiation strategy give higher average gross sales than the firms following other strategies. f) Information technology is used for both cost advantage and differentiation strategies. No conclusive research has been done in regards to the relationship between competitive strategies and firms’ business performance mainly because of paucity of financial data. However, it has provided an avenue for future research. Managerial implications for building competitive strategies in service organizations are suggested.