Strategic pathways to cost-effective service excellence

Abstract

Cost-effective service excellence (CESE) is defined as achieving low unit costs (i.e., high productivity) while at the same time delivering an industry-leading level of service quality (i.e., service excellence). This chapter is based on and extends the article by Wirtz and Zeithaml (2018), 1 and discusses how CESE can be achieved through three strategic pathways. The first is a dual culture strategy that provides a comprehensive set of high-quality services at low cost, largely driven by leadership ambidexterity and contextual ambidexterity. The second is an operations management approach that reduces process variability and thereby allows increased use of systems, technology, robotics, and artificial intelligence (AI). The third is a focused service factory strategy that enables CESE through a highly specialized service operation, typically delivering a single type of service to a highly focused customer segment. These three strategies can be used independently or in certain combinations. This chapter discusses the theoretical underpinnings and workings of these strategic pathways and advances potential future research directions.