Business services are an important part of a company’s success and are essential to the relationship between companies and their customers. These services can include everything from animal control to maintenance and tech support.
Business service industries contribute to 11% of European GDP.
This sector includes professional and technical services such as engineering, architecture and IT. They also include employment services and facility management.
The economy has become increasingly dependent on services. For example, manufacturing firms use business services to enhance their products’ value through new combinations of goods and services and to improve the efficiency of logistics processes.
Unlike product-oriented businesses, which produce and sell tangible goods such as cars or computers, most service-oriented businesses cannot do so because their products are intangible. This makes it difficult for a company to develop economies of scale.
In addition, the ambiguity of a service’s nature makes it more difficult for customers to know what it is they are paying for. Consequently, many service-oriented businesses have developed pricing structures that are not directly related to cost, but to value.
One of the biggest challenges that service-oriented companies face is developing a brand name recognition in the market place. This brand-name identification is critical to the survival of a service-oriented company. It is often difficult to compete with service-oriented companies that have built up a reputation for delivering a certain type of product and service, and if the service is abstract or complex it may take longer to build a brand name recognition.