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Top1. Introduction
Companies operate in a dynamic business environment (Ishola & Olusoji, 2020). They require understanding customer requirements and preferences. They should be prompt in providing products and services to satisfy customers and to exceed their expectations (Song, Jang, Wiggins, & Nowlin, 2019). In this competitive scenario, companies require to remain updated about the new business realities and respond to them quickly. It is difficult to differentiate and satisfy customers by offering physical products. Firms provide services to complement their product offerings (Martinez, Neely, Velu, Leinster-Evans, & Bisessar, 2019). Companies focus on service differentiation (Talak, Manjunath, & Proutiere, 2019). Differentiation of services may relate to on-time delivery, better and faster responses to inquiries, or quicker resolution of complaints. Companies cannot succeed in the competitive environment without service differentiation (Costa & Mendonca, 2019). In this changing business scenario, companies require understanding the specific nature of services and the new service realities, systematically analyzing services, and realizing how to market them most effectively (Chen, Gerstner, & Yang, 2012). It is imperative for firms to focus on customer-oriented business strategies so that they develop and sustain competitiveness (Balci, Cetin, & Tanyeri, 2018). Specific instances of service failures and service recoveries are of concern to customers (Ibrahim, Abdallahamed & Adam, 2018). Companies try to understand customer requirements better and differentiate their services accordingly (Fan & Niu, 2017). There are different categories of service failures. Firms should treat each service failure uniquely and should provide services accordingly. It is certain that companies will not be able to satisfy all demands of all customers. The costs incurred will reduce firm profitability. Companies require optimizing between demands of customers and firm profitability. Companies may also require extending their range of service facilities to cater to various service requirements of customers (Tinnilä, Kallio, Raulas, & Vepsäläinen, 2017).
The objective of the study is to discuss the various facets of the new service realities. The study also reviews the existing strategies and the strategies which service companies may adopt to face the new service realities. The methodology adopted is that of conceptual analysis and critical analysis of the strategies followed by various service companies. The literature on service companies is analyzed to understand the new service realities. The study aims at analyzing the strategies and try to suggest better strategies. The study is structured as follows:
Section 2 focuses on the new realities in services. The new realities include shifts in customer relationships (discussed in sub-section 2.1 with sub-sections 2.1.1 and 2.1.2 focusing on customer empowerment and co-creation by customers respectively), effects of employee actions and customer dissatisfaction (discussed in sub-section 2.2), inappropriate behavior of employees (discussed in sub-section 2.3), and customer dissatisfaction and its effects (discussed in sub-section 2.4). Sub-section 2.5 discusses the viewpoints of critics. Section 3 focuses on the strategies adopted by different service companies to adapt to the new service realities. Sub-section 3.1 focuses on prevention of service failures and sub-section 3.2 focuses on the roles of employee and customer satisfaction in delivery of services. Section 4 discusses the initiatives taken by prominent service providers like Singapore Airlines (SIA) and Zappos which excel in delivering superior services. Section 5 focuses on discussions done in the study with sub-section 5.1 dealing with managerial implications and sub-section 5.2 dealing with the contributions of the study. Section 6 concludes the discussions with sub-section 6.1 focusing on future research directions.