Structure of Global Services Market

As in commodity market, global services trade is also dominated by a few firms in the major functional areas. This trend is getting reinforced by continuous merger and acquisition process. This characteristic is most visible in accountancy, strategic consulting, advertising and law firms. In some other areas such as international courier service, dominance of a few firms is evident.

To enter such an oliopolistic market, firms from India must make a careful evaluation of the market structure, the potential market niches available and the ability of the company to deliver the services in an effective way. Benchmarking against industry competitors in terms of key functions will allow Indian firms to analyze their export preparedness. These key functions include:

1. Response time
2. Delivery process (convenience, access, use of technology)
3. Staff time allocation
4. Ability to target customers’ needs
5. Quality control and recovery techniques
6. Empowering frontline employees
7. Service standards and targets

Each service sector has its own unique characteristics. Therefore, the market entry strategy will have to be carefully calibrated to suit that market. Take for example, the accountancy market which is dominated by four global firms. Indian firms are small but have technical competency. Their weakness is in their inability to provide the large number of services that are provided by the global majors under one roof. To make an entry, Indian firms should adopt international accounting standards, maintain internationally recognized certification of their professionals incorporate state-of-art information technology, develop and promote niche expertise and ensure on-going training of staff for value added services. Firms not affiliated with the big four may find it profitable to join the Affiliated Conference of Practising Accountants (ACPA) which is a worldwide network of 80 independent accounting firms in 35 countries. ‘Services marketing’ is more people oriented and therefore involves a high level of human interface. A firm’s ability to perform in a cross cultural environmental is, therefore more critical for services export than for product export. A self assessment checklist to find out whether the cultures of the two trading partners are similar or dissimilar has been developed which will indicate the relative distance the two cultures and the areas where actions are required to be taken for harmonious working.


Assessing Cultural Differences>

* Everyone should have an equal voice in decisions.
* Managers can make better decisions than support staff
* Independent thinking is more important than consensus
* Consensus is more important than independent thinking
* Staff should be free to experiment as much as possible.
* Staff should be closely supervised to reinforce learning
* The employees’ first responsibility is to their own well being
* The employees’ first responsibility s to the company’s success
* Autonomy is more important than job security
* Job security is more important than autonomy
* Accurate feedback is essential, even if it is embarrassing
* Allowing others to save face publicly is essential
* Individual decisions are better than group decisions
* Group decisions are better than individual decisions
* Rules are made to be broken
* Rules are made to be kept
* Profitable business depends on working efficiently
* Profitable business depends on establishing personal rapport
* Individual differences are expected and accepted
* Individuals are expected to inform or group norms
* Ambiguous situations are intriguing and to welcomed
* Ambiguous situations are unsetting and to be avoided.
* Traditions are to be questioned
* Traditions are to be respected and followed
* People should follow their own intuition
* People should obey authorities religiously
* The most important traits are self expression and creativity
* The most important traits are politeness and respect.