Business services are activities that support a company yet do not involve the delivery of a tangible commodity. For example, information technology (IT) service management, which helps a firm align IT assets with business needs, is considered a type of business service. Other business services include warehousing, marketing and inter and intra-departmental communication.
Some service businesses sell their products directly to consumers while others offer their services to other companies or organizations. A common way for a business to provide a service to another company is by providing a consultant. These individuals are paid to help a company improve its operations or find ways to save money. These are called outsourcing business services.
Other types of service businesses include daycare, senior care and entertainment services. For instance, a daycare business offers parents a safe place to leave their children while they work during the day. A child care business teaches young children and also provides a place for the kids to play. A photography business takes photos for a variety of purposes, including weddings and birthday parties.
The success or failure of a service business often comes down to whether the organization gets four things right or wrong. In the same way that sophisticated managers understand the core principles of product business models, they now have a similar tool kit for understanding and building successful service business models. As a result, the field of service strategy is now becoming as mature as the discipline of product strategy has been for decades.