Globalisation in service industries

Abstract

This thesis evaluates Yip's 'framework of global strategy' (1989, 1992, 2003) in the context of the services sector. Utilising empirical evidence from three service industries, analysis focuses on the power of the Yip framework to understand and explain internationalisation strategies adopted by multinational service firms. The thesis develops the framework into a stronger model which can be used as an analytical tool of globalisation and global strategy in a range of industry settings. Development of the Yip framework is ongoing throughout the project, testing proceeds in conjunction with theory development (Eisenhardt 1989). One of the major weaknesses in Yip's framework is a failure to specify relationships between dimensions, without which the framework cannot be modeled and tested. This thesis clarifies these relationships and develops a tool which anticipates firm use of international strategies based on industry conditions. Each of Yip's dimensions of'global drivers' and 'global levers' are critically examined and their relevance and completeness in explaining the use of global strategy in the service sector are considered. Three in-depth case studies are presented, one from each of the 'people-processing', 'information-processing' and 'possession-processing' service types (Lovelock and Yip 1996). Cases are based on interviews with an elite group of experts from each industry, alongside interviews with senior executives of British based service multinationals. In total, forty-six respondents were interviewed, summary, analysis and comparisons of the international strategies of twenty-one service multinationals are presented. Conclusions are made which lead to the development of a refined and extended framework which can be applied in a range of industries, services and manufacturing. Lovelock and Yip's hypothesised use of global strategy in different service types are examined, in light of the empirical evidence. Cross-case analysis of the three industries is used to posit a particular pattern of service sector use of global strategies. Motivations for use of integrated strategies are examined. It is suggested that services will adopt a range of global strategies designed to improve service quality and increase customer preference but not necessarily to reduce costs. Implications regarding the nature of competition in international service industries are drawn.