SETTING THE STRATEGIC DIRECTION IN A PRODUCT-SERVICE FIRM

Companies competing on a global basis increasingly need to decide whether competitive success requires them to emphasize product features or service. An increased emphasis on either of these components requires the development of unique skills and capabilities. While neither the product nor services can be neglected, setting resource allocation priorities Often necessitates some trade-offs. To ensure the maximum impact of potential investments, a strategic direction needs to be set. The purpose of this research is to develop a model to help a firm determine the strategic direction it should pursue. Drawing on the optimal product positioning literature, the model uses an analytical approach to the resolution of the strategic question of whether to invest in product or service improvements.