COMPETITIVE STRATEGIES AND POTENTIAL OF ENTRY BARRIERS IN SERVICES: A THEORETICAL APPROACH PROPOSAL

Abstract

This article aims to present a theoretical approach to competitive strategies and market structures in services. It uses a definition of services which states that a work process may be either human or mechanical, based on human resources or machines and equipment. From this standpoint, a matrix of services competitive strategies classification is built, which is based on the degree of capital intensity and scale of operations. Four possibilities are detected: i) low capital intensity and small scale of operation: strategies targeting reputation and customer loyalty; ii) low capital intensity and large scale of operations: strategies based on control and standardization of procedures; iii) high capital intensity and small scale of operation: strategies of innovation and increase of technological content; and iv) high capital intensity and large scale of operation: scale economy exploration strategies. After that, a matrix is presented which connects these strategies with entry barriers, which may be relational, cost, technological and of scale.