Harvard Case - ZEISS Vision Care China: Driving Growth through Services
"ZEISS Vision Care China: Driving Growth through Services" Harvard business case study is written by Katherine Xin, Jin Zhong. It deals with the challenges in the field of Service Management. The case study is 12 page(s) long and it was first published on : Dec 20, 2023
At Fern Fort University, we recommend that ZEISS Vision Care China (ZVCC) adopt a multi-pronged strategy to drive growth through services. This strategy should focus on service innovation, customer experience management, and building a strong service culture across the organization. This approach will leverage ZVCC's existing strengths in technology and brand reputation while addressing the evolving needs of the Chinese market.
2. Background
This case study focuses on ZEISS Vision Care China (ZVCC), a subsidiary of ZEISS Group, a German multinational company specializing in optics and optoelectronics. ZVCC faces a challenging landscape in China, where the optical market is highly competitive and consumers are demanding a more personalized and convenient experience. The case study highlights ZVCC's efforts to transition from a product-centric approach to a service-oriented model, focusing on customer needs and building long-term relationships.
The main protagonists are:
- Dr. Michael Wang, Managing Director of ZVCC, who is tasked with leading the company's transformation towards a service-driven model.
- The ZVCC team, who are facing the challenges of implementing new service initiatives and adapting to a changing market environment.
3. Analysis of the Case Study
Strategic Framework: To analyze ZVCC's situation, we can utilize the Service-Dominant Logic (SDL) framework. SDL emphasizes that value is co-created between the service provider and the customer. This framework helps to understand how ZVCC can leverage its resources and expertise to deliver value to customers through services.
Key Issues:
- Shifting Consumer Preferences: Chinese consumers are increasingly demanding personalized and convenient experiences. This requires ZVCC to move beyond traditional product offerings and focus on providing tailored services.
- Competitive Landscape: The optical market in China is highly competitive with both local and international players vying for market share. ZVCC needs to differentiate itself through its service offerings.
- Internal Challenges: ZVCC faces challenges in implementing its service strategy due to internal resistance to change, lack of service expertise, and insufficient investment in service infrastructure.
Analysis:
- Service Quality: ZVCC needs to ensure high service quality across all touchpoints, from initial customer interactions to after-sales support. This can be achieved by implementing the SERVQUAL model to assess customer perceptions of service quality and identify areas for improvement.
- Customer Experience Management: ZVCC should focus on creating a seamless and positive customer experience through customer journey mapping and service blueprinting. This will allow them to identify key moments of truth and optimize the customer journey.
- Service Innovation: ZVCC needs to invest in service innovation to differentiate itself from competitors. This can be achieved through service design thinking, technology-enabled services, and service co-creation with customers.
- Service Culture: Building a strong service culture is crucial for ZVCC's success. This involves employee empowerment, employee incentives, and service training to ensure that all employees are committed to providing excellent customer service.
4. Recommendations
1. Implement a Comprehensive Service Strategy:
- Define a clear service value proposition: ZVCC should articulate a compelling value proposition that highlights the unique benefits of its service offerings. This should be communicated effectively to customers through marketing and sales channels.
- Develop a service portfolio: ZVCC should develop a diverse portfolio of services that cater to different customer segments and needs. This can include personalized eye care consultations, online appointment booking, home delivery services, and premium after-sales support.
- Invest in service infrastructure: ZVCC should invest in technology and infrastructure to support its service offerings. This includes upgrading its IT systems, implementing CRM software, and developing a robust online platform.
2. Enhance Customer Experience:
- Customer journey mapping: ZVCC should map the customer journey across all touchpoints to identify key moments of truth and opportunities for improvement.
- Service blueprinting: ZVCC should develop service blueprints to visualize the service delivery process and identify potential bottlenecks.
- Service recovery: ZVCC should establish a robust service recovery process to handle customer complaints and ensure customer satisfaction.
- Customer feedback management: ZVCC should actively collect and analyze customer feedback to identify areas for improvement.
3. Foster a Service-Oriented Culture:
- Employee empowerment: ZVCC should empower employees to make decisions and take ownership of customer service.
- Employee incentives: ZVCC should implement incentive programs to reward employees for providing excellent customer service.
- Service training: ZVCC should invest in comprehensive service training programs for all employees, covering customer service skills, product knowledge, and service delivery standards.
4. Leverage Technology for Service Innovation:
- Technology-enabled services: ZVCC should explore opportunities to leverage technology to enhance its service offerings. This can include online consultations, virtual reality experiences, and AI-powered tools for personalized recommendations.
- Multichannel service delivery: ZVCC should offer services through multiple channels, including online, mobile, and physical stores.
- Data analytics: ZVCC should utilize data analytics to understand customer preferences, identify service trends, and personalize service offerings.
5. Build a Strong Brand:
- Service branding: ZVCC should develop a strong service brand that reflects its commitment to customer satisfaction and service excellence.
- Marketing strategy: ZVCC should develop a targeted marketing strategy to promote its service offerings and build brand awareness.
- Public relations: ZVCC should engage in public relations activities to build positive relationships with customers and stakeholders.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and consistency with mission: ZVCC's core competencies in optics and technology are leveraged to deliver innovative and high-quality services. This aligns with the company's mission to provide superior vision care solutions.
- External customers and internal clients: The recommendations consider the needs and expectations of both external customers and internal clients, including employees, partners, and distributors.
- Competitors: The recommendations aim to differentiate ZVCC from competitors by offering unique and valuable services.
- Attractiveness: The recommendations are expected to lead to increased customer satisfaction, loyalty, and revenue growth.
6. Conclusion
By implementing these recommendations, ZVCC can successfully transition to a service-driven model, enhance customer experience, and drive business growth in the competitive Chinese optical market. This approach will allow ZVCC to leverage its strengths in technology and brand reputation while adapting to the evolving needs of Chinese consumers.
7. Discussion
Alternatives:
- Focusing solely on product innovation: This approach may not be sufficient to attract and retain customers in a highly competitive market.
- Adopting a low-cost strategy: This approach may compromise service quality and customer satisfaction.
- Outsourcing all service operations: This approach may result in a loss of control over service quality and customer experience.
Risks:
- Resistance to change: Implementing a new service strategy may face resistance from employees who are accustomed to the traditional product-centric approach.
- Lack of service expertise: ZVCC may lack the necessary expertise to develop and deliver innovative and high-quality services.
- Insufficient investment: Implementing a successful service strategy requires significant investment in technology, infrastructure, and training.
Key Assumptions:
- Customer demand for services: The recommendations assume that Chinese consumers are willing to pay for premium services and value personalized experiences.
- Technology advancements: The recommendations assume that technology will continue to evolve and provide new opportunities for service innovation.
- Internal commitment: The recommendations assume that ZVCC's management team and employees are committed to implementing the new service strategy.
8. Next Steps
- Develop a detailed implementation plan: This plan should outline the specific steps, timelines, and resources required to implement the recommendations.
- Pilot test new service offerings: ZVCC should pilot test new services in select markets to gather feedback and refine the offerings before launching them nationwide.
- Monitor service performance: ZVCC should regularly monitor service performance metrics, such as customer satisfaction, service quality, and revenue growth, to track progress and identify areas for improvement.
- Communicate the service strategy: ZVCC should communicate the new service strategy effectively to employees, customers, and stakeholders to ensure buy-in and support.
By taking these steps, ZVCC can successfully transform its business model and achieve sustained growth through services in the Chinese optical market.
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Case Description
This case study describes how ZEISS Vision Care China, a subsidiary of the Germany-based ZEISS Group, was transforming itself into a service-oriented business. After the implementation of the transformation towards an agile organization-which involved digitalization and a radical organizational change-the company was beset with numerous issues in 2021, such as chaotic work processes, the increased workload of all staff, the resignation of critical personnel, and customer complaints. On top of that, some executives expressed concerns during a strategy meeting with Winston Yang, General Manager of ZEISS Vision Care China, regarding the need for such a radical overhaul, especially considering the company's already robust annual growth rate. Some executives even suggested the transformation should be postponed. The unexpected and challenging situation of the company forced Winston Yang to ask himself whether it would be necessary for the company to continue with such a high-risk organizational transformation.
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