Scale and differentiation in services : using information technologies to manage customer experiences at Harrah's Entertainment and other companies

Abstract

This dissertation is focused on the topic of service innovation and explores economies of scale and strategic differentiation in services via an inductive field-based case study of the world's largest casino gaming company, Harrah's Entertainment. It includes comparisons to services firms in other industries such as distribution/logistics (UPS) and for-profit/online education (Apollo Group/University of Phoenix). The findings suggest that scale and differentiation (considered by many to be mutually exclusive in services) can be combined through the strategic use of information technology in a manner that increases customer switching costs, resulting in improved profitability and returns. The limitations of standardization-only scale-oriented strategies are discussed, and the dissertation concludes with a description of the three key components needed by any firm seeking to employ a strategy of scalable service differentiation: (1) a loyalty program, or other means of linking specific transaction data with specific customers, (2) an analytic engine that determines the ranking/prioritization of customers and the criteria upon which to differentiate services, and (3) a set of information technology tools that automate consistent differentiated service delivery across a company's touch-points with its customers.