Unformatted text preview: oduct sourcing.
But sourcing is not just for product-based companies. For example, a professional service company,
such as an accounting practice, medical practice, law practice, management consulting ﬁrm, or graphic
design ﬁrm, is normally going to provide the service by employing professionals. In this case, the cost
is mainly the salaries of those professionals. CHAPTER 7: WHAT YOU SELL 7.3 Other service businesses are quite different. The travel agency provides a service through a
combination of knowledge, rights, and infrastructure, including computer systems and databases. The
Internet provider or telephone company provides a service by owning and maintaining a network of
communications infrastructure. A restaurant is a service business whose costs are a combination of
salaries (for kitchen and table waiting) and food costs. Technology
In this section, explain how technology affects your business, the products you sell, the means you use
to sell them, and the needs of the customers you serve.
In some cases this might be a change in scanning technology, retail point-of-sale systems, or even
video displays. In others, technology changes the nature of the goods or services you sell, such as
cellular phones or high-deﬁnition TVs that didn’t even exist a few years ago. Do you want to include
the Internet? Will a website change the way you do business?
Sometimes, technology can be vital to a service company, such as the case of the Internet provider
that uses wireless connections as a competitive edge, or the local company that offers conference
rooms for video conferencing. An accounting practice might gain a competitive advantage from
proprietary software or wide-area network connections to its clients. A medical laboratory might
depend completely on certain expensive technologies for medical diagnostics. A travel agency might
depend on its connection to an airline reservation system.
Technology can be critical to a manufacturing business in at least two ways: ﬁrst, the technology
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