Porter′s Five Forces Analysis
Michelle_Michy
Examples.pdf
Literature Review
Business Development and Strategy
Aleksandra Duong
H643
27.01.2021
GIHE
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Literature Review: SERVQUAL Model
The SERVQUAL model was developed by Parasuraman and acts as an instrument measuring
service quality across many business sectors. The model is identified by five different
dimensions which include tangibility, reliability, responsiveness, assurance and empathy. As a
result, such a tool is able to measure the gaps between service delivered and customer’s
perception, allowing further study of customer satisfaction (Parasuraman et al.,1985, as cited in
Goumairi et al., 2020). The SERVQUAL model has been implemented in various industries,
proving its usefulness and reliability. However, some sectors found greater focus being attached
to one dimension compared to the other, suggesting the model’s differentiation in its application.
The four studies which aimed to measure the gap between expectation and perception using the
SERVQUAL model, all agreed on the instrument’s high effectiveness. Sitaraman et al. (2020),
who performed a study on patients in the dentistry care department, confirms the ability of the
model being used on a regular basis. As a result, yearly reports assessing service quality can be
compared in order to investigate how patients’ perceptions change over time. Similarly, a pilot
study on low-cost Indian airlines verifies quality service as impossible to be measured
quantitatively but rather has to be assessed from the perspective of the customer (Hasan et al.,
2019). As both Goumairi et al. (2020) and Untaru et al. (2015) acknowledge the SERVQUAL
model to be able to adapt in many services, Hasan et al. (2019) believes the model is incapable to
adopt in all service industries since the tool does not address any specific issues. In the airline
industry as an example, it does not take into account service quality which are airline specific
and capturing real service perception is difficult since the customer already has a standardized
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interaction with the staff while reserving a ticket, boarding, or handling the luggage. However,
Untaru et al., (2015) whose study was conducted in online banking services, insists on the
importance of measuring service quality as it helps in retaining customers by increasing
customer satisfaction and loyalty, thus, also generating higher profits. Even though each study
came from different service industries, the methodology was the same for all. Sitaraman et al.
(2020) created two questionnaires using the 5 point Likert scale, one measuring expectation and
another one measuring perception. Likewise, Untaru et al. (2015) applied the same quantitative
method, however with a 7 point Likert scale. Contrastingly, Goumairi et al. (2020) conducted a
questionnaire with a sample of Moroccan engineering students where he used a formula in order
to measure the difference in quality of service, where expected service was subtracted from
perceived service. Meanwhile, Hassan et al. (2019) sent out questionnaires on an online platform
where information obtained increased validity of the study since they were based on customers’
actual experience in low-cost Indian airlines. Nevertheless, each study ended up with different
results with different dimensions being considered as more important than others. The study on
patients’ in the dentistry department showed positive results in both service expectations and
patient’s perception, thus, all expectations were met and even exceeded. Largest positive gap was
found in the reliability dimension suggesting discipline from the staff and reliable treatment
procedures. Whereas, tangibility showed the lowest positive gap indicating an alert for the
hospital to consider on improving physical facilities (Sitaraman et al., 2020). On the other hand,
results from the university study revealed dissatisfaction from the students, where most negative
gaps were in the tangibility dimension regarding physical and school services provided to the
engineering students. Therefore, the appearance of physical facilities had an impact and
suggestions were made to consider investing in new and modern laboratories (Goumairi et al.,
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2020). In terms of the pilot study, there was a strong correlation between customer satisfaction
and loyalty, thus, affecting service quality. Reliability as a dimension showed high quality,
meaning, service was provided with high accuracy and dependency referring to safe travelling or
punctual service (Hasan et al., 2019). Lastly, the online banking service case study found
respondents showing lowest satisfaction in reliability and assurance due to the fact that the
mobile application could not be accessed at all times and consisted of inaccurate information.
The average service quality was negative, thus, expectation did not match perception in
customer’s eyes (Untaru et al., 2015).
The SERVQUAL model has proved to be consistently used in different service industries
including dentistry, airlines, education and banking services. Therefore, within the hospitality
industry, Hasan et al. (2019) believes the instrument allows for thorough analysis of customer
satisfaction and loyalty. Moreover, the five dimensions of the SERVQUAL model grants
effective measurement between expected service quality and customer’s perception of the
service received. As a result, it provides further insights on the factors that require further
improvements. In order for the hospitality industry to generate consistent profit, the main source
identifies with customer satisfaction. Hence, the SERVQUAL model is a practical tool to
measure the unmeasurable: quality and perception.
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References
Goumairi, O., Aoula, E. S., & Souda, S. B. (2020). Application of the servqual model for the
evaluation of the service quality in moroccan higher education: Public engineering
school as a case study. International Journal of Higher Education, 9(5), 223–229.
Hasan, M., Khan, M. N., & Farooqi, R. (2019). Service quality measurement models:
Comparative analysis and application in airlines industry. Global Journal of Enterprise
Information System, 10(3), 29–41.
https://doi-org.laureatech.idm.oclc.org/10.18311/gjeis/2019
Sitaraman, P., Shanmugasundaram, K., & Muthukrishnan, A. (2020). Assessment of service
quality in special care dentistry department using servqual model. Journal of Indian
Academy of Oral Medicine and Radiology, 32(3), 209–215.
https://doi-org.laureatech.idm.oclc.org/10.4103/jiaomr.jiaomr_69_20
Untaru, E. N., Ispas, A., & Dan, I. (2015). Assessing the quality of banking services using the
servqual model. Romanian Journal of Marketing, 2, 84–92.
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Literature Review: Ansoff’s Matrix
One of the instruments which analyzes strategies for business growth is known as the Ansoff’s
Matrix. Within the existing market and product, the theory shows four strategies labelled from
less risky to the riskiest. These include market penetration, market development, product
development and diversification (Hussain, 2013). Hence, each strategy allows firms to evaluate
possible risks which hinder the brand’s potential to grow. Such matrix has been used by
numerous marketers in order to create competitive advantage and adapt to the continuously
changing market. Thus, in order for businesses to progress, Ansoff’s matrix is used as a strategy
to reach objectives formed by the company.
Application of the Ansoff’s matrix was conducted across industries in order to consider
strategies which would promote growth. Since the fast food sector in Pakistan has been least
explored with no guidelines on how and where to invest in, Hussain et al. (2013) adopted the
matrix to evaluate strategies that bring competitive advantage into the market. Moreover, the
author insists on both internal and external environment conditions to be additional factors which
affect sales and performance of the business. Furthermore, Loredana (2017) describes many
small companies to be implementing such effective strategic tool and specifically aiming at
diversifying their position in the market whilst reducing risks. Therefore, applying Ansoff’s
matrix helps in evaluating the success of the business. Similarly, Yin (2016) agrees on enforcing
diversification strategy to generate profit in enterprises such as the Evergrande Group and
determining which other strategies can generate positive progress. By obtaining further analysis
of the Ansoff’s matrix, Khajezadeh et al. (2019) conducted research in both the hygiene and
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detergent industry to evaluate how the strategies can be controlled to achieve best competitive
advantage in the market. However, the methodologies varied immensely as only one
standardized questionnaire with the 5 likert scale was conducted by Hussain et al. (2013),
whereas other studies required the Analytic Hierarchy Process method which calculates the value
of each strategy or the Artificial Neural Network used as a tool to anticipate the product’s market
position whilst the company aims to increase their shares (Yin, 2016)(Khajezadeh et al., 2019).
The results presented contrasting findings with different strategies being recommended to the
firm. The study by Hussain et al. (2013) recognized significant importance in all strategies,
except for diversification which did not prove to benefit the fast food sector. This could be due to
the dynamic environment of the market which cannot constantly implement diverse strategies
without knowing the impact it would have in the long-term. Thus, further exploration has been
recommended. Besides, Yin (2016) also believes companies should start implementing their
strategies in the order of market penetration, product development, market development, and
afterwards diversification if truly necessary. Results showed a negative relationship between
diversification and business growth, thus, it is recommended to focus on the existing market first
and gradually start developing other products in different markets later. Khajezadeh et al. (2019)
as well did not mention diversification as the choice of strategy, instead, both market penetration
and product development was suggested for both the detergent and hygiene industry in order to
retain growth in the existing market. On the other hand, only Loredana (2017) recommends to
implement a diversification strategy following Ansoff's matrix theory, following an example of
Mcdonalds and the effectiveness of each strategy being implemented. As a result, the author
suggests that a manager should be able to run many businesses even if they are not related to
each other. Even if such a strategy is considered to be the riskiest, it also aligns with reducing
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risk in the long-term and continuously growing in the market. Interestingly, as the strategies are
the same, some studies included a more in-depth explanation within diversification. As Yin
(2016) classifies diversification into concentric, horizontal and vertical, Khajezadeh et al. (2019)
indicates two forms of the strategy: the related and unrelated diversification. Thus, bringing more
extended knowledge in understanding the relevance of the Ansoff’s Matrix.
Adopting the Ansoff’s matrix enables for a thorough strategic decision in retaining a competitive
advantage in the market and increasing growth and profitability. The hospitality industry faces
strong competition and constant fluctuations in needs and demands. Hence, positioning the
company appropriate to its strategies is essential. Research concluded that diversification is the
riskiest and least recommended strategy since entering an unknown market is uncertain and
unpredictable (Yin, 2016). Though when implemented successfully, profits would be generated
significantly puting the firm under a great advantage. In conclusion, Ansoff’s matrix is an
effective tool in delivering optimal strategies which facilitate growth in emerging and already
existing businesses.
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References
Hussain, S., Khan, J., Rizwan, A., & Latif, A. (2013). Ansoff matrix, environment, and
growth-an interactive triangle. Management and Administrative Sciences Review, 2(2),
196-206.
Khajezadeh, M., Niasar, M., Asli, S., Davari, D., Godarzi, M., & Asgari, Y. (2019). Application
of neural network in portfolio product companies: Integration of boston consulting
group matrix and ansoff matrix. World Academy of Science, Engineering and
Technology International Journal of Economics and Management Engineering, 13(6),
809-813. https://doi.org/10.5281/zenodo.3299381
Loredana, E. M. (2017). The use of ansoff matrix in the field of business. Annals of “Constantin
Brancusi” University of Targu-Jiu. Economy Series, 141–149.
Yin, N. (2016). Application of ahp-ansoff matrix analysis in business diversification: The case of
evergrande group. MATEC Web of Conferences, 44, 01006.
https://doi-org.laureatech.idm.oclc.org/10.1051/matecconf/20164401006
