Final answer:
Service providers' 'back room activities relate to operational logistics similar to those in a manufacturing setting, such as relationships with suppliers and inventory management. These activities impact business success and employee welfare, akin to historical manufacturing jobs that offered good wages and quality of life. Strategic site selection, exemplified by Coca-Cola's global bottling strategy, is crucial for both service and manufacturing industries.
Step-by-step explanation:
Service providers' "back room" activities, like the connections a restaurant has with suppliers of food, furniture, kitchen equipment, and the building where it is located, often have manufacturing characteristics like those seen in a large manufacturing factory, such as a shoe factory, or a hospital with hundreds of job classifications. These activities may involve logistics, inventory management, and relationships with suppliers, similar to the intricate operations of manufacturing. Furthermore, just as manufacturing activities can have significant economic impacts and consequences if poorly managed, service industry back-end operations can similarly affect business success and customer satisfaction.
Manufacturing often transforms raw materials with little inherent value into products with a much higher value, characterized by large profits or value added per unit. If working conditions are favorable, this can translate into higher wages for employees, much like in the manufacturing industry of the 20th century where many jobs offered a high quality of life without needing extensive education. However, shifts in global competition and policy affect both manufacturing and service industries alike.
Some businesses like Coca-Cola take a different approach; they utilize a bulk-gaining strategy as opposed to a bulk-reducing one, shipping concentrated syrups to global franchises rather than the final product. This is because the addition of local resources (water, sweeteners) tends to increase the product's weight, making it more economical to add these inputs closer to the market. This strategy, along with physical location benefits, such as a gas station at a busy intersection, highlights the importance of strategic site selection and its impact on a firm's success.