Determining Appropriate Modes for Service Trade from Value Chain and Value Co-Creation Perspectives

The trends toward the service economy and globalization have made service trade a crucial issue for most service sectors. However, current analytical models relevant to service trade provide little guidance on linking service types and customer needs of targeted foreign countries. This paper identifies key issues in service trade from value chain and value co-creation perspectives. In particular, we elaborate how to integrate with modes of service trade and suppliers´ value co-creation strategies for the healthcare sector through two cases from the real world. Our findings suggest that a firm should first deploy the industry value chain it belongs to when it wants to penetrate foreign markets. A firm may then identify the needs of the target customers (including both domestic service providers and receivers) through value co-creation. Finally, by taking into account the features of the industry value chain, a firm can determine the most appropriate mode (and the corresponding routes if necessary) for service trade by following the GATS framework.