For long term success the service provider has to be able to think and act strategically. According to ITIL the service strategy process incorporates four fundamental activities:

Firstly, the definition of the market. On the one hand services can be offered to achieve business strategies. On the other hand you need strategies to offer services on the market.

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The second activity covers the development of the offering. The service offering should be defined on a results basis in order to orientate all aspects of service management exclusively towards the perspective of customer expectations. A service portfolio has to be developed in order to represent all binding service investments towards the market. The service pipeline defines all service solutions that are still under development. In contrast to that, the service catalogue as a part of the service portfolio defines all services that are visible and available for the customer.

The third activity entails the development of the strategic assets of the service provider including the resources and capabilities of the service organization as well as the development of a service management system.

The fourth activity covers all measures in preparation for the implementation of the strategy. An analysis based on an assessment of the strategic position must first be carried out to determine what the organization already does and how it does this in order to identify the differences compared with the existing strategy. The definition of measurable goals closes the gaps and gradually orientates the service assets towards fulfilling the customer expectations. All critical success factors are identified so that the success or failure of the strategy can be measured. It may be necessary to observe the competition and, if necessary, adjust the priorities.