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While there are many studies on the relationship between service quality and productivity/efficiency (prodeff), between service quality and image and between services and positioning, so far, no work in the literature has examined the triangular relationship between quality, prodeff and positioning. This article aims to develop theoretically and empirically an insight understanding of the strategic relationship between service quality, prodeff and positioning strategies. A case study shows that the choice of positioning strategy is not a simple one: it is not merely a question of quality and prodeff, but concerns the behavior of the entire organization. Some key quality, prodeff and positioning measurement areas identified from the literature and the case study are outlined in the paper. Finally, the paper argues that the quality of PRODSERV and prodeff strategies must be tied to broad business and positioning strategies and should be part of the organization’s mission/vision statements.

The number of strategic alliances has almost doubled in the past ten years and is expected to increase even more in the future. More than 20,000 corporate alliances have been formed world‐wide over the past two years, and the number of alliances in the USA has grown by 25 percent each year since 1987. Outsourcing is a form of strategic alliance which is attractive for many organizations, but it is not simple or easy to create, develop, and support. There are many implementation problems and the failure rate is projected to be as high as 70 percent. In this paper a case study methodology is employed and the chosen case is outsourcing. Our case study shows that the development of a long‐term strategic outsourcing relationship requires moral, ethical standards, trust and a willingness not to try to exploit the new relationship at the expense of long‐term cooperation. The paper concludes that a strategic outsourcing relationship needs a specific management strategy and that companies should also pay more attention to the burdens embedded within it.