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Abstract
Organisations implement innovation strategies to remain competitive and achieve improved business performance. Previous studies have focused more on product and technology innovations. The purpose of this article is to determine the influence of service innovations on the financial performance of organisations – specifically profit growth – using the theory of competitive advantage. A quantitative research method was employed to achieve the research objective, with linear regression analysis used to analyse the primary data. Cronbach values were calculated to determine the reliability and validity of the research instrument used to collect the primary data. The findings of the research on which this article is based, confirm the existence of a positive relationship between service innovation practices and profit growth. Recommendations are made to key stakeholders in the motor vehicle industry, and future research directions are outlined.
Highlights
In economies that are based on service and innovation, leading organisations, innovation consultants and academic researchers are shifting from product- to service-centricity (Dotzel, Shankar & Berry, 2013; Thakur & Kulkarni, 2017)
This study aims to contribute to the literature on the topic, by determining the influence the service innovation of service organisations have on profit growth, among retailers of motor vehicles
Innovation has a significant positive link with business performance of organisations (Alafeef, 2015; Al-Ansari et al, 2013; Mafini, 2015; Madrid-Guijarro, Garcia-Perez-de Lema & Van Auken, 2013). These results imply that innovation enables organisations to achieve improved business performance
Summary
In economies that are based on service and innovation, leading organisations, innovation consultants and academic researchers are shifting from product- to service-centricity (Dotzel, Shankar & Berry, 2013; Thakur & Kulkarni, 2017). Thankur and Kulkarni (2017) allude to the fact that, for organisations to remain competitive in today’s market, they need to continually innovate their services and service delivery processes. Thankur and Kulkarni (2017) allude to the fact that, for organisations to remain competitive in today’s market, they need to continually innovate their services and service delivery processes. Organisations can achieve and maintain competitive advantage through resources and capabilities that differ from those of their competitors, in that they are valuable and difficult to imitate by competing organisations (Bellini, Dell’Era, Frattini & Verganti, 2016; Hsu & Ziedonic, 2013). The achievement of competitive advantage depends, on the organisation’s innovative capabilities and resources (Yanadori & Cui, 2013). The best strategy to differentiate an organisation’s offering from that of its competitors (Martin, Gustafsson & Choi 2016), appears to be the capability to create distinctive service delivery. Developing and implementing innovative strategies is believed to assist in improving the business performance of organisations, by increasing market share and providing them with competitive advantage (Gunday, Ulusoy, Kilic & Alpkan, 2011; Prajogo, 2016)
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