Innovation in the Provision of Medical Services in India

Abstract

As healthcare industry is on the crossroads-experiencing gamut of innovations to make treatment options efficient and cost effective, technology is playing an important role enabling knowledge management and resource allocation. Our study focuses on the innovation process through which customer acquisition and retention influences firm innovativeness in healthcare industry and develops a model of customer acquisition and retention orientation – resource and knowledge diversity – performance relationship. In this paper, we studied the role of two enabling constructs namely, customer acquisition and retention on firm innovativeness to determine the relevance of these efforts for incorporation into the proposed healthcare model (CARMS Model). With primary data collected from 267 strategic business units (hospitals) from India, authors demonstrate that a firm's focus on customer acquisition enhances its innovation performance. However, the same is partially proven in the case of customer retention. These effects are stimulated by diversity in customer knowledge and the firm's resource exploration. Overall, the effect of a firm's strategic focus on acquiring new customers and/or retaining existing customers (customer acquisition and retention orientations) on innovation performance is evaluated.