Service innovation and competitive advantage with the perspective of system dynamics - using China Mobile as an example

Abstract

To explore the mutual strategic and conditional relationship between service innovation and competitive advantage, this paper used case studies and a literature research to explore how competitive advantage can be reached through service innovation. Making use of system dynamics, (suitable for the analysis of dynamic, complex non-linear relationships), the analysis of systematic behaviour and the causal feedback loop model, this paper summarised the key driving factors that shape competitive edge into three core competencies: the ability to respond to the environment, strategy adaptation, and learning and innovation capacities. In this study, the tactical actions of the China Mobile Communications Corporation (CMCC), whose service innovation surpasses that of its competitors, is used as an example. The path of its development services, strategic choices and innovation performance are used as a case study to verify this study’s argument and to offer a reference to the speculation on academic research and v...