Successful Service Innovation Research Articles

Service Innovation in the Hospitality Industry

The notion of service innovation has gained significant source of competitive advantage to any organization, in general, and also to firms in the hospitality industry. Any organization desiring to succeed must continually seek to create innovative products or services to gain and sustain an edge in the increasingly competitive market environment. This paper reviews extant literature associated with service innovation from two perspectives. A general literature review of the concepts associated with service innovation is performed drawing attention to such items as, the concept of service innovation; the definitions of service innovation; the differences between product and service innovation; the dimensions of service innovation; the drivers of service innovation; patterns of service innovation; effects of service innovation; and service innovation success factors. Second, a literature review associated with service innovation in the hospitality industry is undertaken. This latter review draws attention to the benefits of service innovation in the hospitality industry; the types of innovations in hospitality firms; and summarizes the findings of recent studies on service innovation in hospitality firms. Overall, the study found evidence of significant research attention to service innovation in the context of services in the hospitality industry. Moreover, it was found that some regions or countries, such as Europe and the Far East (Taiwan, in particular) appeared to be the recipients of greater attention in service innovation literature associated with the hospitality industry

Deployment Strategies for Service Innovation

In large organizations, local use of innovations is not enough; extracting the full use of the innovation requires deployment across the organization. The purpose of this paper is to explore strategies for the deployment of service innovations and factors influencing success. We adopt an inductive theory-building approach with a longitudinal embedded case study of ten successful service innovations. We find two deployment strategies: required adoption, in which subsidiaries are required to adopt innovations, and voluntary adoption, in which adoption is not compulsory—innovations are showcased, but the adoption decision is left to the subsidiaries. We have investigated the factors influencing deployment, including the decentralized nature of service innovation, fit with the internal and external context, extrinsic and intrinsic motivations, and handovers. Based on analyses of case evidence, we put forward research propositions accordingly. This study provides managerial guidance for multidivisional organizations to extract full value from service innovations. Although some results may be particular to the Chinese context, research in other contexts can broaden the generalizability of the findings.

Managing ecosystems for service innovation: A dynamic capability view

The success of service innovations is intertwined with firms' capabilities to coordinate, orchestrate, and collaborate with a set of external actors. Adopting an ecosystem and dynamic capability perspective, this article examines ecosystem-related capabilities for developing service innovation in product-centric firms. The research uses a mixed-methods approach focusing on the energy utility sector: (1) a survey with 133 managers from 28 firms that allows a comparison of ecosystem-related capabilities between firms with high and low service-innovation intensity; and (2) a complementary interview study with 8 of these firms that have high service-innovation intensity, allowing a detailed understanding of the relevant ecosystem-related capabilities to be developed.From the data we derive a set of 12 ecosystem-related capabilities for service innovation related to the sensing, seizing, and reconfiguring of external resources. The results indicate that firms with high service-innovation intensity possess significantly stronger ecosystem-related capabilities than firms with lower service-innovation intensity. Those firms also seem to sense and seize external opportunities and resources to a greater extent in order to reconfigure their service-related ecosystems. The findings also show that successful service innovators consider not only value-adding partnerships, such as suppliers and customers, to be relevant for service innovation, but also relationships with non-direct value-adding ecosystem stakeholders (e.g., local governments, communities, legislators).

Service innovation capabilities as the precursor to business model innovation: a conditional process analysis

ABSTRACTEspousing a continuous innovation in existing business models is a necessity to sustain in present dynamic status quo of emerging mobile banking sector of Pakistan. Therefore, this research aims to empirically investigate the factors that affect the business model innovation among the key players of the mobile banking sector of Pakistan. In this regard, four research questions have been formulated. Research survey has been conducted from the 365 employees of mobile banking sector of Pakistan through a stratified sampling strategy. The collected data were analyzed using the regression-based process approach of Andrew Hayes [2017. Introduction to mediation, moderation, and conditional process analysis: A regression-based approach. Guilford Press]. The results of the collected data revealed that the service innovation capabilities, innovation success and knowledge exploration serve as the antecedents of business model innovation among Pakistani mobile banking sector. The contribution of this research work is evident from the fact that no or negligible researches on the business model innovation have been carried earlier in the cultural context of Pakistan. Furthermore, this research work attempts to close some of the identified gaps in the literature.

Does innovation capabilities affect the new service innovation success among Pakistani cellular companies?

PurposeIn today’s Pakistan, the emergence of new forms of business in collaboration with the mobile service providers is bringing a big difference, not only in every walk of life but also in digital economy of the country. Therefore, the purpose of this paper is to explore what are the factors that determine the success rate of new innovative services in cultural context of mobile service providers of Pakistan.Design/methodology/approachData have been collected from 397 employees of cellular firms of Pakistan by using the simple random sampling strategy. The gathered data were analyzed by using the regression-based process approach of Hayes and Preacher (2014).FindingsThe results indicated that innovation capabilities and service innovation have significant positive effect on the short-term, long-term and indirect success of the service innovation. It was also found that the service innovation mediates the relationship among the capabilities to innovate and service innovation success rate. The findings of this research work are beneficial for the practitioners of cellular firms of Pakistan.Originality/valueThe value of this research work is evident from the fact that this research work attempts to address some identified gaps of existing body of literature. This research work provides some key insights for practitioners and also discusses the new avenues for future researches.

Delightful Service Innovations in the Context of Technology-Based Self-Services - Scale Development and Validation

Technology-based self-services as service innovations are particularly interesting. Although service and innovation scholars agree that by developing successful service innovations, customer involvement and customer delight play an important role, current measurements neglect customers’ affective perceptions. Thus, the purpose of the current article is to develop a reliable and valid scale of delightful service innovations which incorporates aspects of new services which delight the customers. Based on comprehensive validation procedures, delightful service innovations are formed by six dimensions: sustainability, convenience, social status, playfulness, trustworthiness, and interactivity. Furthermore, delightful service innovation has positive effects on customer loyalty and positive word of mouth. The results are discussed with reference to innovation research and practice.

FinTechs as Service Innovators - Understanding the Service Innovation Stack

Fundamental internal and external changes coupled with digitalisation have enabled new market entrants, FinTechs, to innovate services, creating competitive solutions to incumbents' offering. The purpose of this article is to understand the service innovation approach of FinTech companies. The complexities of service innovation are explained with a theoretical concept of service innovation stack, which presents the multiple components needed for successful service innovation. The usefulness of this construct is observed with a longitudinal case study of 10 FinTech startup from Finland using interviews and other data. These are shown with a visual representation, which ties in the internal activities with the external ones and shows the interplay between them. With the representation of the service innovation stack, the service innovation within financial industry can be better understood and further developed. The authors further suggest that though the framework is based on cases from FinTech startups, it might be relevant also for the incumbents.

Unlearning and public services —A case study with a Vygotskian approach

All successful public service innovations require learning and just as importantly and often more deeply, unlearning. This research investigates the unlearning of health professionals focusing on the issue of why and how unlearning happens at an individual level for health care professions in the transition from product logic to service-dominant logic at Tampere University Hospital in Finland. We applied a qualitative single case study method, a problem-centred unlearning framework with a narrative approach, which facilitates understanding of how the informants perceived the service transition process. We identified three distinct unlearning narratives, and we recognised barriers and enablers to unlearning in the health care service culture and context and suggest ways in which these might be overcome. Results of the study shows that deep and radical change in public health care services is possible, by applying distributed leadership and allowing individual actors time for reflections, mind-wandering, listening and learning from users and discourse between professionals.

Customer value co-creation and new service evaluation: the moderating role of outcome quality

PurposeThis study aims to examine how the degree of value co-creation affects Chinese customers’ evaluations of new tourism and hospitality services, and how the outcome quality moderates this relationship under different conditions.Design/methodology/approachThe proposed hypotheses are tested using a self-reporting questionnaire-based survey and two experimental designs. Data analysis entailed hierarchical multiple regression analysis, a simple slope test and a two-way ANOVA.FindingsThree component studies assessed boundary conditions for the positive effects of the degree of value co-creation on customers’ evaluations of new services. Studies 1 and 2 indicated that unequivocal high-quality outcomes amplified positive effects, which were reversed by unequivocal low-quality outcomes. Study 3 demonstrated that in Chinese contexts of ambiguous outcomes, the relationship between the degree of co-creation and new service evaluation was positively mediated by self-integration in private contexts and negatively mediated by loss of face in public contexts.Practical implicationsThis study identifies critical factors influencing successful service innovation in China within different contexts. Its finding of context-dependent customer engagement in value co-creation has managerial implications for facilitating favorable new service evaluations.Originality/valueThis exploratory study addresses a research gap regarding service innovation, offering insights into positive and negative influences of customer value co-creation on new service evaluation, under different outcome quality conditions in the domestic Chinese hospitality and tourism sector.

The S-D logic-informed “hamburger” model of service innovation and its implications for engagement and value

PurposeWhile research on customer engagement and service innovation is rapidly emerging, limited insight exists into the interface of these topic areas. However, given the shared notion of (e.g. customer/firm) interactivity across these concepts, the purpose of this paper is to explore their theoretical interface that remains nebulous to date.Design/methodology/approachBuilding on a literature synthesis, the authors develop an S-D logic-informed “hamburger” model of service innovation that depicts the service innovation process, and its ensuing outcomes for particular actor groups, including the firm, its customers, etc. They conclude by proposing frontiers for future research that arise from the model.FindingsThe authors explore the theoretical foundations of customer engagement and service innovation, and integrate these in their S-D logic-informed “hamburger” model of service innovation. In the model, they acknowledge the key role of organizational resources in enabling service innovation, which will interact with specific service innovation actors (e.g. customers, employees) to create successful service innovations. The model next proposes service innovation development and implementation, from which focal service innovation actors will seek, and derive, particular types of value (e.g. profit for the actor of the firm), as shown at the top of the model. They conclude by offering a set of future research directions that arise from the model.Research limitations/implicationsThe S-D logic-informed “hamburger” model of service innovation can be used to guide future research into service innovation, including studies investigating service innovation’s role in driving customer engagement and value.Practical implicationsThe attained insight will be useful to managers seeking to enhance their service innovation-based returns (e.g. by suggesting ways in which service innovation can enhance customer engagement).Originality/valueThe authors propose a novel, S-D logic-informed “hamburger” model of service innovation and its key antecedents (e.g. firm-based resources) and consequences (e.g. customer engagement and value).

HOW DO FIRMS OPEN UP THE FRONT-END OF SERVICE INNOVATION? A CASE STUDY OF IT-BASED SERVICE FIRMS IN THAILAND

This paper focusses on the openness in the front-end phase of service innovation and its impact on innovation success. The early stages of innovation are fuzzy and unstructured, thus often being called “fuzzy front-end” (FFE) by scholars. The FFE begins when an opportunity is considered worthy of further ideation, exploration, and assessment and ends when a firm decides to invest in — or terminate — an idea. Although openness has been identified as pivotal to innovation performance, little effort has been put into exploring its role in the early phase of innovation. By drawing on the data of a multiple case study in Thai online service firms, we are able to identify four key dimensions of FFE openness competence: prior related knowledge, top management support, the presence of workable prototype, and slack resource. Furthermore, we found three openness activities that often take place in the FFE phase of successful online service innovation, i.e., external search, inter-firm partnerships and customer experimentation. From a managerial perspective, our study provides useful insights to innovation managers aiming at enhancing front-end performance through openness.

The Dilemma of Service Productivity and Service Innovation

We conduct a systematic exploratory investigation of the effects of firms’ existing service productivity on the success of their new service innovations. Although previous research extensively addresses service productivity and service innovation, this is the first empirical study that bridges the gap between these two research streams and examines the links between the two concepts. Based on a comprehensive data set of new service introductions in a financial services market over a 14-year period, we empirically explore the relationship between a firm’s existing service productivity and the firm’s success in introducing new services to the market. The results unveil a fundamental service productivity-service innovation dilemma: Being productive in existing services increases a firm’s willingness to innovate new services proactively but decreases the firm’s capabilities of bringing these services to the market successfully. We provide specific insights into the mechanism underlying the complex relationship between a firm’s productivity in existing services, its innovation proactivity, and its service innovation success. For managers, we not only unpack and elucidate this dilemma but also demonstrate that a focused customer scope and growth market conditions may enable firms to mitigate the dilemma and successfully pursue service productivity and service innovation simultaneously.

Implement Service Innovation Through STOF Model Towards Green Economy in Automotive Industry

This paper aims to discuss the relationship between service innovation and green economy in the automotive industry. In Malaysia, the automotive industry is known to be one of the industries that contribute significantly towards green economic. The automotive industry is described as a fragmented process implementation requires involvement of varying combination of several departments across the supply chain spectrum and organizations. The green economy of Malaysia’s automotive industry is reported to be new in the industry for its improvement have inspired this study initiative. Appropriate process adopted by managers are capable in bringing resources and reducing the adversarial relationships among divisions for greater performance. The purpose of this study is to unveil the extent of new business model namely STOF on the performance of green economy automotive industry. In the streams of existent service innovation, a universal overview of the literature will be discovered in this study. In this fast-emergent arena, one of the most crucial components of the automotive industry is service innovation. The success of green economy depends on the success of service innovation to the companies and mediating effect of core competencies in relationship between STOF Model and green economy. The core competencies would be mediating effect for measuring factor of (service, technology, organization and finance) towards green economy where the factor is crucial point in participation along with the service innovation management. Thus, this study is relevant to academia and manager level for further research towards improving service innovation management and enhance green economy in automotive industry.

Strategies and service innovations of haitao business in the Chinese market

Purpose Chinese consumers’ cross-border internet shopping, so called “haitao” is an emerging popular trend in China. Haitao can be understood as service innovation process because it creates new market spaces and provides differentiated values for Chinese customers. Design/methodology/approach This study aims to explore the service innovation strategies and success factors of haitao business in the Chinese market. The authors selected two successful haitao sites of Amazon.cn and Gmarket.co.kr, as representatives of a global player and a niche player, and conducted a comparative case study to analyze their service innovation strategies and key success factors. Findings This comparative case analysis based on value chain framework revealed some common success factors such as trust, advanced system and alliances as well as their service innovation efforts. Amazon has advantages such as efficient logistics system and global sourcing, whereas Gmarket has advantages such as product category, sales promotions, and payment system. Originality/value This study provides some implications for managers with localization, alliances and platform strategies.

Online Review Site Data in Service Innovation

The increased emphasis of customer understanding and involvement in successful service innovation has resulted to the development of various co-creation approaches striving for tight coupling between customers and companies. While highly integrative methods certainly have their place, there is also a need for lighter means for gaining customer understanding amidst the organizational reality of limited budgets and time famine. Given this, the objective of the study is to examine ways of virtual customer integration, namely utilizing feedback customers give on public online review sites as a source of new ideas and inspiration for service innovation. This study brings new understanding on how firms can best leverage online review sites as a part of their customer integration tool portfolio to support their innovation activities.

The Effect of Frontline Employee Co-creation on Service Innovation: Comparison of Manufacturing and Service Industries

The involvement of frontline employees is critical to successful service innovation. Frontline employees often know what their customers need as well as what types of services their firms offer. Service deliver is highly dependent on the actions of frontline employees, who are the focus of the current research. However, the understanding on the influences of co-creation with frontline employees on service innovation performance is insufficient. Therefore, the research model based on service-dominant logic and empowerment perspective was developed to investigate the effect of co-creation with frontline employees on the performance of service innovation. The results drawn from a survey of 149 IT firms and 103 finance firms suggest the followings. First, the frontline employee co-creation by two-way communication can facilitate frontline employees’ sentiment (i.e., motivation, commitment and satisfaction) for the implementation of new services in both the IT and financial industries. Second, for the IT industry, the frontline employees’ sentiment positively affects the financial performance and non-financial performance, except for the links of motivation–financial performance and commitment–non-financial performance. For the financial industry, the frontline employees’ sentiment positively affects the financial performance and non-financial performance, except for the commitment–financial performance. Third, the effects of satisfaction on financial and non-financial performance are stronger in the IT industry than the financial industry. The links of motivation–financial performance and commitment–non-financial performance are stronger in the financial industry than the IT industry. Finally, we offer some managerial and research implications for service innovation and frontline employee co-creation.

Development of new technology-based services

ABSTRACTIn an environment where customers can hardly describe new technology-based services (TBSs) of the future and technological engineers are unlikely to understand how a new technology can work for new services, a guideline to generate ideas for TBS can be utilized to achieve successful service innovation. Thus, this paper aims to develop an ideation framework for TBS. Two methods – the technology tree and the function analysis systems technique – are employed to identify core utilities expected from a new technology. Then a new method, the service encounter value matrix, which is based on morphology analysis and is used for generating potential service ideas, is suggested. Finally, these ideas are evaluated, and only those that are of a high priority according to customers’ expectations of future society are selected. In this study, the framework is applied to telecommunication technology, which is timely and useful for designing future services.

Productization of knowledge-intensive services

Purpose– The purpose of this paper is to study the antecedents of service innovation success in the knowledge-intensive business services context, especially why the participation of frontline employees and multiple organizational units is not enough for succeeding in knowledge-intensive service productization.Design/methodology/approach– A multiple-case study of two polar cases with longitudinal data, participant observation, and key personnel interviews.Findings– Case evidence indicates that frontline employee participation and cross-unit collaboration are not sufficient antecedents for successful service productization. Instead, to facilitate employee knowledge sharing, managers need to align the project goals with the goals of participating employees, and promote trust among the project workgroup. Moreover, to enable effective cross-unit collaboration, managers need to facilitate the establishment of common vocabulary for productization work and services, and to resolve any emerging conflicts between participating organizational units.Practical implications– The findings indicate the importance of enabling knowledge sharing and cross-unit collaboration for service productization. The identified antecedents translate to practical strategies for achieving these. The results also highlight the importance of bottom-up service innovation, and the management of service innovation on the group level.Originality/value– The study indicates that common antecedents for successful service innovation may not be sufficient in the knowledge-intensive context, calling into question the assumptions about individual and group behavior in service innovation, and suggesting the importance of multi-level perspective on service innovation.

The role of openness in the fuzzy front-end of service innovation

The early stages of innovation involve high levels of uncertainty, leading to it being labelled as the “fuzzy-front end” (FFE). Although openness has been identified as pivotal to innovation performance in the open innovation literature, little effort has been put into exploring its role in the FFE. Specifically, this study examines ‘openness competence’ within the FFE–i.e., the ability of a FFE team to explore, gather and assimilate operant resources from external sources by means of external searches and inter-organisational partnerships. The aim is to investigate the impact of openness competence on front-end uncertainty reduction and service innovation success. Data were obtained from a survey of 122 IT-based service innovation projects implemented by IT service provider firms in Thailand. The results suggest that openness competence positively influences both the degree of uncertainty being reduced during the FFE and the overall success of service innovations. These findings offer several implications for research on open innovation and the FFE as well as encouragement to managers to apply a more open approach to the FFE of their service innovation projects.

서비스혁신 전략과 비즈니스 전략 간 연계와 정보기술 역량의 조절효과에 관한 연구

Service innovation is considered a new way to gain competitive advantage and enhance firm performance. However, service innovation does not always guarantee the desired outcome. The effective organization and management of well-planned service innovation practices, which are consistent with the firm's business environment, become a critical challenge for service innovation success. In addition, an increasing number of studies have focused on the role of information technology (IT) capability in service innovations. Most studies on service innovation have focused on the influences of the strategic alignment and IT capability separately. In contrast, the current study combines them by investigating the positive moderating effect of IT capability on the alignment between business strategy and service innovation strategy. Based on data collected from 183 service firms in Korea, we first explore the effect of service innovation strategies when coupled with different business strategies on better firm performance. We then investigate the moderating effect of IT capability on the relationship between strategic alignments and firm performance. Empirical evidence indicates that a synergistic effect between alignment and IT capability on firm performance exists. Firms that have aligned service innovation strategy with business strategy should consider improving their organizational IT capability to ensure substantial leverage.