Importance Of Service Innovation

Words: 896
Pages: 4
Open Document
In recent times, the services sector in global economies is experiencing unprecedented growth in both scale and speed of labour migration (Spohrer & Maglio, 2008). As a result, services now dominate most of the advanced economies in the world, with most countries recording more than 70% of their Gross Domestic Product (GDP) from services (Ostrom, Bitner et. al., 2010). Viewed as an apparent economic force, services are increasing even in historically manufacturing focused countries like India and China (Bitner & Brown, 2008). Statistics from a 2010 Reserve Bank of Australia report shows that, approximately 50% of India’s GDP emanate from the services sector. Similarly, more than 40% of China’s GDP is attributed to the services sector (Ostrom …show more content…
Gadrey, Galloui and Weinstein (1995) define service innovation as innovation in processes and innovation in organizations for existing service products. Service innovation can also be described as new developments in activities undertaken to deliver core service products for various reasons, e.g. to make those core service products more attractive to consumers (Oke, 2007). Service firms view innovation as a valuable asset that holds the potential to enable increase in firm performance and competitive advantage. In accordance with some earlier scholars, Victorino Verma, Plaschka, and Dev (2005) support this assertion and posit that in the services sector, the benefits of innovation is apparent as it enhances service differentiation and induces financial gains to firms. Considered as a strategic ingredient for firms simply wanting to remain competitive and improve performance, continuous innovation is seen by various scholars as very imperative (Darroch & McNaughton, 2002; Li & Atuahene-Gima, 2001). Most scholars have argued that innovation is paramount in a contemporary environment characterized by hyper-competition (D’Aveni, 1994; Otero-Neira et al., 2009; Grawe, et al., 2009), as such, strong and speedy competitive moves call for firms to constantly innovate to create new advantages (Dess & Picken, 2000). …show more content…
Anning Dorson (2016) supports this assertion and posits that in a highly competitive environment, it is rather high levels of service innovations and the alignment of environmental conditions to its implementation that yield maximum service firms’ performance. In recognition of such marketing challenge, marketing scholars and practitioners are increasingly acknowledging that, high levels of service innovations can be built through a range of behaviors conceptualized as customer engagement. Brodie et al. (2011) therefore conceptualizes the customer engagement concept as “a psychological state that occurs by virtue of interactive, co-creative customer experiences with a focal agent/object in focal service relationships”. Similarly, Hollebeek (2009) supports this conceptualization and posit that customer engagement has the potential to enhance customer loyalty and superior firms’ performance through a strong enduring psychological connection accompanied by interactive brand experiences beyond purchase. As mentioned by Sprott, Czellar and Spangenberg (2009), customer engagements with a service brand influences important aspects of consumer brand knowledge, brand perception, brand attitude, brand loyalty and hence increase service
Show More

Related Documents: Importance Of Service Innovation

Innovation Technology and managment Essay

Innovation and Technology Management SBL Assignment BA5 Lecturer: Dr Lawrence Akwetey & Anand Walser Student: Dzhenneta Saparova B0261SISI1111 19/06/13 Contents Executive summary 3 Introduction 4 The role of innovation in strategy 5 Innovation in organisation 6 Case study of Apple 7 Limitations on the role of innovation strategy 7 Value Chain 8 Conclusion 9 References 10…

Words 2186 - Pages 9

Business Innovation In China

Introduction Business innovation is an essential component that plays an important role in the growth and development of a country. Innovation can be in the form of the creation of new technological practices for improving the current product line or the creation of entirely new products. The economic performance of a country is also associated with the extent of business innovation. By integrating the resources, implementing change in the policies and procedures of the country, innovation can be effectively…

Words 2103 - Pages 9

Innovation and New Product Essay

Issues: Discuss the significance of innovation for the competitive position of the firm, why innovation is important for business organization? In what areas of the business might innovation be significant? The basic meaning of innovation is defined as exploiting new ideas leading to the creation of a new product, process or service. Also innovation allows managers to reallocate their limited resource and make a better arrangement between those resources; these will make the firms gain competitive…

Words 1245 - Pages 5

McKinsey Global Survey Results: Assessing Innovation Metrics Essay

Survey Results: Assessing innovation metrics Assessing innovation metrics A recent McKinsey Global Survey shows that companies are satisfied, overall, with their use of metrics to assess innovation portfolios—though many findings suggest that they shouldn’t be. The companies that get the highest returns from innovation do use metrics well; these organizations tend to assess innovation more comprehensively than the others. Even in the current economic turmoil, innovation remains a high strategic…

Words 2756 - Pages 12

social Life Essay

to put individual well-being at the heart of the Care Bill has the potential to be its most radical innovation. We believe that the well-being principle, if it is fully implemented as part of the legislation, can bring about a deep-seated change in community-based health and social care services and improve the lives of the people who use those services. The bill also emphasises the importance of prevention, which must be at the heart of any health and social care system which promotes well being…

Words 382 - Pages 2

The Importance Of Flexibility In An Organization

attracting new customers and providing services required by them. This problem can be handled by way of making a balance between change and continuity. Eppink (1978) has defined the relationship between environmental…

Words 2658 - Pages 11

Innovation Strategy at Microsoft Essay

Innovation Strategy at Microsoft: Clouds on the Horizon Microsoft Corporation is an American multinational software corporation that develops, manufacturers, licenses and supports a wide range of products and services related to computing. Microsoft is the world’s largest software maker and affects millions of users worldwide every day. The company recorded all-time high revenue bringing in $73.7 billion for fiscal year 2012. After analyzing this case, I have concluded that the main problem…

Words 1105 - Pages 5

Essay about Kodak: Digital Camera and Eastman Kodak

old-line Rochester (N.Y.) company had film and print all through its DNA. Yet by 2005, Kodak ranked No. 1 in the U.S. in digital camera sales. Its digital sales surged 40%, to $5.7 billion, even as its film-based businesses fell 18%. The key: product innovation, something Kodak knew how to do oh-so-well. The company designed one award-winning breakthrough after another to make digital photography nearly as simple as pointing and clicking. So why does Kodak Chief Executive Antonio M. Perez now dump on…

Words 489 - Pages 2

C I 2014 Assignment 3 Essay

MAN 0331M Creativity and Innovation 2014/5 - Semester 1 Assignment Deadline: 3pm, Monday, 15th December 2014 Assignment Background: The Oxford Dictionary describes creativity as an adjective “relating to or involving the use of the imagination or original ideas to create something.” Burns (2011, p111) explains that, “creativity is important in coming up with completely new ways of doing things, rather than looking for adaptive, incremental change.” He further sites Pankhurst who defines creativity…

Words 825 - Pages 4

Argument Essay Final

that big and small websites should be equally accessible, making the Net a neutral space. Net Neutrality promotes innovation and Americans’ right to free speech as it gives an equal platform for launching products and voicing opinions. Unfortunately, the right to access an unbiased and open Internet is under attack, all for the financial gain of large companies. Big-name Internet service providers (ISPs) such as Comcast and AT&T give higher priority to wealthier websites over small independent sites…

Words 1810 - Pages 8