New service development: areas for exploitation and exploration
01 Apr 2002-Journal of Operations Management (No longer published by Elsevier)-Vol. 20, Iss: 2, pp 135-157
TL;DR: The management of new service development (NSD) has become an important competitive concern in many service industries as discussed by the authors, however, NSD remains among the least studied and understood topics in the service management literature.
About: This article is published in Journal of Operations Management.The article was published on 2002-04-01. It has received 688 citations till now. The article focuses on the topics: Service system & New product development.
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30 Aug 2019
TL;DR: In this paper, a meta-analysis of the literature on service innovation, defined as the introduction of new or enhanced offerings that increase customer value, showed two consistent themes despite the significant heterogeneity of findings across studies.
Abstract: Meta-analyses of the literature on service innovation, defined as the introduction of new or enhanced offerings that increase customer value
(Ordanini & Parasuraman 2011; Dotzel, Shankar, & Berry 2013), show
two consistent themes despite the significant heterogeneity of findings
across studies (Saeed et al. 2015; Storey et al. 2016). First, there is
compelling evidence that service innovation, just like product innovation, contributes to firm performance (Saeed et al. 2015; Calantone,
Harmancioglu, & Droge 2010; Rubera & Kirca 2012). Second, unlike for product innovation, frontline involvement is among the “top-10” antecedents of commercial success from service innovation and customer involvement is critical for gaining competitive advantage from service innovation (Storey et al. 2016). In a meta-analysis of 232 studies, Saeed etal. (2015) distinguished between two meta-orientations that differentially influence a firm’s capabilities for innovation—an inside-out orientation that engages strategic firm-specific resources, and outside-in orientation that engages external market- and customers-specific resources. Referring to these alternate orientations, Storey et al. (2016, p. 541) concluded that “product firms succeed by creating knowledge internally (inside-out), whereas service firms succeed more often by utilizing external knowledge and capabilities (outside-in).”
2 citations
31 Jan 2012
TL;DR: In this paper, the authors investigated the organizational effects of servitization in the Brazilian publishing industry, specifically the textbook publishing segment, focusing on publishers who create, produce and market the books, as well as their relationship with one of their major clients.
Abstract: In a marketplace with growing competition, it is mandatory that companies do more for their clients, i.e. that they ultimately deliver more value. For manufacturers in particular, one of the most common actions is the integration of services to the existing products, in order to offer a solution that meets customer needs. Servitization, a term coined to describe this business model, demands an organizational transition, given that providing services is different from manufacturing tangible goods. Despite the arguments for servitization, it is not always successful. The research investigated the organizational effects of servitization in the Brazilian publishing industry, specifically the textbook publishing segment. The focus was on publishers who create, produce and market the books, as well as their relationship with one of their major clients: the private Primary and Secondary Education Schools. Usually seen as manufacturers of a tangible good – the textbook – and historically structured according to the taylorist tradition, these publishers have reformed themselves towards an organization focused on the creation of didactic content and the provision of services to schools and instructors. The present research aimed to describe and explain how organizational changes occurred, due to servitization. A multiple case study was carried out, and empirical evidence was gathered, including the problems and successes on that matter. Results showed evidence of organizational changes due to servitization. Major examples include the introduction of new organizational structures and new human resources policies that enabled a closer relationship with customers and their needs. However there is still work to do, such as facing the challenges of growing digitalization of didactic content, as well as the use of Internet for content distribution and as a means of relationship with customers.
2 citations
TL;DR: In this paper, the authors conducted a study to survey new service development and factors affecting its financial performance in banking industry and found that cross-functional teams and learning orientation have positive impact on the new service marketability.
Abstract: New service development is increasingly becoming one of the most important aspects of business strategy in both service and non-service industries. In todays economical world where has become more service oriented, it can be said that the new service development (NSD) is one of the most important components of growth in dynamic environments. As new proposals lead to an increase in income, profit and develop in market share. The aim of the study was to survey new service development and factors affecting its financial performance in banking industry. In terms of research philosophy this is a demonstrative, in terms of research purpose and direction it’s a practical and descriptive, and in terms of research implementation strategy it’s a survey research that has been executed in cross-sectional time period. The purpose of the research sampling was to examine the new services, which are provided in the various banks. Stratified probability sampling method used is based on 150 questionnaires in headquarters and branches of different banks, which are located in Tehran city, and 118 questionnaires were gathered. Data obtained from the questionnaires were analyzed in both descriptive and inferential level by using SPSS version 21 and Lisrel 8.8 Windows version. Structural equation modeling techniques (confirmatory factor analysis and structural analysis) have been used to test the research hypotheses. Results of the research showed that cross-functional teams and learning orientation have positive impact on the new service marketability. And indirectly have a positive impact on the financial performance of new service. Customer involvement and learning orientation have positive impact on the new service launch preparation, but the effect of new service launch preparation on new service financial performance has not been proved in the current study.
2 citations
Additional excerpts
...[1] Menor, Larry J....
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01 Jan 2011
TL;DR: In this article, the adaptation construct for SCFS designs is defined and discussed in the joint framework of qiyas and theory of deferred action, which is a design adaptability theory drawing in complexity.
Abstract: Asymmetry of information in financial service creates excessive uncertainty termed gharar, which makes a financial transaction invalid (haram) in Islamic Law (Shariah). Information systems customised to shariah compliant financial service (SCFS) can make information flow more symmetric and can in turn reduce gharar. Based on information related to emergent SCFS design stakeholders i.e. financial regulators, bankers and customers make adaptation and migration decisions. However, unique nature of SCFS design requires adaptation (migration) of emergent SCFS in compliance to shariah. We discuss general service and SCFS literatures to define structural constructs of SCFS. We then discuss qiyas, which is the juridical principle of defining emergence for expansion in shariah rulings, and theory of deferred action, which is a design adaptability theory drawing in complexity. The adaptation construct for SCFS designs is defined and discussed in the joint framework of qiyas and theory of deferred action.
2 citations
Posted Content•
TL;DR: In this paper, the authors explored the relationship between service innovation and customer satisfaction and found that service innovation affects customer satisfaction when customers were satisfied in relation to their expectations being met or surpassed, and recommended that service providing firms should innovate so as to meet customers' expectations and if possible surpassed them.
Abstract: The objective of this study was to gain an insight into service innovation dimensions that affect customer’s satisfaction in the service industry.  Some service innovation dimensions were selected to be tested in First Registrars operations and its relationship with customers in order to explore the relationship between service innovation and customer satisfaction. Findings showed that service innovation affects customer’s satisfaction when customers were satisfied in relation to their expectations being met or surpassed. Finally, recommendations were made. Topmost among the recommendations was that service providing firms should innovate so as to meet customers’ expectations and if possible surpassed them.
2 citations
References
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TL;DR: In this paper, the authors consider the relation between the exploration of new possibilities and the exploitation of old certainties in organizational learning and examine some complications in allocating resources between the two, particularly those introduced by the distribution of costs and benefits across time and space.
Abstract: This paper considers the relation between the exploration of new possibilities and the exploitation of old certainties in organizational learning. It examines some complications in allocating resources between the two, particularly those introduced by the distribution of costs and benefits across time and space, and the effects of ecological interaction. Two general situations involving the development and use of knowledge in organizations are modeled. The first is the case of mutual learning between members of an organization and an organizational code. The second is the case of learning and competitive advantage in competition for primacy. The paper develops an argument that adaptive processes, by refining exploitation more rapidly than exploration, are likely to become effective in the short run but self-destructive in the long run. The possibility that certain common organizational practices ameliorate that tendency is assessed.
16,377 citations
6,797 citations
TL;DR: In this paper, the authors organize the product development literature into three streams of research: product development as rational plan, communication web, and disciplined problem solving, and synthesize research findings into a model of factors affecting the success of product development.
Abstract: The literature on product development continues to grow. This research is varied and vibrant, yet large and fragmented. In this article we first organize the burgeoning product-development literature into three streams of research: product development as rational plan, communication web, and disciplined problem solving. Second, we synthesize research findings into a model of factors affecting the success of product development. This model highlights the distinction between process performance and product effectiveness and the importance of agents, including team members, project leaders, senior management, customers, and suppliers, whose behavior affects these outcomes. Third, we indicate potential paths for future research based on the concepts and links that are missing or not well defined in the model.
3,824 citations
"New service development: areas for ..." refers background in this paper
...…that a common set of factors—development process, market/environment, organizational and strategic—impact NPD performance (Schilling and Hill, 1998; Brown and Eisenhardt, 1995; Montoya-Weiss and Calantone, 1994) and NSD performance (de Brentani, 1995; Cooper et al., 1994; Cooper and de Brentani,…...
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...This challenge is particularly difficult given the diverse literature reporting NPD research (see Krishnan and Ulrich, 2001; Wind and Mahajan, 1997; Brown and Eisenhardt, 1995)....
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...The extant NPD research does not have all the answers to the questions of product or service development, but there is a foundation that can be drawn on (see integrative reviews by Krishnan and Ulrich, 2001; Schilling and Hill, 1998; Wind and Mahajan, 1997; Brown and Eisenhardt, 1995)....
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...Underlying the empirical work addressing the antecedents of development performance is the belief that a common set of factors—development process, market/environment, organizational and strategic—impact NPD performance (Schilling and Hill, 1998; Brown and Eisenhardt, 1995; Montoya-Weiss and Calantone, 1994) and NSD performance (de Brentani, 1995; Cooper et al....
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Journal Article•
TL;DR: Porter as discussed by the authors argues that the Internet is not disruptive to most existing industries and established companies and, contrary to recent thought, the Internet itself will be neutralized as a source of advantage.
Abstract: Many of the pioneers of Internet business, both dot-coms and established companies, have competed in ways that violate nearly every precept of good strategy. Rather than focus on profits, they have chased customers indiscriminately through discounting, channel incentives, and advertising. Rather than concentrate on delivering value that earns an attractive price from customers, they have pursued indirect revenues such as advertising and click-through fees. Rather than make trade-offs, they have rushed to offer every conceivable product or service. It did not have to be this way--and it does not have to be in the future. When it comes to reinforcing a distinctive strategy, Michael Porter argues, the Internet provides a better technological platform than previous generations of IT. Gaining competitive advantage does not require a radically new approach to business; it requires building on the proven principles of effective strategy. Porter argues that, contrary to recent thought, the Internet is not disruptive to most existing industries and established companies. It rarely nullifies important sources of competitive advantage in an industry; it often makes them even more valuable. And as all companies embrace Internet technology, the Internet itself will be neutralized as a source of advantage. Robust competitive advantages will arise instead from traditional strengths such as unique products, proprietary content, and distinctive physical activities. Internet technology may be able to fortify those advantages, but it is unlikely to supplant them. Porter debunks such Internet myths as first-mover advantage, the power of virtual companies, and the multiplying rewards of network effects. He disentangles the distorted signals from the marketplace, explains why the Internet complements rather than cannibalizes existing ways of doing business, and outlines strategic imperatives for dot-coms and traditional companies.
3,558 citations
"New service development: areas for ..." refers background in this paper
...The Internet dramatically reduces these barriers, as summarized in Table 3 ( Porter, 2001 )....
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...A differentiation strategy is difficult to attain in a service environment where innovations are quickly and easily copied ( Porter, 2001 )....
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Book•
01 Jan 1986TL;DR: Innovation is defined as "the development and implementation of new ideas by people who over time engage in transactions with others within an institutional order" as mentioned in this paper, where the authors focus on four basic factors new ideas, people, transactions, and institutional context.
Abstract: Innovation is defined as the development and implementation of new ideas by people who over time engage in transactions with others within an institutional order. This definition focuses on four basic factors new ideas, people, transactions, and institutional context. An understanding of how these factors are related leads to four basic problems confronting most general managers: 1 a human problem of managing attention, 2 a process problem in managing new ideas into good currency, 3 a structural problem of managing part-whole relationships, and 4 a strategic problem of institutional leadership. This paper discusses these four basic problems and concludes by suggesting how they fit together into an overall framework to guide longitudinal study of the management of innovation.
3,513 citations
"New service development: areas for ..." refers background in this paper
...Focusing on NPD, Van de Ven (1986) notes four problems related to the management of development and innovation efforts....
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...Focusing on NPD, Van de Ven (1986) notes four problems related to the management of development and innovation efforts....
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