Service Innovation Strategy: Enhancing Business Efficiency and Market Opportunities

1. Chapter 3 Service Innovation Strategy

2. Service Innovation Strategies • Service innovation strategy is considered an essential instrument assisting business owners for ultimate efficiency in connection to the striving condition of their businesses (Hall and Williams, 2008). • The aims of service innovation strategy possibly yield good results for the business by creating a better image over other competitors and by archiving quality and excellence in service of customers (Victorino, Verma, Plaschka, and Dev, 2005). • This strategy drives business advantage and efficiency in competition, as well as potentially opens greater market opportunity to assist the development of business (Neely and Hii, 1998)

3. Service Innovation Strategies • Definition: Service innovation strategies refer to the creation of better or effective business in relation to innovative ideas in service, leading to the reformation of new services for business. • Service innovation strategy has been aimed at emphasizing any processes and strategies reforming and enhancing business in terms of new services or patterns of service (Kupper, 2001). to respond to the need of customers and to develop business performance toward the goal (Burke and Denise, 2004). 

4. Managing the strategy • The first priority to consider is to be based on various forms of demand by customers so that the business could response and generate satisfaction. (Pynnonen, Paavo and Jukka, 2011). • To consider competitive intensity which has been in stimulating business innovation. (Andrew and Currie, 2008). 

5. Effects of service innovation service • Service innovation strategies effects its corporate image, service, competitive efficiency, and market opportunities. • Service innovation strategies affect business performance via business environment as moderating effects. • Service innovation strategy is affected by the perception of customer value and competitive intensity consciousness support. 

6. Elements of Service Innovation Strategies • Creative service idea • Attitude toward change • Generative learning

7. Creative Service Idea • Definition: Creative service idea refers to the presenting of ideas and new development relating to creative thinking and re-thinking by designing new perspectives essential to control a business operation (Martin, 2010) • If business has an opportunity and the ability to creating new values, it is possible that good corporate image, competitive efficiency and market opportunity to a global competition are possible (Wirtz and Ehret, 2009; Walsh, 2011).

8. Attitude toward change • Definition: Attitude toward change is the changing of ideas, business operation and the preparation of corporate change (Hurley and Hult, 1998). • If a business tends to think out of the box and is determined to prepare and stimulate its employees toward change (Cangemi and Miller, 2007) that could be a good opportunity to develop service excellence and uniqueness to distinguish itself from its rivals in the future (Augusto and Coelho, 2009).

9. Generative learning • Definition: Generative learning is the process of the development of thinking skills and new operations to maximize corporate benefit. • Yang (2007) indicated that the learning in service business is able to succeed via knowledge sharing. • Sungsoo (2005) found that business strategyies in support of the business could increase service quality by knowledge sharing in different perspectives between the operator and the employees in a business.

10. Corporate image • Definition: Corporate image is a set of images in the mind of customers who receive service; also can be decribed as the impression of the service perceived. • The development of a corporate image requires creativity (Finsterwalder and Tuzovic, 2010). • The corporate image is important to business and customers, providing new services and distributing the service logo to the public to strengthen corporate credibility (Pina, Martinez, Chernatony and Drury, 2006). • The corporate image is related to the financial operations, as well as to popularity among customers and others in society. • It can be said that it has a direct impact towards business operation (Neville, Bell and Bulent, 2005).

11. Service Excellence • Definition: Service excellence is the creation of quality service under the service standard and worthiness. • The creation of so many services for customers is based on providing them effective services to create their future demand for services. • An important factor for business from a customer’s perspective is the quality of the service which the operator provided and the impression that the customer has of the service. (Home, 2005). • Excellenct service for customers is to create good services so that they are impressed (Eliza, 2005), including an incentive for customers to continue their patronage . • If a business emphasizes the creation and promotion among its officers to maintain and improve their services, it is effective in improving the service and excellent in the future (Antonacopoulou and Kandampully, 2000).

12. Competitive Efficiency • Definition: Competitive efficiency is the capacity in introducing new services into the market competition and the ability to respond to customer demand with competitive advantage over competitors and the efficient use of fundamental business resources (Spanos and Lioukas, 2001). • If a business needs to gain a market advantage over competitors, it has to be aware of the changing environment and searching for techniques to create a corporate change (Schermerhorn, Hunt and Osborn, 2005). • Basic factors in generating competitive efficiency and business advantage include knowledge which requires continuous learning and creativity as a means toward a creation of innovation. • Competitive efficiency and business advantage have a direct impact on business operations. (Pertusa-Ortega, Molina-Azorin and Claver-Cortes, 2010).

13.  Market Opportunity •  Gaddefors (2005) found that market opportunity is based on corporate image and the development of innovation. • Effects of the creation of service innovation creates market opportunities and covers creative thinking in business operations on how to promote the understanding of values that the business creates to customers along with responding to customer behavior.

14. Modern Leader Competency • Definition: Modern leader competency refers to self development and the development of staff capacity in order to apply in working operation toward the goal under a leader with the following characteristics; namely, being visionary, determined to success, having full leadership and creative in innovation, etc. • New leaders are expected to be visionary, prepared for change in a business world, such as rival strategy and customer demand along with other possible implications that might affect the business in order to plan and continue the operation effectively (Simpkins, 2009). 

15. Business Performance • Ooncharoen and Ussahawanitchakit (2009) who found that successful service with indicators based on business reputation in developing new services, creation of customer value, and sustaining a customer base along with the creation of attracting new customers. •  The success of business operation, in a financial perspective and in a corporate image, is based on the effect of corporate image, service, competitive competency and market opportunities for business.

16. Business Environment • Business Environment is defined as external factors influencing business operation which results in both positive and negative effects in the business's current and future operation, such as economic and competitive environment and the changing of customer behavior, etc. • The changing of business environment creates strong and weak points, opportunity and obstacle to corporate operation (Lawrence and Weber, 2008). 

17. Perception of Customer Value • Perception of customer value refers to a consideration of various customer demands in order to assist business capacity in searching for appropriate new strategies to respond to the need and satisfaction of customers. 

18. Competitive Intensity Consciousness • Competitive intensity consciousness refers to a consideration of importance in terms of business competitive environment; such as the amount of competitors, their business strategy, opportunity of new competitor's emergence and the rate of business growth. • Andrew and Currie (2008) found that competitive intensity stimulates business innovation and supports the development capacity of business production. 

19. The service innovation strategies can be implemented though 4 categories (Enz,2012) • Intervention and benchmarking with other organizations • Participation, involvement and empower in the change process • Persuasion, activities from internal and external experts to sell the ideas • Senior executives assign tasks to staff

20. Example: the Spa business • Spa businesses can suffer from an economic downturn, too much competition or a crisis in tourism. •  The search of a service innovation strategy to enhance business performance to success. •  Service innovation strategies affect business performance. 

21. Conclusion •  Service innovation strategies (creative service idea, attitude toward change, generative learning) will have a positive effect on business performance.  • For example, spa businesses in Thailand can reach their business goals by understanding how a business incorporates a service innovation strategy in order to improve their business performance. (Nunta, Ooncharoen & Jadesadalug, 2012).