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New service development: areas for exploitation and exploration
Abstract
The management of new service development (NSD) has become an important competitive concern in many service industries. However, NSD remains among the least studied and understood topics in the service management literature. As a result, our current understanding of the critical resources and activities to develop new services is inadequate given NSD’s importance as a service competitiveness driver. Until recently, the generally accepted principle behind NSD was that “new services happen” rather than occurring through formal development processes. Recent efforts to address this debate have been inconclusive. Thus, additional research is needed to validate or discredit the belief that new services happen as a result of intuition, flair, and luck. Relying upon the general distinctions between research exploitation and exploration, this paper describes areas in NSD research that deserve further leveraging and refinement (i.e. exploitation) and identifies areas requiring discovery or new study (i.e. exploration). We discuss the critical substantive and research design issues facing NSD scholars such as defining new services, choice in focusing on the NSD process or performance (or both), and specification of unit of analysis. We also examine what can be exploited from the study of new product development to further understanding of NSD. Finally, we explore one important area for future NSD research exploration: the impact of the Internet on the design and development of services. We offer research opportunities and research challenges in the study of NSD throughout the paper.
... Oduyoye, Binuyo, and Sanda, 2013a; Rogers, 2003 assert that advances in ICTs were pivotal to the recent social and economic transformation in both the industrialized and developing countries. Oduyoye, Binuyo, and Sanda, 2013bemphasized that the diffusion and implementation of ICTs is crucial to the development of productivity and hence competitiveness, with many services more or less directly linked to the performance of the manufacturing sector.According to Menor, Mohan and Scott (2002), the viability of many manufacturing concerns is highly dependent on effective application of ICTs.Noor, Kamardin and Ahmi (2017) contended that managers cannot ignore ICTs because they play a critical role in contemporary organisations. ICTs affect how managers decide, how they plan and what products and services are produced. ...
Against the backdrop of dwindling performance of manufacturing firms as evident in the retrenchment and folding up of many firms in Nigeria lately, The Manufacturing Association of Nigeria for example reported that in 2009, a total of 834 firms closed shop across the country out of which 214 were from Lagos State. This study was consequently undertaken to investigate the effect of Adoption of Information and Communication Technology solutions on the Performance of Manufacturing firms in Lagos State. The objectives of the study are to: identify the benefits of ICT adoption to manufacturing firms in Lagos State, identify the types of ICT solutions being employed by manufacturing firms in Lagos State and also to determine the effect of ICT adoption on Performance of Manufacturing firms in Lagos State. The study made use of primary data. 528 questionnaires were administered to the forty-four firms sampled for the studyout of which 494 were returned representing 94% response rate.The study found out that a strong relationship exists between the five explanatory variables (types of ICT solutions, need for ICT solutions, investment on ICT Solutions, effectiveness of use of ICT solutions, and benefits of ICT solutions.) and the dependent variable (Performance of Manufacturing Firms). This is evident from the value of the respective coefficients of the explanatory variable obtained from the estimated model which are as follows: Types of ICT Solutions (1.024), Need for ICT Solutions (1.071), Investment on ICT Solutions (0.821), Effective Use of ICT Solutions (1.511), and Benefits of ICT Solutions (0.636). According to the model, the Coefficient of Determination (R 2) explained about 87.9% of the variations in the performance of manufacturing firms.The study concludes that ICT solutions have significant potential to considerably boost the performance of manufacturing firms when optimally utilized. Thus, managers of manufacturing firms should implement strategies to exploit its benefits to the fullest in the interest of improved organization performance.
A patent system requires novelty and progressiveness so that new patents do not infringe on the rights of prior art. Patent investigation including a prior art search is essential to the process of commercialization of technology. In general, patent investigation has been conducted by experts based on their qualitative judgement. However, the number of patents has increased so fast that it has become difficult to handle the quantitative burdens of the search with a conventional approach. There have been previous studies dealing with patent investigation to find similar technologies. They had limitations as they did not utilize the citation relationship and similarity between patents in a comprehensive way. In addition, they could not properly reflect the sequential citation relationship of patents though this is effective in discovering similar patents. In this study, we propose an efficient methodology to discover similar technologies by comprehensively considering the similarity and citation relationship between patents. In particular, we intended to reflect the citation sequence and indirect citation relationship in the process of searching for similar patents. For this, we introduced the concept of “patents with indirect connections” (PICs) and devised an algorithm to efficiently detect patent pairs having such a relationship. The proposed methodology of this study contributes to preventing patent litigation in advance by discovering patents with such potential risks. It is expected that this method will provide patent applicants with the opportunity to establish appropriate strategies against competitors with similar technologies. In order to examine the practical applicability of the proposed method, Korean patents related to machine learning and deep learning were collected. As a result of the experiment, it was possible to identify 24 pairs of similar patents without a direct citation relationship and derive appropriate counter strategies.
Currently, the most important factor which is receiving more attention is the requirements uncertainty in software projects development. Requirements uncertainty during the development of software project is identified as the most significant threat, and managing it is essential to achieve the successful completion of software projects. Requirements uncertainties have huge impact on budget, time and quality of the finished product. Several projects have either failed or challenged due to requirement uncertainty. Due to uncertainty in the requirements, it is very difficult to estimate the cost, schedule, efforts and its development approach in the early stages of software development process. This, in turn, will directly affect the development process. This may happen to be a strong reason for software project failure. Thus, uncertain requirements must be managed.
The objective of this paper is to identify the relationships between uncertain requirements and other important parameters. Furthermore, the impact relationship between uncertain requirements and other parameters are established and validated. A conceptual research model is developed for relationship establishment as well as validated by an experimental study focused on a framework through online questionnaire survey. Responses are collected mostly from the Indian IT companies. The study results show a positive and significant relationship among requirements uncertainty and other important parameters. This research paper reveals the need of uncertainty analysis in the development process of software projects in order to recognize the role of uncertainty in software development process.
Living labs provide a new, under researched form of open innovation. Although open innovation is increasingly popular in service development, extant literature lacks knowledge of different open service innovation strategies, which companies can employ. This chapter focuses on strategies that firms can take in co-creating service innovations through living labs. The authors found nine open service innovation strategies based on an analysis of 26 living labs in four countries. Understanding of strategies and their links with incremental or radical innovation outcomes aid managers to set up an efficient innovation management. Knowledge of various strategies helps companies to succeed in service development and innovation novelty assessment based on the characteristics of the living lab.
Exchanging and analyzing ideas across different software tools and repositories is needed to implement the concepts of open innovation and holistic innovation management. However, a precise and formal definition for the concept of an idea is hard to obtain. In this paper, the authors introduce an ontology to represent ideas. This ontology provides a common language to foster interoperability between tools and to support the idea life cycle. Through the use of an ontology, additional benefits like semantic reasoning and automatic analysis become available. Our proposed ontology captures both a core idea concept that covers the ‘heart of the idea’ and further concepts to support collaborative idea development, including rating, discussing, tagging, and grouping ideas. This modular approach allows the idea ontology to be complemented by additional concepts like customized evaluation methods. The authors present a case study that demonstrates how the ontology can be used to achieve interoperability between innovation tools and to answer questions relevant for innovation managers that demonstrate the advantages of semantic reasoning.
Purpose
This paper investigates the paths through which innovation community affects content providers' new service development (NSD) performance in technology-based service ecosystem and contingency factors exist in the paths.
Design/methodology/approach
The research model is built based on service-dominant (S-D) logic, exploring the relationship among innovation community, content providers' knowledge acquisition and content providers' NSD performance as well as the moderating role of content providers' technology readiness and content providers' complexity. Using survey data collected from 386 content providers of selected open network platforms in China, this study finds broad support for the proposed research model.
Findings
The findings of this paper reveal that content providers' tacit knowledge acquisition from users plays a mediating role between the innovation community and new service ratings. Content providers' technology readiness plays a positive moderating role in the relationship between innovation community and their explicit or tacit knowledge acquisition. Content providers' task complexity negatively moderates the effects of their explicit knowledge acquisition from users on new service volumes or ratings, but positively moderates the effects of tacit knowledge acquisition from users on new service volumes or ratings.
Originality/value
Though extant literature highlights the importance of knowledge acquisition in NSD performance, few studies explore the antecedents of content providers' knowledge acquisition from users and the paths through which these antecedents affect content providers' NSD performance. Moreover, boundary conditions exist in the process of improving NSD performance are generally ignored in previous literature. With the lens of S-D logic, this paper explicates how content providers of different technology readiness and different task complexity enhance their new service volumes and ratings through acquiring explicit and tacit knowledge from users in innovation community. Adopting S-D logic from marketing area to NSD area, this paper not only enriches the theoretical accumulations of antecedents and boundary conditions of content providers' NSD performance but also offers insights for content providers and users on how to synergistically advance NSD activities and co-create value in the technology-based service ecosystem.
Industry 4.0 is changing companies’ business by introducing new manufacturing techniques. Personalization is one key goal of Industry 4.0 that is transforming companies’ business models by bringing the customer’s preference in the production process. Companies require to adapt their business model to these disrupting manufacturing approach. In this paper, we present a management tool for guiding the business model innovation towards personalized products: The personalized product business model radar template. This template implements a pattern that guides the business model design process by introducing predetermined values that are common in the personalized product business model in Industry 4.0. We apply this management tool in a business case scenario in a workshop setting with professionals from smart manufacturing.
Biotechnology and pharmaceutical firms invest billions of dollars in R&D, primarily in new drug discovery. Nonetheless, the industry is facing declining returns on R&D investments. Failure to discontinue less‐promising new drug discovery projects is a key driver of this decreased productivity. Hence, firms are scrambling to restructure the new drug discovery process to improve decision‐making and to limit the attrition rate to the early stages of drug discovery. Drawing on insights from the exploration‐exploitation literature, our study addresses this timing problem by using a formal model and empirically testing its implications on how the time to discontinuation of new drug discovery projects are impacted by project‐ and firm‐specific characteristics, so that a firm’s resources can be promptly redeployed to more fruitful endeavors. Our findings, based on an analysis of 1,274 early‐stage drug discovery projects worldwide, suggest that the time to discontinuation of early‐stage drug discovery projects requires careful consideration of these project‐ and firm‐specific characteristics. These findings hold important implications for the industry, which is undergoing tremendous stress and transformation. The results also contribute to the exploration‐exploitation literature by modeling and testing the time‐allocation decision between exploratory and exploitative activities.
Utilising absorptive capacity theory, this study examines whether organisations should outsource knowledge acquisition of employees, i.e.,, by hiring employees with prevailing relevant knowledge, or whether to invest in the development of employees’ knowledge within the organisation for different types of innovations. Three hundred and thirty-five Danish firms in the European Manufacturing Survey reveal that individual knowledge must be differently organised to achieve different innovative outcomes. For new product development, organisations benefit from investing in employees with the highest possible domain-specific absorptive capacity, whilst for product-related service innovations, employees with more general knowledge should be hired. For the latter, employees’ individual absorptive capacity should be developed internally for best innovation outcomes. Irrespective of the type of innovation, providing flexible work arrangements is beneficial for performance and this effect is further substantiated by firm’s cross-functional capabilities. Important implications emerge for the organisation in terms of outsourcing versus developing individual absorptive capacity for different innovations.
This study sought to develop a conceptual model of innovative tourism product development, because the existing models tend to provide an incomplete framework for these products' development. The models presented to date focus on either the resources needed, the tourism experiences to be provided, or development processes. These models also tend to see the overall process as linear. The proposed model gives particular importance to the development process's design, as well as stressing a dynamic, nonlinear approach. Based on the new services or products' concept, project managers identify tourism destinations' core resources, select the stakeholders, and design transformative tourism experiences. This framework can be applied to innovative tourism products or re-evaluations of existing products in order to maintain tourism destinations' competitiveness. Thus, the model is applicable to both destination management companies and the private tourism sector.
The purpose of this paper is to build a triad collaborative service innovation model, examining the effects of an employer's customer orientation, employee adaptability and customer participation on service innovation in a changing world through the knowledge of customers' needs. This study uses data from both frontline employees and their customers. A total of 300 valid matching data records were obtained. Confirmatory factor analysis (CFA) and structural equation modeling (SEM) were used to analyze the data and to estimate the proposed research model. This study finds that an employer's customer orientation, an employee's adaptability and a customer's participation positively influence customer need knowledge, which in turn enhances service innovation. Accepting the model contributes to the literature by providing new evidence that both employees and employers should realize the importance of customer needs and by showing the effect of customer need knowledge on service innovation.
To perfect a service, service providers must understand the fundamental emotional effects that a service may invoke. Kansei Engineering (KE) has been recently adapted to service industries to realize the relationships between service design elements and customer emotional perceptions. However, effective service design based on KE is still seriously challenged by the uncertainty and behavioral biases of customers’ emotions. This article tries to propose an uncertain KE methodology for behavioral service design. To do so, an integrative framework is first proposed by linking design attributes, emotional needs, and overall satisfaction, so as to design services best satisfying customers’ emotional needs. Second, multinomial logistic regression is used to build the uncertain relationships between design attributes and emotional attributes. Third, a quantitative Kano model is proposed to model the asymmetric and nonlinear satisfaction functions reflecting the “gains and losses” effect of positive emotions and negative emotions. Next, the Prospect Theory is used to derive customer overall satisfaction by distinguishing the “gains and losses”. Finally, the proposed methodology is applied to a case study of the campus express delivery service in China. An independent tracking study shows that the results are consistent with service acceptance and provide valuable insights.
Purpose
The purpose of this study was to examine how firms' corporate social responsibility (CSR) strategies affect their innovation performance via two mediating variables, employee involvement and supplier collaboration, and compare how this mechanism works in the service and manufacturing industries.
Design/methodology/approach
The conceptual model was built on stakeholder theory, the resource-based view (RBV) and service-dominant logic (SDL). Based on survey data from 686 service firms and 1,646 manufacturing firms, the hypothesized relationships were tested using structural equation modeling (SEM).
Findings
The empirical results showed that CSR positively affected service innovation and product innovation in service firms and manufacturing firms, respectively, and that these effects were positively mediated by employee involvement and supplier collaboration. However, compared with manufacturing firms, the effect of CSR on innovation performance was greater for service firms. Supplier collaboration and employee involvement also played a stronger role in service firms when mediating the relationship between CSR and innovation performance.
Originality/value
By analyzing and validating the direct and indirect effects of CSR on innovation performance in both the service and manufacturing industries, this study addressed the strategic benefit of CSR and extended research focused on the financial benefits of CSR. Therefore, its findings contribute to our understanding of sustainability and innovation issues. From a theoretical perspective, this study extended the RBV, SDL and stakeholder theory to the context of the CSR-innovation relationship, and showed that firms could align CSR and innovation initiatives to achieve strategic synergy. It also revealed the similarities and differences between service and manufacturing firms regarding the mechanism through which CSR affects innovation.
New product development (NPD) collaborations with external partners involve high coordination costs and run substantial risks. Formalization seems to be an effective mechanism to mitigate said costs and risks, although the issue of whether formalization actually proves productive or counterproductive remains an open question. This study empirically analyses the direct impact of formalization and the interaction effect between formalization and trust between partners in order to gauge their influence on NPD collaboration performance. Findings indicate that formalization directly boosts the quality and novelty of the new product developed in collaboration, but that it does not affect adherence to schedule. In addition, trust reinforces the productive effect of formalization on new product quality and novelty, and makes the impact of formalization on adherence to schedule positive. However, without trust, we find a null impact of formalization on new product quality and a counterproductive impact on adherence to schedule. These results suggest that formalization and trust may complement each other, reinforcing each other’s positive effect on new product quality and novelty and presenting a positive synergistic effect, while helping to overcome the counterproductive effect of formalization on adherence to schedule.
JEL CLASSIFICATION: O32
Purpose
This study aims to shed lights on the dynamics of involving and sharing knowledge with stakeholders in the process of new service development (NSD) over time.
Design/methodology/approach
The paper is based on a paradigmatic case focused on the development of the digital MBA program by the School of Management of Politecnico di Milano. Primary and secondary data have been largely collected and analyzed, involving multiple stakeholders of the development process.
Findings
This study describes how several stakeholders have been involved during the phase of the NSD process, showing two variables that ruled their involvement: the level of control exerted by the School on the stakeholders and the level of flexibility of the stakeholders.
Research limitations/implications
This research offers insights to the understanding of the dynamics of involving and sharing knowledge with multiple-stakeholders in NSD. From a theoretical perspective, it contributes to stakeholder theory linking it with the service management literature, highlighting the role of cyclical fluctuations in the involvement activities.
Practical implications
This research offers insights to managers dealing with the development of new services, offering them a novel view on how various stakeholders may be involved over time, in different moment and in different ways, to properly enhance the development process thanks to their knowledge sharing.
Originality/value
This paper contributes to the service management literature emphasizing the role of multiple stakeholders while providing insights and suggestions to manage the complex relationships created by their involvement and their knowledge.
To cope with the fierce business competition and the increasing challenges brought with it, manufacturing companies have been demonstrating a growing interest in extending their service business. It is in this context that companies seek servitization strategies, i.e., developing the capabilities to add services to their traditional product offerings, to increase value to the customers and to differentiate themselves from the competition. However, companies pursuing a servitization strategy often lack methods and tools to design new services adapted to their context. Thus, this article seeks to cover this gap through the development of a new service design method, the (S)ervice (D)esign method for (C)ompanies undergoing a (S)ervitization process: SDCS. The development of this method followed Design Science Research (DSR) methodology. This article also presents the application of the SDCS method in a company undergoing a servitization process.
Purpose
Many service firms have adopted creativity reinforcement mechanisms to manage employee-based service creativity so as to pursue their performance growth. However, its impact on firm performance has rarely been investigated in the extant research. The purpose of this paper is to satisfy this knowledge gap through an examination of how service creativity reinforcement (SCR) affects a firm’s performance.
Design/methodology/approach
Two samples were used to test the hypotheses. The first sample included a total of 4,381 service firms and was analyzed by using a traditional moderated regression method in relation to sales growth as the outcome variable. Due to a number of missing values, the second sample was reduced to 1,481 service firms. This sample was analyzed by using a moderated fractional regression method and the outcome variable was innovation performance. Furthermore, a multi-valued treatment approach with the augmented inverse-propensity weighted estimator was adopted to assess the performance effect that was associated with each of the SCR mechanisms.
Findings
Statistical analyses suggested that SCR positively affected both the firm’s performance and its innovation performance. Specifically, the stronger performance effects of SCR were associated with firms that had high innovation intensity, were small service firms and were part of the knowledge-intensive business service (KIBS) sector. The results also found that brainstorming sessions, a multi-disciplinary team approach, task rotation and non-financial incentives had greater performance effects than other mechanisms, especially for firms in the KIBS sector that had high innovation intensity. In addition, the results indicated that team-level mechanisms were more effective in developing highly innovative services than were individual-level mechanisms.
Originality/value
This study has contributed to the service literature by developing a contingency framework for SCR. This study has also advanced service research through the presentation of contextual effects associated with each mechanism of SCR.
Firm size, collaboration, foreign ownership and the level of formal training for employees are just some of the key inputs considered to be important in the amount of Service innovation in Tourism firms. However work has called for a greater empirical understanding on service innovation in Tourism and deeper consideration of
employment focused practices as front line employees are crucial to innovation. The relationship customers have with service providers is a key determinate of satisfaction and as such the aim of this research is to unpick further the human-related factors associated with this area of study. Data for this research paper were gathered from 201
tourism service firms located throughout Japan. Whilst the results indicate that committed front-line employees and leadership are found to be the primary antecedents of service innovation, knowledge management and instilling creativity through the firm are also key. Our results suggestion that organizations can leverage the benefits associated with human-related factors to enhance service innovation behaviours and increase business performance.
The study investigates how internal and external context factors impact a manufacturer’s servitization process (i.e. the strategic transformation from competing through products towards competing through services). A theoretical framework was developed that integrates a multi-stage conceptualisation of servitization with a focus on the wide range of internal and external context factors that support or oppose the transformation. The study draws on the collective experiences of 25 senior executives from 17 servitizing small- and medium-sized manufacturers, using a focus group-based enquiry method. The findings recognise servitization as a multi-stage transformation process with each stage being exposed to different context factors. The findings identify a wide range of context factors and show how their specific impact varies depending on the manufacturer’s servitization stage. Several theoretical and practical implications are provided.
Since it takes time and effort to put a new product or service on the market, one would like to predict whether it will be a success. In general this is not possible, but it is possible to follow best practices in order to maximize the chance of success. A smart contract is intended to encode business logic and is therefore at the heart of every new business on the Ethereum blockchain. We have investigated how to measure the success of smart contracts, and whether successful smart contracts have characteristics that less successful smart contracts lack. The appearance of a smart contract on a listing website such as Etherscan or StateoftheDapps is such a characteristic. In this paper, we present a three-pronged analysis of the relative success of listed smart contracts. First, we have used statistical analysis on the publicly visible transaction history of the Ethereum blockchain to determine that listed contracts are significantly more successful than their unlisted counterparts. Next, we have conducted a survey among more than 200 developers via an anonymous online survey about their experience with the listing process. A significant majority of respondents do not believe that listing a contract itself contributes to its success, but they believe that the extra attention that is typically paid in tandem with the listing process does contribute. Finally, based on the respondents’ answers, we have drafted 10 recommendations for developers and validated them by submitting them to an international panel of experts.
Purpose
Service design is a multidisciplinary approach that plays a key role in fostering service innovation. However, the lack of a comprehensive understanding of its multiple perspectives hampers this potential to be realized. Through an activity theory lens, the purpose of this paper is to examine core areas that inform service design, identifying shared concerns and complementary contributions.
Design/methodology/approach
The study involved a literature review in two stages, followed by a qualitative study based on selected focus groups. The first literature review identified core areas that contribute to service design. Based on this identification, the second literature review examined 135 references suggested by 13 world-leading researchers in this field. These references were qualitatively analyzed using the NVivo software. Results were validated and complemented by six multidisciplinary focus groups with service research centers in five countries.
Findings
Six core areas were identified and characterized as contributing to service design: service research, design, marketing, operations management, information systems and interaction design. Data analysis shows the various goals, objects, approaches and outcomes that multidisciplinary perspectives bring to service design, supporting them to enable service innovation.
Practical implications
This paper supports service design teams to better communicate and collaborate by providing an in-depth understanding of the multiple contributions they can integrate to create the conditions for new service.
Originality/value
This paper identifies and examines the core areas that inform service design, their shared concerns, complementarities and how they contribute to foster new forms of value co-creation, building a common ground to advance this approach and leverage its impact on service innovation.
Die Relevanz von Dienstleistungsinnovationen hat in letzter Zeit erheblich an Bedeutung gewonnen. Dies gilt gleichermaßen für den spezifischen Fall industrienaher Dienstleistungen. Die dezidierte Entwicklung innovativer Dienstleistungen stellt gerade kleine und mittlere Unternehmen (KMU) vor besondere Herausforderungen, da sie häufig nur über eingeschränkte Ressourcen und unstrukturierte Innovationsprozesse verfügen. Auf Grundlage des Design-Thinking-Ansatzes, der auf multidisziplinären Teams, Nutzerzentrierung und Kreativität basiert, hat das Verbundprojekt ‚Design Thinking for Industrial Services‘ (DETHIS) daher ein speziell auf die Bedürfnisse von KMU angepasstes Design-Thinking-Verfahren entwickelt, um deren Innovationsfähigkeit nachhaltig zu steigern. Dieses Verfahren beruht auf einem spezifischen Phasenmodell und einem Methodenbaukasten mit mehr als 400 Methoden. In diesem Beitrag stehen die Entwicklung sowie die detaillierte Präsentation des im DETHIS-Projekt entwickelten Verfahrens im Fokus.
Espousing 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]. 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
Innovations in products and services have become a necessity for the survival of modern organizations. The impact of Complexity, Technological risk and Market risk and uncertainty on the success of new technological ventures is investigated. The Complexity dimension reflects the way new ventures are managed during the development and marketing phases. The Novelty dimension reflects market uncertainty, mainly affects the way information about the customers' needs is collected and incorporated into the product design. The technology dimension, deals with the way the development process should be managed. Higher levels of technological risk require longer development periods, more design cycles and later design freeze. Projects are classified by their level of Novelty, Complexity and Technological risk. Structural equation modeling is used in this study to explore the relationships between the various components describing the innovation nature and assessing its success. The study's approach enables testing the relationships between the dependent variables (the Success Measures) and the innovation characteristics. It is shown that building technological infrastructure and new knowledge or technology has a greater impact on the venture's success than meeting operational and economic goals. The question this paper is trying to answer is what factors are more important and how organizations should structure their market and technological strategy.
We found that there is no contradiction between high levels of risk or uncertainty and business success. The success of system ventures is significantly higher than the success of lower levels of complexity. Older and more experienced entrepreneurs are likely to be engaged in more complex and novel initiatives than younger, less experienced ones. This study highlights the importance of technological risk with respect to market uncertainty. It is shown that to overcome technological obstacles and to enrich the developing organization with better knowhow and technology will lead to higher innovation success. Although risk and uncertainty that are associated with technology and market may have a negative impact on innovations' success, they are also a source for new opportunities. The research investigates the impact of Technological risk and Market uncertainty on Innovations' success. This approach enables to identify the most important factors affecting technological innovations success.
Service innovation is an important driver of enterprise self-development and growth in the current service-attuned economy. And across economic sectors, the prevalence of self-organized and self-governed ecosystems renders service innovation increasingly crucial to such service ecosystems. Scholars study service innovation from the perspective of service ecosystem, yet little attention is paid to systematically researching service-innovation components within service ecosystems, especially the implementation path of such components. Based on service-oriented logic, this study presents a framework for service innovation in service ecosystems, built upon five elements: actor-to-actor (A2A) networks, value proposition, resource integration, institutionalization processes, and information technology (IT). This might be the first study to use a combination of the Decision-Making Trial and Evaluation Laboratory (DEMATEL) based Analytic Network Process (ANP) method (called DEMATEL based ANP, or DANP) and the NK model to obtain the optimal path of service innovation in China. Despite the study’s limitations, the results show that enterprises must first develop IT capabilities and innovative value propositions, and then enhance their resource-integration capability and enlarge their A2A networks, as they accelerate their institutionalization processes. Future research must investigate service-innovation components and enhances the idea of service ecosystems, and provides guidelines how to implement service innovation in practice.
This paper contributes to the debate on the differences across service and manufacturing firms focusing on two comparable sectors: knowledge-intensive business services (KIBS), and specialized suppliers within manufacturing (SSM). Using a large panel dataset of Spanish firms, we compare the two industries in terms of the impact on their innovation performance of three factors: investment in R&D, cooperation with customers, and cooperation with other firms. These are the factors that – following the paradigm of open innovation – work together in the process of firm innovation. Our findings show that the impact of R&D is comparable in the two sectors, whereas cooperation with customers is more important for SSM than for KIBS because the latter are rather more reliant on a larger network of partners (especially knowledge providers). For both sectors, the role of cooperation vanishes when performance is measured in terms of the proportion of sales generated by innovation rather than propensity for innovation.
Despite the recognized importance of service experience as a unit of analysis and an object of design in the service design field, studies that analyse and compare service representation tools against the nature of multidimensional service experience are still limited. This paper investigates multidimensional service experience by reviewing up-to-date scholarly debates of the topic, and identifies three experience dimensions and 12 associated attributes. Based on the finding, an analytic framework is proposed as an instrument to assess service representation tools. This framework is used to discern three service representation tools’ relative positions in a holistic spectrum of service experience dimensions.
This study proposes a model for the prediction of propensity to innovate based on KIBS in the service sector of an emerging country (Brazil). The Spinner model presents, in a dynamic form, three dimensions: knowledge creation, knowledge transfer, and innovation, similar to the three axes of interaction of a fidget spinner, KIBS being the center. KIBS were divided in p-KIBS (professional KIBS) and t-KIBS (technological KIBS), according to the analysis carried out in 71 small, medium, and large firms. The Spinner model test was done based on three econometric models of logistic regression (logit), which examined the defined dimensions and variables. The model allowed us to evaluate prediction of propensity to innovate based on KIBS, considering the relationship between knowledge creation and transfer, where dimensions presented a positive sign, as expected. The findings contribute to theory development on knowledge intensive solutions, by revealing elements such as the relationship of knowledge creation and transfer with innovation in KIBS, and their relationships in the assessment prediction of propensity to innovate.
Many firms introduce both business-to-business service innovations (B2B-SIs) and business-to-consumer service innovations (B2C-SIs) and need to better allocate their resources. However, they are unsure about B2B-SIs’ effects on firm value or risk, especially relative to those of B2C-SIs. The authors address this problem by developing hypotheses that relate the number of B2B-SIs and B2C-SIs to firm value and firm risk together with the moderators (the number of product innovations and customer-focus innovations). To test the hypotheses, the authors develop and estimate a model using unique panel data of 2,263 SIs across 15 industries over eight years assembled from multiple data sources and controlling for firm- and market-specific factors, heterogeneity, and endogeneity. They analyze innovation announcements using natural language processing. The results show that B2B-SIs have a positive effect on firm value and an insignificant influence on firm risk. Importantly, the effect of a B2B-SI on firm value is significantly greater than that of a B2C-SI. Unlike B2C-SIs, the effect of B2B-SIs on firm value is greater when the firm has more product innovations. Surprisingly, unlike B2C-SIs, the effect of B2B-SIs on firm value is less positive when the SIs emphasize customers. These findings offer important insights about the relative value of B2B-SIs.
The financial crisis of 2008 produced various effects on banks compelled to rethink their business models, especially for better customer relationship management following the general climate of distrust among consumers towards financial institutions. In this context, understanding how to both satisfy and engage customers has become very important. The aim of this chapter is to investigate the role of service innovation in customer engagement in the banking sector. This chapter analyzes the effects of innovative services on customer satisfaction through the study of an Italian people's bank and the application of the Kano model. The results allow identifying those services that should be improved, as they are able to increase customer satisfaction and stimulate customer engagement. For practitioners, this chapter provides evidences on how new technologies allow banks to offer high quality and personalized services through which it is possible to improve the experience of customers and their relationship with the bank.
Purpose
This study aims to investigate service modularization in a manufacturing firm, identifies service modularization processes and examines how these processes change the service module characteristics.
Design/methodology/approach
The study is based on a longitudinal case study (2008-2017) of a manufacturing firm. The development of six service modules was analyzed using data from interviews with key informants, informal meetings and internal documentation.
Findings
This study suggests five service modularization processes, and that service module characteristics, such as standardization and interconnectedness, change in different ways depending on the service modularization processes used. It further identifies two service modularization routes that each combine the service modularization processes in unique ways with replication as a key process to improve both standardization and customization.
Practical implications
This study elaborates a framework for service modularization, which can serve as a guideline for developing service modules. It also highlights the differences between product and service modularization, suggesting that the role of service module characteristics such as standardization and customization is specific for services.
Originality/value
This longitudinal case study (2008-2017) provides empirical evidence on service modularization and extends existing knowledge on service modularization processes and how they influence service module characteristics.
Service organizations often view customer-facing or frontline employees (FLEs) as sources of inimitable knowledge valuable for innovation. This is due to the experiential nature of service and subtle qualities of engaging customer interactions. Yet, organizations face significant challenges while leveraging the knowledge of their FLEs to develop service innovations. Drawing upon the open innovation and social network literatures, we theorize the role of FLE networks, and the degree to which these networks enable the flow of distinct content for realizing effective service innovation. Specifically, we conceptualize a taxonomy of network domains—connecting customer- and internal-facing employees, and resource flows—new knowledge and self-governance activities, to provide a framework for FLE roles in knowledge networks for service-innovation. Our taxonomy expands opportunities for theorizing the mechanisms of frontline knowledge networks in service innovation as well as identifying a “dark side” that undermines potential innovation gains if left unchecked. Future directions and implications for theory and practice are discussed.
The healthcare industry is confronted with the challenge of offering customized services while in the meantime to control increasing healthcare costs. Modularization is an important approach to reduce healthcare costs and improve patient-centered services via decreasing process complexity and enhancing flexibility through configuring pre-identified service modules. Recognizing the importance of modularity for healthcare services, this paper introduces Design Structure Matrix (DSM) as a technique for healthcare process modularization. A DSM-based modularization and sequencing algorithm is developed to allocate healthcare activities to service modules using Genetic Algorithm (GA) and arrange sequences of services both within and across service modules to support modular clinical pathway design. The proposed algorithm is implemented with a case study, the results of which have demonstrated the feasibility and applicability of the proposed DSM-based modularization method for healthcare process design.
Servitization is a process adopted by some industries and companies to create competitive advantage and increase the value of physical products by adding services. Manufacturing companies may decide to integrate a
product–service system into their activities. However, there is no clear evidence of the effects of servitization on performance or sustainability, particularly in a circular economy. The aim of this study was to assess the potential impact of servitization on sustainability in a sample of 208 European listed manufacturing companies by investigating corporate sustainability disclosure, environmental performance, and policies. Using the business descriptions in the Bloomberg database, we identified two groups of companies: “pure manufacturers” and “non pure manufacturers.” We examined potential differences in sustainability between the two groups resulting from servitization. Data were collected for the fiscal year 2016. Our findings suggest that servitization leads to improved energy consumption and therefore enhances environmental performance. However, servitization had no effect on corporate sustainability disclosure and other environmental policies such as environmental assurance, emissions reduction policies, and environmental supply chain management.
This paper presents the state of the art in new service development (NSD) by analyzing 178 papers that have been categorized by discipline and method, implementing a structured methodological framework to identify existing knowledge. The findings of this paper come at odds with the notion that NSD is something that just ‘happens’, and can be used as a tool to raise awareness about organizational characteristics that need to be taken into consideration when developing new services. This work contributes to the study of service innovation and NSD and opens avenues for further research on the topic. The managerial implications of this paper highlight the importance of interdisciplinary collaboration for the implementation of successful NSD.
Markets are pressuring companies to develop new services quickly and to get them to market as soon as possible, leading to pressure for rapid deployment and ramp‐ups. Such pressure has increased with the growing digitalisation of services sectors such as banking, insurance and media (McKinsey & Co., 2015). Ramp‐ups of such services usually require a significant commitment of resources, which may cause problems if the available resources do not match the demand growth or if they are diverted from other services and involve ramping up the whole service supply chain.
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The economies of the industrialized world have become dominated by services. Many manufacturing companies have changed from producing products to providing services. However, many companies still lag behind in this transformation. It is observed that most of the published methodologies are at an advanced level and provide minimal assistance to help managers and especially the managers of small and medium enterprises (SMEs) who are interested in easy-to-use methodologies for transforming their product range. Therefore, a model that assists the transformation of products into services is proposed, which is at a level that can be directly applied by SMEs. A utility-driven approach is followed to establish the model that consists of seven steps. In the initial steps, a product that is to be servitized is selected and broken down into its utility features and customer barriers. Furthermore, options for increasing utility and reducing barriers are presented such that the overall tangibility of the existing product is reduced. This reduction in tangibility in both physical and psychological dimensions is defined as servitization in the present study. This article presents a practical framework for the transformation of company offerings so that they are gradually adjusted to a service economy.
Purpose: The study is undertaken with two objectives, first to develop a scale that can measure service innovation from customer perspective in retail industry, and second to find out how the developed service innovation measurement scale has an effect on predicting customer’s Word-of-Mouth (WOM), followed by testing the mediation effect of corporate reputation between service innovation and WOM.
Methodology: The study followed the Integrated Design Approach that included qualitative studies and quantitative studies in exploring and validating the measurement items for service innovation typologies. The codes that represent the typologies of service innovation were elicited through group discussions with selected customers and validated through in-depth interviews with decision maker/managers of retail industry in different parts of South India. The approved codes were validated through two expert opinion surveys and further authenticated through quantitative approaches such as: Exploratory Factor Analysis and Confirmatory Factor Analysis with two different sets of samples. Finally, the nomological validity of the developed scale was tested on estimating its effect on Corporate Reputation and WOM.
Findings: The developed service innovation scale can be adopted by both researchers and managers in measuring service innovation in retail industry. The path analysis results concluded that service innovation has positive impact on corporate reputation and WOM, where the decision makers/managers can note that if service innovations are brought in frequently, it would make the firm reputed in the market and ultimately results in positive WOM from the customers. The mediation analysis result also gives an insight that even if the service innovation is by a non-reputed retailer, it still gets positive WOM.
Originality/Value: The study contributes by providing a unique scale to measure service innovation from customer perspective in retail industry, overcoming the existing Goods-Dominant logic. Further, by empirically testing nomological validity, the effect on non-financial performance is estimated to understand how innovation in services would build corporate reputation that ultimately results in customers’ positive WOM which is wanting in literature on service innovation.
Among many techniques for generating new service ideas, morphological analysis has been used due to the advantage of decomposing the system into dimensions and shapes and bringing creative results in the process of recombining them. However, with the rise of smart service systems, the determination of dimensions and shapes has become a critical problem, particularly as both their structure and components become complex. This research focuses on a data-driven approach by incorporating mobile app service documents to increase objectivity and diversity in the construction of a morphology matrix. To this end, firstly, the novelty-quality map is developed to identify innovative data based on quantitative indicators. Secondly, morphological analysis is employed along with experts’ judgment in order to generate new smart service concepts. Finally, the feasibility and effectiveness of the proposed approach are shown based on a comparative analysis with conventional approaches and real services through a case study of smart home.
Purpose
Technology has been central and has made service innovations technically feasible and economically viable. Top management support, however, plays an important role in shaping a firm’s service innovation-related strategies and decisions. This study aims to propose a theoretical framework that delineates the relationships among openness of technology adoption, top management support and service innovation within social innovation context.
Design/methodology/approach
This study obtained the data through a survey of 176 information technology (IT) firms in Taiwan; IT managers were selected as the data collection sources. A partial least squares analysis was used to address sophisticated data analysis issues.
Findings
The empirical evidence indicates that openness of technology adoption enhances service innovation within social innovation context. Furthermore, top management support facilitates the relationship between openness of technology adoption and service innovation.
Research limitations/implications
The openness of technology adoption captures the interactions among top management support in shaping service innovation. Researchers should examine the nature of open technology infrastructure that will foster such service innovation from social innovation perspective.
Practical implications
The detailed findings offer practical suggestions for firms that are compelling to invest in advanced open technologies, giving opportunities for service innovation, solving social problems and meeting the new societal challenges. Additionally, firms may foster their top management’s positive intention to support service innovation by pre-planned support activities, such as allocating sufficient new service resources and qualified support technicians.
Originality/value
This study contributes to the evolving literature on the social innovation, service-dominant logic, and contingency theory. This analysis suggests that these perspectives offer a potentially useful view for integrating insights from different literature streams (e.g. openness, social innovation, service innovation, top management support and technology management) by examining them through a different conceptual lens, thus reinforcing existing findings.
Although service innovation is important, knowledge of new product and service development, including the positive effect of stage‐and‐gate‐type systems, has been derived almost exclusively from studies in the manufacturing sector. In the present paper, we address two important questions: How do differences in the firm’s business focus, which describes whether a firm puts more emphasis on products or services in its business activities, influence the usage of such formal innovation processes? Is stage‐and‐gate‐type systems’ impact on innovation program performance contingent on the firm’s business focus? Unlike previous studies, we not only differentiate service and manufacturing by industry classification codes but also apply a continuous measure to take into account the blurring of boundaries between the manufacturing and service businesses. Based on a comprehensive discussion of service‐specific characteristics and their implications for innovation management and using a cross‐industry, multi‐informant sample of innovation programs from 272 firms with 1,985 informants, we find empirical support for firms with a stronger focus on the service business being less likely to use stage‐and‐gate‐type systems. Furthermore, the use of stage‐and‐gate‐type systems fosters innovation program performance, and this effect becomes stronger as the business focus shifts toward services. This result implies that service‐based firms can benefit from stage‐and‐gate‐type systems to a greater extent than product‐based firms. Our research also demonstrates the gap between the desired level of innovation process formalization and its current usage in practice, especially for firms with a dominating service business.
The aim of this study is to evaluate new service development competencies in Turkish banking sector. Within this scope, 16 Turkish deposit banks are taken into the consideration. Additionally, balanced scorecard-based criteria are evaluated with the integrated hybrid multicriteria decision-making approach by using fuzzy analytic hierarchy process (AHP), fuzzy analytic network process (ANP) and fuzzy VIseKriterijumsa Optimizacija I Kompromisno Resenje methods. Moreover, this evaluation is performed by using both decision makers’ evaluations and content analysis. It is concluded that there is a significant difference in the results based on decision makers and content analysis. Foreign banks have the best performance in decision makers’ evaluation, whereas there are different banks in the first ranks of the content analysis. However, fuzzy AHP and fuzzy ANP give very similar results in ranking the banks according to the new service development competencies. Furthermore, no banking type in Turkey has any priority over the others in all analysis. Hence, a foreign bank has the best performance, whereas another foreign bank states on the last rank.
Purpose
The paper presents a new conceptual framework for service organizations to achieve sustainable business performance through strategic quality orientation and innovation capabilities on the basis of relevant literature review and integration of various innovation and business sustainability theories and models. The study tests if the strategic quality orientation enhances innovation capabilities in terms of exploitation and explorative innovation, which in turn can lead to sustainable business growth. Mediating impact of innovation capabilities between strategic quality orientation and sustainable business growth relationship is also examined.
Design/methodology/approach
A conceptual framework was developed to test and establish these relationships. Results were analyzed based on 442 questionnaires collected from five different service industries of Pakistan and structural equation modeling technique was used to empirically test the conceptual framework.
Findings
The results indicate that strategic quality orientation directly affects innovation capabilities and sustainable business growth and also indirectly impacts sustainable business growth through its effect on innovation capabilities.
Practical implications
The study suggests service organizations can jointly implement quality and innovation using a structured approach, with strategic quality orientation as the foundation. In this way they can leverage from their strategic quality management, supplier relationship, corporate quality culture, continual improvement and people management in order to ensure innovation and sustainability in their business growth.
Originality/value
The study integrates strategic quality orientation and innovation capabilities, and validates a new organizational framework through empirical examination which can be used by service organizations to ensure their sustainable business growth.
Big Data has emerged recently as a new digital paradigm, one that companies adopts in order to both transform existing business models and nurture their innovation activity. The peculiarities of Big Data applications span different fields such as customer need identification, risk management and decision-making, data-driven knowledge, product and service design, quality management, and opportunity recognition and creation. However, while these have resulted in the emergence of a rich research domain focusing on the managerial and practical implications typically addressed from the user perspective, there is still a lack of complete understanding of how companies that provide Big Data solutions can create and capture value from them. This paper explores the question of how provider companies create and capture value from Big Data, drawing on a multiple-case study analysis of provider companies that offer solutions and services based on Big Data. The results illustrate a theoretical framework on value creation and capture by relying on Big Data and identify two main innovation service strategies based on Big Data used by provider companies. In addition, this paper provides valuable insights as to how the network of involved stakeholders influences the design and implementation of the innovation service strategy by the provider companies.
Um innovative Serviceleistungen bei Konsumenten bekannt zu machen und zugleich bestehende Unsicherheiten zu reduzieren, ist eine Nutzung leistungsfähiger Kommunikations- und Interaktionsmaßnahmen erforderlich. Die Zielsetzung des Beitrages besteht darin, eine Strukturierung von Serviceinnovationen zu entwickeln sowie unterschiedliche Ausprägungsformen anhand des Individualisierungs- und Neuigkeitsgrades aufzuzeigen. Zudem werden die Potenziale der digitalen Kommunikation zur Bekanntmachung innovativer Serviceleistungen dargelegt und anhand von Praxisbeispielen in unterschiedlichen Servicebereichen dokumentiert.
This paper builds a conceptual reflection leading to the proposition of the customer experiential knowledge management (CEKM) approach. The challenge, here, is how to connect the customer knowledge management to the customer lived service experience. Hence, a conceptual analysis ascertains that the customer knowledge, as retrieved from his lived experience, plays a key role in the implementation of an experiential innovation. In this regard, the customer experiential knowledge is drawn from the lived service experience in situ, both online and offline. The customer experiential knowledge is redefined by integrating the experience lived and shared online. Then, a strategic model of CEKM, that integrates the customer experience processed through the knowledge management, is proposed. Research gaps are highlighted through a critical review of the literature in order to defend CEKM approach and give way to the proposition of practical implications in terms of competencies and research questions.
Services, the staple of the modern economy, are subject to constant changes. These changes are contingent on economic processes that are the result of, inter alia , technological progress, intensifying globalisation processes and growing competitiveness. Increasingly important are specialised services, where staff with high qualifications are employed. Such services include dynamically developing knowledge-based ones. Their growth has been fostered by the increasing demand for modern services in the era of the development of a knowledge-based economy.
This article focuses on the terminology related to modern services and seeks to answer questions about their role in the development of modern economies. The aim of the article is: (1) to identify modern services in the light of relevant literature; (2) to attempt to construct a model of the impact of those services on economic development; (3) to analyse the level of development of modern services in the EU member states, and (4) to empirically verify the model of the impact of the services on economic development in the EU member states. The empirical analysis was carried out with the application of statistical data from the Eurostat database.
Service innovation is of critical importance for western economies. But, in sharp contrast with product innovation, the service innovation literature is fragmented and it is not clear to what extent B2B service innovation differs from B2B product innovation. This article contributes to this ongoing debate by analyzing the innovation practices of 372 B2B product manufacturers and service providers.
The findings show that, compared to B2B products-focused firms, B2B services-focused firms are overall less sophisticated in their innovation practices: they manage less explicitly for innovation, have lower innovation expectations, favor incremental innovation and, when they do initiate more innovative or radical projects, they spend less time taking them to market. Nevertheless, they have innovation outcomes that are equivalent to products-focused firms.
This study also acknowledges the reality that the vast majority of B2B firms actually offer product-service hybrid offerings to their customers. It shows that most B2B firms offer both products and services to customers, and that mixed product strategy firms with 75% products (services) and 25% services (products) are most committed to innovation. Therefore, firms need to simultaneously develop both new products and related services and are looking for the concepts and tools to effectively do so.
Services are an increasingly dynamic part of OECD economies. One reason is deregulation, another is the spread of information technology. - See more at: http://oecdobserver.org/news/archivestory.php/aid/384/No_longer_services_as_usual.html#sthash.shrZW8IO.dpuf
Managing new product development (NPD) is, to a great extent, a process of separating the winners from the losers. At the project level, tough decisions must be made throughout each development effort to ensure that resources are being allocated appropriately. At the company level, benchmarking is helpful for identifying the critical success factors that set the most successful firms apart from their competitors. This company- or macro-level analysis also has the potential for uncovering success factors that are not readily apparent through examination of specific projects.
The conventional wisdom that product lifetimes are shrinking has important implications for technology management and product planning. However, very limited empirical informationon this topic is available. In this paper, product lifetimes are directly measured as the time between product introduction and withdrawal. Statistical analyses of desktop personal computer models introduced between 1974 and 1992 are conducted at various product market levels. Results indicate that (1) product technology and product model lifetimes have not accelerated, and (2) manufacturers have not systematically reduced the life-cycles of products within their lines. Instead, the products of firms that have entered this industry in the more recent years tend to be based on previously existing technology, and, not surprisingly, these products have lifetimes that are shorter than those of established firms. Implications of these findings are discussed.
Electronic business-to-customer (B2C) operations are making it possible for companies to deliver service products—conceptualized as bundles of physical goods, offline services, and digital content—to customers almost anywhere and at any time. In this article, the authors develop a product-process matrix for electronic B2C operations. The building blocks of the matrix are an electronic service product structure and an electronic service process structure. The electronic service product structure, characterized by the digital content of service products and the target market segment, defines four service product categories. The electronic service process structure, characterized by the flexibility of process technologies, defines four service process stages. Positions on the matrix capture the product-process interrelationships in electronic B2C operations. The authors present propositions relating customer value to positions on the product and process structures and on the matrix. They also present illustrative applications of the matrix to examine the B2C operations of two electronic food retailers.
Product development professionals may have the feeling that yet another buzzword or magic bullet always lurks just around the corner. However, researchers have devoted considerable effort to helping practioners determine which tools, techniques, and methods really do offer a competitive edge. Starting 30 years ago, research efforts have aimed at understanding NPD practices and identifying those which are deemed “best practices.” During the past five years, pursuit of this goal has produced numerous privately available reports and two research efforts sponsored by the PDMA.
Abbie Griffin summarizes the results of research efforts undertaken during the past five years and presents findings from the most recent PDMA survey on NPD best practices. This survey, conducted slightly more than five years after PDMA's first best‐practices survey, updates trends in processes, organizations, and outcomes for NPD in the U.S., and determines which practices are more commonly associated with firms that are more successsful in developing new products. The survey has the following objectives: determining the current status of NPD practices and performance; understanding how product development has changed from five years ago; determining whether NPD practice and performance differ across industry segments; and, investigating process and product development tools that differentiate product development success.
The survey findings indicate that NPD processes continue to evolve and become more sophisticated. NPD changes continually on multiple fronts, and firms that fail to keep their NPD practices up to date will suffer an increasingly marked competitive disadvantage. Interestingly, although more than half of the respondents use a cross‐functional stage‐gate process for NPD, more than one‐third of all firms in the study still use no formal process for managing NPD.
The findings suggest that firms are not adequately handling the issue of team‐based rewards. Project‐completion dinners are for the most frequently used NPD reward; they are also the only reward used more by best‐practice firms than by the rest of the respondents. The best‐practice firms participating in the study do not use financial rewards for NPD. Compared to the other firms in the study, best‐practice firms use more multifunctional teams, are more likely to measure NPD processes and outcomes, and expect more from their NPD programs.
As global competitive pressure increases and product life cycles compress, companies are trying to shorten product development cycle times. The author investigates the relationship between the actual length of product development cycle times (in months) and several basic product development project strategy and process characteristics. The research quantifies how product development cycle times increase with increased product complexity and with product newness, how using a cross-functional team interacts with product newness in the way it acts to reduce cycle time, and how using a formal product development process interacts with product complexity in the way it acts to decrease cycle time. The findings suggest that using cross-functional teams is more important in projects in which less of the design is a carryover from a previous generation. Teams then had a large impact in reducing product development cycle times. In contrast, implementing a well thought-out process is more important in firms (or divisions of firms) developing complex products or services. The more complex a product, the more time a formal process eliminates from the development cycle.
The service positioning matrix shows how the desired nature of the customer’s service encounter activity sequence translates into a recommended service system design. The matrix helps managers think about marketing and operations linkages, roles of the customer and service-provider in creating and delivering services, facility design and process choice, and the different types of management challenges at each position in the matrix. Concepts such as the service encounter activity sequence and the degree of repeatability in the activity sequence are defined and used in the matrix. Examples are given to illustrate the positioning of service entities within the matrix. An empirical evaluation provides statistical support for the logic of the service positioning matrix. The criteria used in the matrix are meaningful to survey participants. Future research directions and issues are discussed.
The growing importance of service delivery highlights the need for
well designed and operated service systems. A frame-work, developed from
the perspective of an operations manager, can aid in the understanding
of service production, assist in the identification of appropriate
design strategies, and prescribe associated system design choices. The
major dimensions of the taxonomy are the characteristics of the
system/customer interface (direct, indirect, or no customer contact) and
the attributes of the service process (rigid or fluid service
processes).
Supply chains are quite easy to define for manufacturing organizations where each participant in the chain receives inputs from a set of suppliers, processes those inputs, and delivers them to a distinct set of customers. With service organizations, one of the primary suppliers of process inputs is customers themselves, who provide their bodies, minds, belongings, or information as inputs to the service processes. We refer to this concept of customers being suppliers as “customer-supplier duality.” The duality implies that service supply chains are bidirectional, which is that production flows in both directions. This article explores the customer-supplier duality as it pertains to supply chain management, including practical and managerial implications.
Replicated the 1st author and J. J. Parkington's (1979) research on the relationships between employees and customers in service organizations by analyzing survey data from 142 employees and 968 customers from 28 branches of a bank. Moderate support was found for the 1st author and Parkington's work on correlates of stress for boundary role employees. Support was also found for relationships between branch employees' and branch customers' service perceptions and attitudes as reported by the present 1st author et al (1980). Significant relationships were reported between branch employees' perceptions of organizational human resources practices and branch customers' attitudes about service. Employee attitudes and customer attitudes were related to their own and one another's turnover intentions. Results are discussed from the perspective of promoting an integration of consumer and organizational behavior in the service sector. (51 ref) (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Intuition and previous research suggest that creating a compelling online environment for Web consumers will have numerous positive consequences for commercial Web providers. Online executives note that creating a compelling online experience for cyber customers is critical to creating competitive advantage on the Internet. Yet, very little is known about the factors that make using the Web a compelling experience for its users, and of the key consumer behavior outcomes of this compelling experience.
Recently, the flow construct has been proposed as important for understanding consumer behavior on the World Wide Web, and as a way of defining the nature of compelling online experience. Although widely studied over the past 20 years, quantitative modeling efforts of the flow construct have been neither systematic nor comprehensive. In large parts, these efforts have been hampered by considerable confusion regarding the exact conceptual definition of flow. Lacking precise definition, it has been difficult to measure flow empirically, let alone apply the concept in practice.
Following the conceptual model of flow proposed by Hoffman and Novak (1996), we conceptualize flow on the Web as a cognitive state experienced during navigation that is determined by (1) high levels of skill and control; (2) high levels of challenge and arousal; and (3) focused attention; and (4) is enhanced by interactivity and telepresence. Consumers who achieve flow on the Web are so acutely involved in the act of online navigation that thoughts and perceptions not relevant to navigation are screened out, and the consumer focuses entirely on the interaction. Concentration on the navigation experience is so intense that there is little attention left to consider anything else, and consequently, other events occurring in the consumer's surrounding physical environment lose significance. Self-consciousness disappears, the consumer's sense of time becomes distorted, and the state of mind arising as a result of achieving flow on the Web is extremely gratifying.
In a quantitative modeling framework, we develop a structural model based on our previous conceptual model of flow that embodies the components of what makes for a compelling online experience. We use data collected from a largesample, Web-based consumer survey to measure these constructs, and we fit a series of structural equation models that test related prior theory. The conceptual model is largely supported, and the improved fit offered by the revised model provides additional insights into the direct and indirect influences of flow, as well as into the relationship of flow to key consumer behavior and Web usage variables.
Our formulation provides marketing scientists with operational definitions of key model constructs and establishes reliability and validity in a comprehensive measurement framework. A key insight from the paper is that the degree to which the online experience is compelling can be defined, measured, and related well to important marketing variables. Our model constructs relate in significant ways to key consumer behavior variables, including online shopping and Web use applications such as the extent to which consumers search for product information and participate in chat rooms. As such, our model may be useful both theoretically and in practice as marketers strive to decipher the secrets of commercial success in interactive online environments.
Although recovery activities are primarily managed by the operations function, service recovery has received little attention in the operations management literature. This paper outlines a framework for examining the service recovery process and then reports on an empirical study to test this framework. The results not only validate much of what is anecdotally claimed by researchers and casual observers of service industries, but also highlight the role of operational activities in service recovery. The paper then points to the need for an array of operations‐based research efforts that will lead to better understanding of the recovery process and to more empirically based descriptive and prescriptive models.
A service framework is needed to foster strategic thinking in services. This paper introduces the service process/service package matrix to meet that need. The important feature of the service process is the degree of customer influence on the service process. The unique characteristic of the service package is that it consists of both tangible and intangible aspects. The service package is described by the degree of customization found in those tangible and intangible elements. Strategic competencies are identified and discussed along the service process dimension, the service package dimension, and the main diagonal of the matrix. Some existing strategic frameworks are embedded and incorporated in the matrix. Additionally, we formulate research propositions based on the matrix. Service firms can use this matrix to gain strategic insights by aligning the type of service package offered with the type of process used to create the service and to have a better understanding of their service operations strategy.
A typology of a class of service systems is proposed. The typology links strategic operational objectives to the decision to de‐couple work between the front and back offices of a service system. Four specific ideal types of a strategy/de‐coupling mix are described; each of which has distinct operational, marketing and human resource ramifications. A type that has had significant representation in traditional literature is the “Cost Leader” type, where back‐office activities are de‐coupled from the front office for the purpose of lowering costs. Another traditional type representative of the craftsman legacy is the “Personal Service” type, which retains back‐office tasks in the front office to pursue non‐cost‐oriented strategic goals. Theoretical and empirical evidence is also given for two non‐traditional types: the “Kiosk” type, where all tasks remain in the front office to achieve lower costs, and the “Focused Professional” type, which de‐couples front‐ and back‐office activities to enable front‐office workers to provide higher service, rather than to reduce costs. Empirically, retail bank lending systems are analyzed to support the typology.
This paper investigates project management methods used during the execution phase of new product development projects. Based on prior field observations, organizational theory and product development literature, we pose hypotheses regarding the effectiveness of the project execution methods of formality, project management autonomy and resource flexibility. A cross‐sectional survey sample of 120 completed new product development projects from a variety of assembled products industries is analyzed via hierarchical moderated regression. We find that the project execution methods are positively associated with project execution success. Further, these methods are effective singly and collectively, suggesting that firms can “balance firmness and flexibility” in product development via appropriate execution methods. Surprisingly, the effectiveness of these methods is not contingent on the product or process technology novelty inherent in a given development project. The findings suggest that firms should adopt high levels of these approaches, and that a variety of projects can be managed using broadly similar project execution methods. The findings also suggest limitations on the application of organizational information processing theory to the context of product development projects. Directions for additional theory development are outlined.
The basis of any service positioning strategy is the service itself, but marketing offers little guidance on how to craft service processes for positioning purposes. A new approach suggests that within service systems, structural process design can be used to “engineer” services on a more scientific, rational basis.
Despite the rapid increased of attention given to new product development (NPD), development project failure rate is still very high. Many companies develop interesting products, but only those firms that are effective in developing products that meet customer needs and efficient in allocating their development resources will succeed in the long run. Strategies are developed to improve the process of NPD. The strategies receive great attention in both managerial and academic areas. As innovation is rapidly producing new products, research into the NPD process is also gaining interests, producing new methods of configuring and managing development projects.
Design for assembly (DFA) is a tool which improves the manufacturability of assembled products and serves a critical role in developing new products and reengineering existing products. DFA's objectives, applications, and limitations are described and the implementation and utilization of DFA are illustrated via case study. DFA can be quite effective, but presents challenges for implementation and usage and is not applicable to all types of products. Primary results include reduced unit costs, shortened manufacturing lead times, and increased reliability. In addition, DFA aids reduction of product development time and cost, helping speed products to market.
Past classifications of services have pigeonholed industries into cells to highlight differences among service industries and in turn to develop industry-specific marketing implications. However, the acceleration of technological advances in recent years is making it possible for service firms across different industries to deliver similar forms of technology-based service with similar marketing implications. At the same time, service firms (irrespective of industry) are able to offer customers a wide range of technology-based service delivery options with different marketing implications for each. A framework is proposed for classifying technology-based service delivery options that could be applied to any service industry where technology can be used in delivery. The classification scheme would allow a given service firm to systematically investigate technology-based service delivery options in terms of customer needs and marketing potential and as a basis for market segmentation. The framework may be used to organize the literature as well as to facilitate raising research questions on issues such as service quality and customer satisfaction, employee and/or customer training and appropriate marketing strategies.
This article applies management concepts/or the development oi products to the development and growth of services businesses. It tests product platform concepts against the experiences of a successful service enterprise and sets the stage for future research by positing approaches for market segmentation, service platform definition, and competency measurement. We propose new management research in the field of product development as a foundation for studying services. The central themes of our research are frameworks guiding the efficient development of new products based on robust product and process platforms targeting an array of related markets. Enabling these product and process platforms is the development or licensing of technical, production, marketing, and organizational competencies. We adapt these concepts to services businesses, and apply them to a worker's compensation insurer, based on several years of collaborative research with management of that firm. We find the integration of target markets, services platforms, and competencies a powerful approach for characterizing the development and success of the business. Breaking the business down into major elements or subsystems of core services has allowed management to design specific service strategies and deliverables in a manner that is both highly systematic and measurable.
Why Service Stinks Companies know just how good a customer you are--and unless you're a high roller, they would rather lose you than take the time to fix your problem When Tom Unger of New Haven started banking at First Union Corp. several years ago, he knew he wasn't top of the heap. But Unger didn't realize just how dispensable he was until mysterious service charges started showing up on his account. He called the bank's toll-free number, only to reach a bored service representative who brushed him off. Then he wrote two letters, neither of which received a response. A First Union spokeswoman, Mary Eshet, says the bank doesn't discuss individual accounts but notes that customer service has been steadily improving. Not for Unger. He left. ''They wouldn't even give me the courtesy of listening to my complaint,'' he says. And Unger ought to know bad service when he sees it. He works as a customer-service representative at an electric utility where the top 350 business clients are served by six people. The next tier of 700 are handled by six more, and 30,000 others get Unger and one other rep to serve their needs. Meanwhile, the 300,000 residential customers at the lowest end are left with an 800 number. As Unger explains: ''We don't ignore anyone, but our biggest customers certainly get more attention than the rest.'' As time goes on, that service gap is only growing wider. Studies by groups ranging from the Council of Better Business Bureaus Inc. to the University of Michigan vividly detail what consumers already know: Good service is increasingly rare (charts). From passengers languishing in airport queues to bank clients caught in voice-mail hell, most consumers feel they're getting squeezed by Corporate America's push for profits and productivity. The result is more efficiencies for companies--and more frustration for their less valuable customers. ''Time saved for them is not time saved for us,'' says Claes Fornell, a University of Michigan professor who created the school's consumer satisfaction index, which shows broad declines across an array of industries. Fornell points to slight improvements in areas like autos and computers.
The service sector is receiving increasing attention with respect to technology implementation and productivity issues. At the same time, industry management remains concerned that the integrated nature of real world business is not adequately covered by academicians and their theories. This paper addresses these issues in a unique manner by examining the results of an industry gathered survey in light of three proven service models.
Specifically, data collected by a major financial services provider during a customer survey associated with two automated delivery systems, automated teller machines and self‐service gas pumps, was made available. Next, three theoretical models were selected reflecting the integrated nature of the service delivery process. Functional disciplines included operations, marketing and human behavior. The actual management of technology issue was considered from the perspectives of productivity, effectiveness, efficiency and quality factors identified in these models.
The customer acceptance and utilization of automated teller machines has been substantially less than the success of self‐service gas during the 1970–1990 period. Comparing the issues of technology management during the implementation of each offers valuable insight into factors requiring consideration when designing automated service delivery systems. Management implications are identified within the framework of lessons learned from studying these two specific technology applications.
The contrast in the success of the implementation of technology in the two service sectors studied was linked to three key factors. First, the process must be well defined and measurable characteristics identified prior to changing the system. Second, the goals of the marketing and operations functions must be coordinated with respect to implementation strategy and established capabilities of the system to change. Finally, the technology implementation must consider the needs of the customer and potential tangible benefits, so that customers will utilize the new system at volume levels that justify the initial expense of the technology.
This study presents an approach for effective service operations management by integrating market-based objectives and operating decisions of managers. This approach is based on constructs from operations management, econometrics, and marketing and can be used by managers to make better decisions about product/service design and positioning services according to market needs. Empirical data for this study were collected from the pizza delivery industry in a large metropolitan area in the western United States. Pizza delivery profiles were experimentally designed based on seven attributes: promised delivery time, actual delivery time, pizza variety, pizza temperature, money-back guarantee, price, and discount. An econometric procedure known as probabilistic discrete choice analysis was used to identify the customer pizza choice patterns and managers’ perceptions of customer choice patterns. The results show how customers trade off among different attributes when choosing a pizza delivery company. Managers can use this information to position their operations according to customer needs.
Many firms now realize the importance of planning product families and product platforms. However, little research addresses planning and execution of different types of projects within a product family platform series. This study investigates project characteristics, development challenges, typical outcomes, and success factors for product development projects at different locations in the product family spectrum. “Platform” projects result in products that initiate a new product family platform for a company. “Derivative” projects result in products consisting of extensions to an existing product family platform. Data on 108 new product development projects from a variety of assembled products industries were collected via a detailed survey and analyzed. Findings indicate that: (1) platform and derivative projects differ in project task characteristics (including the amount of new technology development undertaken and project complexity) and market newness; (2) platform and derivative projects generally do not differ in terms of project success (achievement of project objectives, level of company satisfaction, and perceived customer satisfaction) or smoothness of project execution; (3) both platform and derivative projects generally are executed in similar ways; (4) certain managerial approaches (including contingency planning, project-based evaluation of personnel, and overlap of design and manufacturing engineering) are associated with higher project execution success for both platform and derivative projects; and (5) use of interdependent technologies and novel project objectives are associated with project execution failure for platform projects. The results suggest that firms can continue to employ a single product development management process for both platform and derivative projects, as long as modest customization of the process is made for the given project type. Completely different management processes are not required. In all, the results presented in this article suggest specific managerial actions companies can take to significantly improve product development success.
The article discusses two issues. The first is whether service firms innovate at all; the second is how they organise the innovation activities. The basis for the analysis is a series of case studies in Danish service firms. The first issue is discussed theoretically. Of the several paradigms within traditional innovation theory, the strategic innovation paradigm is the most adequate to explain service innovations. Organisational learning must be separated from innovation whereby the latter means a jump in turnover and profit while the first means a lower and continuous growth. The emphirical analysis demonstrates that the service firms innovate. The second issue is analysed empirically. Different ways of organising the innovation activities are set placed a taxonomy. It is concluded that the service firms rarely have R&D departments and innovation generally is an unsystematic search-and-learn process.
Enhanced capabilities for concurrent engineering, rapid prototyping, and smoothly functioning supplier partnerships have helped reduce product design and development times. Management attention has shifted to the cross-functional front-end strategic, conceptual, and planning activities that typically precede the detailed design and development of a new product. Here, new product ideas gain the shape, justification, plans, and support leading to their approval and subsequent execution. The front-end activity in eleven companies is discussed which highlights the best practices based on the authors assessment of seven critical activities.
This article explores the design and renewal of services. We do this through the lens of methods and processes for developing product platforms for physical products. We first articulate principles for effectively developing next generation product lines using platform concepts, and illustrate these principles with examples drawn from computer and electronic products. These principles include creating new insights into a firm’s market segmentation, understanding both the perceived and latent needs of users, and doing so for new as well as existing groups of customers. These platform principles also include the design and implementation of subsystems and interfaces that can be used across different products and across different product lines. Such subsystems and interfaces become the operational platforms for new product development purposes. An approach to platform-centric organization design is also presented.We then make the extension to services by applying these principles to understand the innovations of a large international reinsurer. This company has resegmented its market to identify unfulfilled needs and growth opportunities. It also defined new service platforms, comprising operational activity areas that closely follow the value chain of how it wished to provide new reinsurance solutions to its customers. This reinsurer also had to organize differently to facilitate the development and deployment of the capabilities required for its new services. The analogies between these service innovations and those platform innovations of manufacturers are both clear and striking.We conclude by considering the difficulties faced by firms seeking to transition from a single product, nonplatform focused approach to new product development to the platform-centric ones described here.
There is some acceptance of the idea that services and products are
so intertwined that the process for development is the same, but there
has been no rigorous empirical evidence to support that contention. Uses
data collected in in-depth interviews with 80 senior level managers in
16 different firms, 25 group discussion sessions with 388 executives in
241 additional firms, and from a mail survey of 217 senior managers in
firms from 11 differing service categories. In all three phases,
elements of the service innovation process were examined. Examines the
general similarity to new product development and concentrates on the
major factors differentiating successful from unsuccessful service
innovation. Concludes that there is some similarity between product and
service innovation processes, but that significant differences exist,
with the service arena demonstrating more of a lack of new service
strategic planning, reliance on competitive imitation for new concepts,
and less presence of innovation champions. Successful firms in new
service development more closely fit innovations with the current
business than do unsuccessful firms. They also present more of an
opportunity for a champion to stay and manage a new offering after
launch. There is no apparent difference in the formality of the process
between successful and unsuccessful managers, with most service firms
reporting a more ad hoc process.
Relates the current situation with regard to operations management in the USA by reporting on journal submissions and course popularity. Notes that the areas most popular in terms of journal submissions are supply chain management, operations strategy and quality management. Also notes that, in terms of course popularity, areas such as consulting, entrepreneurship, international business and project management are of great interest to students.
Provides a review and ready reference to recent writings on new service development (NSD), especially for the financial services sector. Discusses the types of new service development, the purposes served by them and the processes. Refers to the key activities of NSD and measures its success. An annotated bibliography supplies a very useful guide to the new service development literature.
Many Internet applications do not fully utilize the unique nature of the Web, which in its purest form involves interactive, personalized information service. The true nature of the Web, here termed e-service, will be the key to marketing most effectively to the consumer, for it is the logical continuation of a 100-year trend toward information service in the economy. This paper examines the aspects of e-service that are critical in effectively interacting with consumers in interactive, networked information environments like the Internet. It discusses three central changes brought about by the advent of the Internet (true interactivity with the consumer, customer-specific, situational personalization, and the opportunity for real-time adjustments to a firm's offering to customers), as well as changes in consumer expectations regarding firm service strategies that flow from these developments. Based upon these changes in technology and consumer expectations, important elements of the e-service experience are defined. The paper concludes by showing how e-service strategies will play a significant role in growing the overall value of the firm. In each of these areas, a set of research questions is proposed that will lead to a stronger understanding of e-service and consumer behavior.
There is a growing recognition that innovation speed is important to a firm's creating and sustaining competitive advantage amidst rapidly changing business environrients. However, there has been little theoretical advancement or model building regarding when innovation speed is appropriate, what factors speed up innovations, and how differences in speed affect project outcomes. In this article, we organize and integrate the innovation speed literature, develop a conceptual framework of innovation speed, and offer researchable propositions relating to the need for and antecedents and outcomes of innovation speed. Specifically, we argue that innovation speed (a) is most appropriate in environments characterized by competitive intensity, technological and market dynamism, and low regulatory restrictiveness; (b) can be positively or negatively affected by strategic-orientation factors and organizational-capability factors; and (c) has an influence on development costs, product quality, and ultimately project success.
This paper investigates project management methods used during the execution phase of new product development projects. Based on prior field observations, organizational theory and product development literature, we pose hypotheses regarding the effectiveness of the project execution methods of formality, project management autonomy and resource flexibility. A cross-sectional survey sample of 120 completed new product development projects from a variety of assembled products industries is analyzed via hierarchical moderated regression. We find that the project execution methods are positively associated with project execution success. Further, these methods are effective singly and collectively, suggesting that firms can ''balance firmness and flexibility'' in product development via appropriate execution methods. Surprisingly, the effectiveness of these methods is not contingent on the product or process technology novelty inherent in a given development project. The findings suggest that firms should adopt high levels of these approaches, and that a variety of projects can be managed using broadly similar project execution methods. The findings also suggest limitations on the application of organizational information processing theory to the context of product development projects. Directions for additional theory development are outlined. q 2000 Elsevier Science B.V. All rights reserved.
This research demonstrates that operations agility---defined as the ability to excel simultaneously on operations capabilities of quality, delivery, flexibility, and cost in a coordinated fashion---is a viable option for retail banks encountering increasing environmental change. The question of whether there is empirical evidence that services, specifically retail banks, display the characteristics of agility like their manufacturing counterparts is open to debate. Conventional wisdom in operations management posits that most successful services trade off one capability for another. Drawing from the resource-based view of the firm, combinative capabilities view, and the cybernetics work of Ashby (1958), theoretical arguments suggest the contrary. The agility paradigm is viable in environments calling for a mix of strategic responses. Applying cluster analytic techniques to a sample of retail banks, using capabilities as taxons, we identify four strategic service groups: agile, traditionalists, niche, and straddlers. Our empirical results provide thematic explanations consistent with theory that account for how the agile strategic group offers a unique configuration of service concept, resource competencies, strategic choices, and business orientation. Profiles of the operations strategies of each strategic service group suggest that each group has found a fit between what certain segments of the market may want and what they have to offer. In particular, we found that the agile group exhibited greater resource competencies than its counterparts, requiring greater investments in infrastructure and technology. Consistent with theory, agile banks performed better over time on an absolute measure of return on assets.
We argue that industries and industry segments are characterized by a clockspeed that gauges the velocity of change in the external business environment and sets the pace of their firms' internal operations. Using data from the electronics industry, we develop and validate an integrated metric for clockspeed that takes into account both demand- and supply-side factors. We show that after controlling for product complexity and other factors, higher industry clockspeed is associated with faster execution in product development and manufacturing (e.g., shorter development time, quicker stabilization of production) and more frequent changes in organizational structure. Our findings on the effects of clockspeed can help researchers studying other industries, and our results provide benchmarks against which practitioners can compare and classify their own organizations.
This paper adopts a multidisciplinary view of innovation by integrating operations and marketing perspectives of product development. The conceptual framework builds on the resource-based view of the firm and organizational information-processing theory to characterize relationships among organizational process factors, product development capabilities, critical uncertainties, and operational/market performance in product development projects. Data from a cross-sectional sample of 120 completed development projects for assembled goods is analyzed via a two-stage hierarchical moderated regression approach. The findings show that: (1) the organizational process factors studied are associated with achievement of operational outcome targets for product quality, unit cost, and time-to-market; (2) achievement of operational outcomes aids the achievement of market outcomes, in turn suggesting that development capabilities are indeed valuable firm resources; and (3) these relationships are robust under conditions of technological, market, and environmental uncertainty. This article provides practical insight into how product development projects can be better managed for operational and market success. Additionally, this article sets a theoretical and empirical basis for future research on the influence of organizational process factors and capabilities on diverse product-innovation outcomes.
This paper is a review of research in product development, which we define as the transformation of a market opportunity into a product available for sale. Our review is broad, encompassing work in the academic fields of marketing, operations management, and engineering design. The value of this breadth is in conveying the shape of the entire research landscape. We focus on product development projects within a single firm. We also devote our attention to the development of physical goods, although much of the work we describe applies to products of all kinds. We look inside the "black box" of product development at the fundamental decisions that are made by intention or default. In doing so, we adopt the perspective of product development as a deliberate business process involving hundreds of decisions, many of which can be usefully supported by knowledge and tools. We contrast this approach to prior reviews of the literature, which tend to examine the importance of environmental and contextual variables, such as market growth rate, the competitive environment, or the level of top-management support.
This paper empirically estimates the impact of not meeting promised new product introduction dates on the market value of the firm. We estimate the average “abnormal” change in the market value for a sample of 101 firms around the date when information about delaying the introduction of new products is publicly announced. On average, delay announcements decrease the market value of the firm by 5.25%. The average dollar change in the market value in 1991 dollars is $−119.3 million. The evidence suggests that there are significant penalties for not introducing new products on time.
To provide further insight, regression analyses are used to identify factors that influence the direction and magnitude of the change in market value. We find that the competitiveness of the industry in which the firm operates, the size of the firm, and the firm's degree of diversification are statistically significant predictors for the change in the market value of firms that announce delays in the introduction of new products.
This research provides an empirically derived measurement model for customer contact, a widely used construct in service management. The model was created by applying two psychometric scaling techniques, Multidimensional Scaling (MDS) and the method of paired comparisons, and Content Analysis, to the ratings and responses of service research experts. MDS showed that the construct of Customer Contact is multidimensional and complex. An interval scale was developed using the paired comparison methodology, and a measurement model was developed using this contact scale. The central finding was that the degree or level of contact can be measured at the episode level by averaging the normalized values of communication time, the information richness, and the level of intimacy. The uses of the measurement model include refining current research, and reevaluating past research, developing contingency models for service quality and design, and providing practitioners with a richer understanding of customer contact to facilitate service system design.
This paper focuses on an important new service management strategy: the operations capabilities-service quality-performance (C-SQ-P) triad. In order to understand what generic operations capabilities influence the strategic behavior of high performing service firms, we explore three related questions: What generic operations capabilities are among the strategic determinants of service quality? Does service quality affect market performance? How is market conduct related to the C-SQ-P triad? These questions are investigated using a stylized capabilities-based model of service quality that simultaneously assesses their impact upon a firm's market performance. Several insights emerge from our research: a) generic operations capabilities affect service quality and performance, although not all relationships are direct; b) service quality know-how and innovations can be directly observed and imitated; c) the effects of technological leadership and market acuity on service quality are moderated by the absorptive capacity of employees to recognize and exploit their potential, and hence, investments in people are critical to success; d) market conduct influences the generic capabilities of the firm more than market performance, ceteris paribus; and e) total factor productivity and service quality are negatively correlated.
This paper examines the effect on product development of project scope: the extent to which a new product is based on unique parts developed in-house. Using data from a larger study of product development in the world auto industry, the paper presents evidence on the impact of scope on lead time and engineering productivity. Studies of the automotive supplier industry suggest that very different structures and relationships exist in Japan, the U.S., and Europe. Yet there has been little study of the impact of these differences on development performance. Further, little is known about the effects of different parts strategies (i.e. unique versus common or carryover parts) on development. The evidence presented here suggests that project scope differs significantly in the industry, even for comparable products. These differences in strategy, in turn, explain an important part of differences in performance. In particular, it appears that a distinctive approach to scope among Japanese firms---high levels of unique parts, intensive supplier involvement in engineering---accounts for a significant fraction of their advantage in lead time and cost.
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.