Assignment #15

1. Discuss the differences between product innovation and service innovation.

Traditionally, the literature has viewed services as different from products. This is because innovation
theory has been developed around science and technological development. The intangibility makes it
difficult for the traditional view to embrace or understand innovation within services. Characteristics of
services are identified as intangibility, heterogeneity, and simultaneity. The three key characteristics that
distinguish service from products, with interaction with the consumer the key distinguishing
characteristics in service development

2.What are the factors that have led to the increase in services?
OUTSOURCING has become very widespread in the last decade has moved on from limited applications
where peripheral business functions are outsourced to much more vital business functions being
outsourced today, as such IT support. Expected gains(factors)derived from outsourcing (from literature)

 The reduction of operational costs(Lacity,1993)

 The ability to transform fixed costs to variable costs(Alexander5 and Young,1996)
 Ability to focus on core competencies(Quinn,1994)
 Access to the industry-leading external competencies and expertise
 There seems little doubt that the growth in service is linked to this enormous growth in
outsourcing, with many firms now buying in services that were previously undertaken in-house.

3.How has new technology contributed to the growth in services?

The growth in information communication technologies during the 1980s and the development of the
internet in the 1990s and into the twenty-first century had led to enormous sums of money being spent
by firms to ensure that they are equipped to complete. Also, the introduction of some of these business
systems, such as enterprise resource planning systems, have led to significant reductions in costs and
improvements in inefficiency. The development of internet-based firms, such as eBay's is clear evidence
of innovation outputs within service-even if the technology is a key antecedent.

4.Discuss how some new services have created new business models.
New services were taught new business models mainly because there were technologies behind them.
technologies, for example, the internet, can transform the conventional way of doing something into
new service innovation. let us take eBay for example. Most people already know the concept of the
auction, but eBay brings the auction to a new level by implementing models that were created by the
discovery of new services seek not only to augment existing models but to amplify new strength in the
new models.

5.Explain why manufacturing firms are increasingly involved in offering services. Discuss some examples.
The extension to which manufacturing firms are moving toward service is also known as
servitization(Crozel 2015). This strategy aims to either substitute or complement existing business
models of current firms. We argued that the reason behind servitization is because of the need to
strengthen a company's value chain to the customer along with the need to gain competitiveness in a
global economy. Servitization also can act as a backup plan if manufacturing industries are not showing
good performance for the company. So if all fails, a company can still rely on its service offerings. A good
example for this is Apple as a company which produces smartphone then later move towards service
firm by offering online service through its AppStore and iTunes.As we can see today, Apple is
inseparable from AppStore.This is the result of well-planned integration of the service and
manufacturing side.

6. Explain the key roles played by the consumer in new service development.
The consumer plays the key roles in new service development as the contributions. co-producers and
co-creators by giving their request, feedback, and suggestions. By allowing consumers to innovate on
their own or by spending time with them and taking part in activities with them, deep insights and new
ideas of service development can emerge. Companies that engage in collaborative innovation with
customers can expect improved customer satisfaction, customer loyalty, and profit margin as well. The
new service has been developed by responding constantly to what the consumers have wanted. IN eBay
study. eBay focused to maintain the spirit of the traditional community of traders and it is the
community of traders that has driven the new service development. eBay does not need to spend large
sums of money trying to understand what the customer wants the customers constantly request and
suggest changes. The first intended business model was to make up a community and his vision has
helped shape the business later. Also, it is that new technology is providing a driving force for new
services.

7.Explain how various groups of people in the organization might use a service blueprint.
The service blueprint is the print and foremost customer-focused technique or tool, allowing firms to
visualize the service processes, point of customer contact, and the physical evidence associated with
their services from their customer's perspective for service innovation. Various groups of people from
the design, delivery, and support of the service in the organization should be involved in the blueprinting
process for a particular service. This provides the greatest opportunity to capture diverse perspectives
concerning