BA0377

WHAT IS SERVICE INNOVATION?

LECTURE 5
• Innovation can mean new, improved or simply
different.

• If a service innovation is too radical, it may cause

too great an increase in adoption time and the
customers may perceive the innovation itself as too
complex.
 SERVICE INNOVATION COMES
ABOUT IN VARIOUS WAYS
• Change the Role of the Consumer. Eg. Self checkout
• Change the process
 SERVICE INNOVATION COMES
ABOUT IN VARIOUS WAYS
• Change the Role of the Consumer. Eg. Self checkout
• Change the process. Eg. Filing online reports as opposed to going
down to the NPC; Online check in
• Fill an Unsatisfied Need.
 SERVICE INNOVATION COMES
ABOUT IN VARIOUS WAYS
• Change the Role of the Consumer. Eg. Self checkout
• Change the process. Eg. Filing online reports as opposed to going
down to the NPC; Online check in
• Fill an Unsatisfied Need.
• Break the Value Chain
 SERVICE INNOVATION COMES
ABOUT IN VARIOUS WAYS
• Change the Role of the Consumer. Eg. Self checkout
• Change the process. Eg. Filing online reports as opposed to going
down to the NPC; Online check in
• Fill an Unsatisfied Need.
• Break the Value Chain. Eg. Zuji
• New Business Model
 SERVICE INNOVATION COMES
ABOUT IN VARIOUS WAYS
• Change the Role of the Consumer. Eg. Self checkout
• Change the process. Eg. Filing online reports as opposed to going
down to the NPC; Online check in
• Fill an Unsatisfied Need.
• Break the Value Chain
• New Business Model
• Study Customer Processes
DEGREE OF INNOVATION

Radical Innovation

Recombinative
Innovation

Incremental
Innovation
 RADICAL,
INCREMENTAL AND
RECOMBINATIVE
SERVICE INNOVATION
• An incremental innovation only entails minor changes in the
service system.
• They are often efficiency improvements from both the customer’s
and company’s point of view.
 RADICAL,
INCREMENTAL AND
RECOMBINATIVE
SERVICE INNOVATION
• A radical innovation involves extensive underlying change in
attributes.
• The entire service system is often modified, leading to profound
changes in most or all service attributes.
 RADICAL,
INCREMENTAL AND
RECOMBINATIVE
SERVICE INNOVATION

• Recombinative innovation may be the most common type of

service innovation.
• It involves merging an established solution with either a
completely new one or one that has been part of a previous
offering.
 WHAT IS YOUR
SERVICE INNOVATION?
 EXPERIENCE
Categories of Service
Innovation
Behavioural
Experience
Innovation
Innovation

Process Biz Model Brand

STREAMLINE Innovation Innovation DIFFERENTIATI
Innovation
ON

Social
Behavioural
Innovation
Innovation

HELP
 EXPERIENCE Types of Value
Creation

STREAMLINE DIFFERENTIATI
ON

HELP
 EXPERIENCE
Categories of Service
Innovation

Process
STREAMLINE Innovation DIFFERENTIATI
ON

HELP
 PROCESS INNOVATION
• Streamlining a process is the most easily copied.
• Eg. Paging tech for queue system at restaurants
• In order for a company to succeed:
• Strong customer base that can quickly embrace the
innovation
• A sufficient amount of resources to withstand other
companies copying the concept. Eg. Amazon
 PROCESS INNOVATION
• A service innovation that provide a higher efficiency or assistance
to the customer.
• Self service may create value by lowering cost, saving time,
increasing hours of availability and even increasing customer
satisfaction.
Airline Check in Kiosks
 Categories of Service
Innovation

Brand
DIFFERENTIATI
Innovation
ON
 BRAND INNOVATION
• Studying strong brands, such as Google, Starbucks or Ikea,
reveals that each represents arrays of innovations that
collectively represent the actual service innovation.

• Even though each of these innovations can easily be copied

individually, it is incredibly difficult to copy the entire
concept.
 EXPERIENCE
Categories of Service
Innovation
Behavioural
Experience
Innovation
Innovation

Process Biz Model Brand

STREAMLINE Innovation Innovation DIFFERENTIATI
Innovation
ON

Social
Behavioural
Innovation
Innovation

HELP