Advertisement

Developing Service-Based Business Models: Which Innovation Capability for Which Innovation Dimension?

  • Matthijs J. JanssenEmail author
  • Pim den Hertog
Chapter
Part of the Translational Systems Sciences book series (TSS, volume 6)

Abstract

It is widely understood that firms innovate by altering their business model rather than only changing a particular technological aspect of their offerings. In many cases, also for manufacturers, actual value is being created through the provision of services. What has remained underexplored so far is the question of which innovation capabilities are most needed when developing a service-based business model. In this chapter, we discuss how both the concept of service innovation and the concept of business model innovation are variations of evolutionary theories typically applied only to technology. Using a large-scale survey, we test hypotheses regarding the co-occurrence of six (also evolutionary inspired) innovation capabilities on the one hand and changes in five particular business model dimensions on the other hand. Simultaneously regressing the capabilities on these dimensions confirms their distinctiveness, as each capability is linked to one or more dimensions. Our effort to combine two frameworks brings a vocabulary, mapping tools, measurement basis and empirical evidence on distinct patterns in the interlinkages between organizational capabilities and innovation outcome. These contributions can provide management guidance to organizations aiming to develop innovative service-based business models.

Keywords

Innovation capabilities Business model 

References

  1. Aa, W., & Elfring, T. (2002). Realizing innovation in services. Scandinavian Journal of Management, 18, 155–171.CrossRefGoogle Scholar
  2. Agarwal, R., & Selen, W. (2011). Multi-dimensional nature of service innovation: Operationalisation of the elevated service offerings construct in collaborative service organisations. International Journal of Operations & Production Management, 31, 1164–1192.CrossRefGoogle Scholar
  3. Alam, I. (2002). An exploratory investigation of user involvement in New Service Development. Journal of the Academy of Marketing Science, 30(3), 250–261.CrossRefGoogle Scholar
  4. Alkemade, F., Frenken, K., Hekkert, M., & Schwoon, M. (2009). A complex systems methodology to transition management. Journal of Evolutionary Economics, 19, 527–543.CrossRefGoogle Scholar
  5. Amit, R., & Zott, C. (2001). Value creation in E-business. Strategic Management Journal, 22(6–7), 493–520.CrossRefGoogle Scholar
  6. Baden-Fuller, C., & Haefliger, S. (2013). Business models and technological innovation. Long Range Planning, 46, 419–426.CrossRefGoogle Scholar
  7. Bohnsack, R., Pinkse, J., & Kolk, A. (2014). Business models for sustainable technologies: Exploring business model evolution in the case of electric vehicles. Research Policy, 43, 284–300.CrossRefGoogle Scholar
  8. Bryson, J., & Taylor, M. (2010). Competitiveness by design and inimitability through service: Understanding the dynamics of firm-based competition in the West Midlands jewellery and lock industries. The Service Industries Journal, 30, 583–596.CrossRefGoogle Scholar
  9. Cainelli, G., Evangelista, R., & Savona, M. (2004). The impact of innovation on economic performance in services. Service Industries Journal, 24(1), 116–130.CrossRefGoogle Scholar
  10. Carlborg, P., Kindström, D., & Kowalkowski, C. (2014). The evolution of service innovation research: A critical review and synthesis. The Service Industries Journal, 34(5), 373–398.CrossRefGoogle Scholar
  11. Ceschin, F., & Vezzoli, C. (2010). The role of public policy in stimulating radical environmental impact reduction in the automotive sector: The need to focus on product-service system innovation. International Journal of Automotive Technology and Management, 10(2/3), 321–341.CrossRefGoogle Scholar
  12. Chae, B. (2012). A framework for new solution development: An adaptive search perspective. Service Industries Journal, 32, 127–149.CrossRefGoogle Scholar
  13. Chesbrough, H. (2011). Open services innovation: Rethinking your business to grow and compete in a new era. New York: Wiley.CrossRefGoogle Scholar
  14. Chesbrough, H., & Rosenbloom, R. S. (2002). The role of the business model in capturing value from innovation: Evidence from Xerox Corporation’s technology spin-off companies. Industrial and Corporate Change, 11, 529–555.CrossRefGoogle Scholar
  15. Cusumano, M., Kahl, S., & Suarez, F. (2015). Services, industry evolution, and the competitive strategies of product firms. Strategic Management Journal, 36(4), 559–575.CrossRefGoogle Scholar
  16. den Hertog, P. (2000). Knowledge intensive business services as co-producers of innovation. International Journal of Innovation Management, 4, 491–528.CrossRefGoogle Scholar
  17. den Hertog, P. (2010). Managing service innovation: Firm-level dynamic capabilities and policy options. PhD-thesis. University of Amsterdam, Amsterdam.Google Scholar
  18. den Hertog, P., & de Jong, G. (2007). Randstad’s business model of innovation: Results from an exploratory study in the temporary staffing industry. Innovation: Management, Policy & Practice, 9(3–4), 351–364.Google Scholar
  19. den Hertog, P., Bouwman, H., Gallego, J., Green, L., Howells, J., Meiren, T. H., Miles, I., Moerschel, I., Narbona, A., Rubalcaba, L., Segers, J., & Tether, B. (2006). Research and development needs of business related service firms, RENESER Project. Dialogic/Fraunhofer IAO/University of Alcalá (Servilab)/Manchester Institute of Innovation, Utrecht/Stuttgart/Alcalá/Manchester.Google Scholar
  20. den Hertog, P., Aa, W., & De Jong, M. (2010). Capabilities for managing service innovation: Towards a conceptual framework. Journal Service Management, 21, 490–514.CrossRefGoogle Scholar
  21. Desmarchelier, B., Djellal, F., & Gallouj, F. (2013). Environmental policies and eco-innovations by service firms: An agent-based model. Technological Forecasting & Social Change, 80, 1395–1408.CrossRefGoogle Scholar
  22. Djellal, F., & Gallouj, F. (2005). Mapping innovation dynamics in hospitals. Research Policy, 34(6), 817–835.CrossRefGoogle Scholar
  23. Droege, H., Hildebrand, D., & Heras Forcada, M. (2009). Innovation in services: Present findings, and future pathways. Journal Service Management, 20, 131–155.CrossRefGoogle Scholar
  24. Edvardsson, B., & Enquist, B. (2009). Values-based service for sustainable business. Lessons from IKEA. Abingdon: Routledge.Google Scholar
  25. Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: What are they? Strategic Management Journal, 21(10–11), 1105–1121.CrossRefGoogle Scholar
  26. Frei, F. X. (2008). The four things a service business must get right. Harvard Business Review, 86(4), 70–80.Google Scholar
  27. Frenken, K. (2005). Innovation, evolution and complexity theory. Cheltenham: Edward Elgar.Google Scholar
  28. Gallouj, F., & Toivonen, M. (2011/2). Elaborating the characteristics-based approach to service innovation: Making the service process visible. Journal of Innovation Economics, 2, 33–58.Google Scholar
  29. Gallouj, F., & Weinstein, O. (1997). Innovation in services. Research Policy, 26(4–5), 537–556.CrossRefGoogle Scholar
  30. Gawer, A., & Cusumano, M. A. (2002). Platform leadership, how Intel, Microsoft and Cisco drive industry innovation. Boston: Harvard Business School Press.Google Scholar
  31. Hansen, M. T., & Birkinshaw, J. (2007). The innovation value chain. Harvard Business Review, 85(6), 121–130.Google Scholar
  32. Hooper, D., Coughlan, J., & Mullen, M. R. (2008). Structural equation modelling: Guidelines for determining model fit. Journal of Business Research Methods, 6, 53–56.Google Scholar
  33. Janssen, M. (2015). Service innovation in an evolutionary perspective. Eindhoven: Eindhoven University of Technology.Google Scholar
  34. Janssen, M., Castaldi, C., Alexiev, A., & den Hertog, P. (2015a). Exploring a multidimensional approach to service innovation. In R. Agarwal, W. Selen, G. Roos, & R. Green (Eds.), The handbook of service innovation. London: Springer.Google Scholar
  35. Janssen, M., Castaldi, C., & Alexiev, A. (2015b). Dynamic capabilities for service innovation: conceptualization and measurement. R&D Management. DOI:  10.1111/radm.12147.Google Scholar
  36. Kauffman, S. (1993). The origins of order: Self-organization and selection in evolution. New York: Oxford University Press.Google Scholar
  37. Kindström, D., Kowalkowski, C., & Sandberg, E. (2013). Enabling service innovation: A dynamic capabilities approach. Journal of Business Research, 66, 1063–1073.CrossRefGoogle Scholar
  38. Krishnan, B. C., & Hartline, M. D. (2001). Brand equity: Is it more important in services? Journal of Services Marketing, 15(5), 328–342.CrossRefGoogle Scholar
  39. Kuk, G., & Janssen, M. (2013). Assembling infrastructures and business models for service design and innovation. Information Systems Journal, 23, 445–469.CrossRefGoogle Scholar
  40. Lyons, R. K., Chatman, J. A., & Joyce, C. K. (2007). Innovation in services: Corporate culture and investment banking. California Management Review, 50(1), 174–191.CrossRefGoogle Scholar
  41. Maglio, P., & Spohrer, J. (2008). Fundamentals of service science. Journal of the Academy of Marketing Science, 36(1), 18–20.CrossRefGoogle Scholar
  42. Nair, S., Paulose, H., Palacios, M., & Tafur, J. (2013). Service orientation: Effectuating business model innovation. Service Industries Journal, 33(9–10), 958–975.CrossRefGoogle Scholar
  43. Nelson, R., & Winter, S. (1982). An evolutionary theory of economic change. Cambridge: Belknap Press of Harvard University Press.Google Scholar
  44. Normann, R. (2002). Service management: Strategy and leadership in service business (3rd ed.). Chichester: Wiley.Google Scholar
  45. Osterwalder, A., & Pigneur, Y. (2010). Business model generation: A handbook for visionaries, game changers, and challengers. Hoboken: Wiley.Google Scholar
  46. Pine, B., & Gilmore, J. (1999). The experience economy. Boston: HBS Press.Google Scholar
  47. Roth, A. V., & Menor, L. J. (2003). Insights into service operations management: A research agenda. Production and Operations Management, 12(2), 145–164.CrossRefGoogle Scholar
  48. Saebi, T., & Foss, N. (2015). Business models for open innovation: Matching heterogeneous open innovation strategies with business model dimensions. European Management Journal, 33, 201–213.CrossRefGoogle Scholar
  49. Suarez, F., Cusumano, M., & Kahl, S. (2013). Services and the business models of product firms: An empirical analysis of the software industry. Management Science, 59(2), 420–435.CrossRefGoogle Scholar
  50. Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategy Management Journal, 28(13), 1319–1350.CrossRefGoogle Scholar
  51. Teece, D. J. (2010). Business models, business strategy and innovation. Long Range Planning, 43(2–3), 172–194.CrossRefGoogle Scholar
  52. Toivonen, M. (2010). Different types of innovation processes in services and their organizational implications. In F. Gallouj & F. Djellal (Eds.), The handbook of innovation and services (pp. 221–249). Cheltenham: Edward Elgar.Google Scholar
  53. Vargo, S. L., & Lusch, R. F. (2004). Evolving to a new dominant logic for marketing. Journal Market, 86(1), 1–17.CrossRefGoogle Scholar
  54. Vargo, S. L., & Lusch, R. F. (2008). Service-dominant logic: Continuing the evolution. Journal Academy Market Science, 1(36), 1–10.CrossRefGoogle Scholar
  55. Visnjic Kastalli, I., & Van Looy, B. (2013). Servitization: Disentangling the impact of service business model innovation on manufacturing firm performance. Journal of Operations Management, 31, 169–180.CrossRefGoogle Scholar
  56. Williams, K. L. (2006). Personas in the design process: A tool for understanding others. Atlanta: Georgia Institute of Technology.Google Scholar
  57. Williamson, O. (1999). Strategy research: Governance and competence perspectives. Strategic Management Journal, 20, 1087–1108.CrossRefGoogle Scholar
  58. Winter, S. G., & Szulanski, G. (2001). Replication as strategy. Organization Science, 12(6), 730–743.CrossRefGoogle Scholar
  59. Witell, L., & Löfgren, M. (2013). From service for free to service for fee: Business model innovation in manufacturing firms. Journal of Service Management, 24(5), 520–533.CrossRefGoogle Scholar
  60. Zähringer, D., Niederberger, J., Blind, K., & Schletz, A. (2011). Revenue creation: Business models for product-related services in international markets – the case of Zwick GmbH & Co. KG. The Service Industries Journal, 31(4), 629–641.CrossRefGoogle Scholar
  61. Zolnowski, A., Semmann, M., Amrou, S., & Böhmann, T. (2013). Identifying opportunities for service productivity improvement using a business model lens. The Service Industries Journal, 33(3–4), 409–425.CrossRefGoogle Scholar
  62. Zott, C., Amit, R., & Massa, L. (2011). The business model: Recent developments and future research. Journal of Management, 37, 1019–1042.CrossRefGoogle Scholar

Copyright information

© Springer Japan 2016

Authors and Affiliations

  1. 1.Dialogic Innovatie en InteractieUtrechtThe Netherlands
  2. 2.Center for International Development, Harvard Kennedy SchoolHarvard UniversityCambridgeUSA

Personalised recommendations