The term “Service economy” has changed the mindsets of companies’ strategic thinking in the 21st century. It reflects from the fact that in industrialized economies, manufacturers are focusing more and more on add-on services when trying to defend their business against the continuously growing service sector. Market is a battlefield and new challengers are entering from every corner.
Markets are changing rapidly and constantly forcing companies to challenge their existing business models. Today many of the startup companies are founded on the basis of innovative service concepts, aiming to create their own market and challenge the structures of traditional business competition. This blog post focuses on providing a strategic roadmap to startups on their journey to become a forerunner in service business. Continue reading →
The book gives a comprehensive overview of the service business development in the business environment of capital goods and brings together years experience on how manufacturing companies can create value through services. It also discusses the challenges of how to generate revenue of the services itself (along with products) and what kind of strategies can be used in different stages and types of the manufacturing companies in global business.
1 Challenges and common questions
When developing services in manufacturing firms it is a change in value creation and leap from production minded one-off sales culture to long-term customer relationship building culture that creates value to customer in broader scale. Continue reading →
Vast number of new service concepts fail (> 4 out of 10), because they are build first and then introduced to the market (Bettencourt, 2010). The focus should be another way around and shifted away from the service solutions and back to the customer. Rather than asking, “How are we doing?” companies must began asking “How are the customers doing?
The key questions in service innovation are “How the customers define value?” and “How the companies approach customer needs?”. Outcome-driven innovation is an innovation philosophy and process built around the understanding that people “hire” goods and services to get jobs done (Bettencourt, 2010). By concentrating on these jobs, companies are capable of creating services beyond traditional services. For example when a person opens a bank account, creates a budget etc. the fundamental job is managing day-to-day cash flow. Service innovation in this case would be to create service to help the customer manage cash flow on daily bases. Creating a tool to help the customer make a budget in an easier and better way would not be service innovation but service development. Continue reading →
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