Service innovation by SME

Author: Uden Lorna   Naaranoja Marja  

Publisher: Inderscience Publishers

ISSN: 1476-1289

Source: International Journal of Web Engineering and Technology, Vol.5, Iss.3, 2010-01, pp. : 268-294

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Abstract

Service innovation is important in today's world economy. It is the current focus of many businesses. The reason is that services today represent 80% of most developed countries' GDP and a growing percentage of the developing countries' GDP. Organisations today can no longer compete solely on providing superior service on their core products, instead, they must move into customer relationship management through the co-evolution of memorable experiences with their customers. This means providing better services for their customers. SMEs are a breeding ground for service innovation. Currently there is very little literature existing concerning the role of SMEs in service innovation. This paper aims to shed some light on identifying the drivers for the application of service innovation for SMEs using a case study from Finland. The case study shows the processes that are important for an SME in service innovation. Central to this is the importance of co-creation of value between provider and customers based on the service dominant logic of marketing. In the paper, emphasis is put on the importance of sustaining relationship with customers by constantly focusing on the quality of customer interactive experiences with the provider to maintain the co-creation of value.