Modernization in Services - Prospects and hindrances

The service zone or service sector has nowadays turned to be highly competitive and globalized; as a result persuading businesses to re-shape their offerings. In circumstances where the services drops its different benefits or is not able to sustain the similar, the continued existence of the firm mainly depends on its capability to constantly innovate and make the most of potential opportunities in a perpetually changing landscape. In this respect, the service innovation is an important element which can very much contribute to a firm's success, improve value, enhance customer retention, attract new customers, and efficiently accelerate growth and productivity. However the researchers have revealed increased interest in the domain of service innovation, studies evaluating the challenges in the implementation of similar are deficient. Throughout an analysis and synthesis of the existing literature in this regard, the current review paper proposes the possible opportunities which can be tapped via innovation in services. The paper as well states the probable barriers that the firms must take into account at the time of planning and/or implementing innovation in the services domain. The conceptual base provided here can be helpful for the service firms in planning suitable innovation associated strategies.

By increasingly using the service sector contribute to gross domestic product (GDP) of developed and also developing economies, the necessity to produce and make use of innovation is felt more via the service firms as compared to the manufacturing industries. Recognizing this, numerous firms in the service sector are adopting service innovation as the efficient tool to differentiate their offerings and make better business opportunities.

Opportunities in Service Innovation:

1) Effective Research and Development:

The activities of research and development potentially persuade the innovations in all organizations irrespective of the size. However, the ability to innovate in an organization is for all time associated by its formal research and development actions. Such formal research activities often comprised of market intelligence and scientific knowledge, points out the technical progressiveness of ventures and thus give a significant prospect for service providers to take advantage from innovative services that result from the integral market intelligence.

2) Implications to Consider:

Marketers could make use of the prospect of implementing service innovation and change via research and growth activities in terms of internal resources, potentials and external input gained via networking.

3) Power Shift:

The literature discusses the two basic conditions that have traditionally limited persuade of consumers over the firms. First, consumers frequently didn’t have access to all appropriate and related information concerning quality or costs which would allow them to make an optimum purchasing decision and second, they usually didn’t have much influence to gain redress whenever they perceived that they are exploited or treated badly.

4) Converting resources into Dynamic capabilities:

Based on the idea that exclusive bundles of resources form the base for competitive benefit, the dynamic capabilities viewpoint views sustainable competitive benefit as the capability to form, extend and amend valuable resources and abilities over time.

5) Economic Factors:

Economic factors, however a part of the firm's internal factors, have been observed separately in the present paper as financial resources which affect the organization's capacity to innovate productively.

6) External Factors:

External factors are stated as such factors which are outside the firm's control, such as risk of imitation and regulatory constraints which obstruct service innovation. Risk of imitation is the firm's incapability to defend innovation against imitation via competitors.

Conclusion:

First of all, opportunities embedded because of the shift in power from service providers to consumers emphasize the significance of demand-driven innovations with focus on consumer’s requirements. Secondly, the study advises that innovation policy must not be biased towards the formal research and development activities. Third, the transforming resources into capabilities could be employed as an effectual tool via E-learning service providers to fortify the relationship building, build up new skills, innovate ways of handling problems and seize more opportunities for introducing the innovation in services. Lastly, firms can evaluate the practical viability of developing and/ or enhancing new services and processes via addressing the key barriers in the present work.