New Service Development: A Case Study for the Swedish Supermarket Chain ICA

Term Paper, 2012

15 Pages, Grade: 2,3


Table of Content

(I) List of Figures and Tables

1. Introduction
1.1 Background and Purpose
1.2 Aim
1.3 Methodology

2. Authors Process Steps

3. Description of the Concept Finding for ICA
3.1 Service Maintenance
3.2 Improve Service Performance
3.3 Service Innovation
3.4 Description of the Innovations used for a New ICA Concept
3.4.1 Improvement of the Package
3.4.2 Customer Roles and Interaction

4. Strategy Description for ICA
4.1 The Product Journey
4.2 Customer Involvement
4.3 Summarization of the Strategy

5. Conclusion

(II) References

(I) List of Figures and Tables

Figure 1: Dynamic Hierarchy of Service Development

Figure 2: Reverse Movements in the Quality Lifecycle

Figure 3: Summarization of ICA`s Strategy

1. Introduction

1.1 Background and Purpose

The challenge which many companies have to face nowadays is to stay competitive at the market. According to Gustafsson and Johnson (2003), New Service Development can be used to achieve a competitive advantage and compete through services. Thereby, the term of New Service Development (abbreviated as NSD) gets into focus of companies to emphasize their own offerings of those from their competitors. The question remains what steps are involved in the process of NSD and how companies can achieve a successful service development. One major influence within NSD is the customer and their knowledge provided for firms. Customer involvement in the different service development steps of a company belongs nowadays to the day-to-day business of many companies and provide customer focused products remains a crucial part of this. (Alam, 2006)

Within this report the change process of a supermarket (ICA) from a normal good-dominant grocery store to a more service-dominant business is lined out. The dynamic process of NSD is described via own product experiences combined with NSD theories. The last step is the strategy development for ICA. The strategy aims to achieve a competitive advantage and ensure the company growth.

1.2 Aim

The aim is (1) to illustrate the New Service Development process within a chosen product from ICA and (2) to develop a customer focused strategy for the supermarket chain of ICA on the base of New Service Development.

1.3 Methodology

A literature conducted analyze is used to gain the theoretical knowledge. The focus lays on the book Competing in a Service Economy by Gustafsson and Johnson (2003). The usage of different studies, professional articles and internet sources, helps to achieve a direct connection between theory and practice.

2. Authors Process Steps

The process started with the shopping experience at ICA, Karlstad. The authors of the report went to ICA to find a suitable product which can be used as base for the further analyze in the case of New Service Development.

The chosen product is a “Fruit Crème” produced by ICA, the costs depending on the sort of fruit used for the crème, the price range is between 14,90 SEK till 19,90 SEK. The fruit crème is produced in four different flavors, blueberry, strawberry, apricot and raspberry. This product is one of ICA´s private labels called ICA´s high-quality everyday products (ICA, 2012a). The authors detect three other competitors within this product type. The fruit crème of ICA can be seen as a typical Swedish product.

The author’s process steps will be described on the basis of the service development process by Gustafsson and Johnson (2003), to combine the real process with the theory. The process can be seen as dynamic and every process stage is interacting and reliant on the other process stages. First, the authors put on the lens of the customer from the buying until the consuming process. Second, through to the usage of the product, there were several defects uncovered regarding the product`s design and usage. The authors wrote the detected defects down in an individual diary. Additionally, solutions and ideas for the product development and improvement have been written down individual in an idea paper. These processes can also be named as idea generation via a selected focus group. The work with focus groups is a qualitative technique to find new service ideas e.g. via brainstorming (Alam, 2006). Our focus group was a group of people with similarities, all students, but also with differences, originating from Indonesia and Germany. This made the discussions and feelings about the product more multicultural and active. The discussions of the product were fluent and free, meaning nobody felt strange in presenting and talking about individual findings, ideas and feelings about the product. (Gustafsson & Johnson, 2003) The third step was to meet several times to brainstorm and discuss the individual ideas, to test their suitability for ICA and the product and to find solutions for the defects. Thereby the focus was on two idea dimensions, named as customer value, and realisability.[1] The gate meeting held in class was an additional process step for the authors and helpful in getting feedback for the generated ideas at this stage and gain further ideas from other groups. At the end, the authors have chosen two main ideas (1) the redesigning and development of the package and the (2) implementation of cooking-movies from customers in the ICA store and on the internet. At the fourth stage, the authors have chosen to implement and work further with the mentioned ideas and connect them with fitting theories to develop a strategy for a customer focused product and service development for ICA. The strategy for ICA will be presented in chapter 4.

3. Description of the Concept Finding for ICA

As mentioned in Chapter 2, the authors have undertaken several process steps to find a fitting new concept for the chosen product. Within this chapter, the authors are describing the concept finding process and the actual new and innovative developed service. The concepts are connected with several theories by Gustafsson and Johnson (2003), Gallouj and Weinstein (1997) and Michel et al. (2008). The subchapters are divided into the Hierarchy of Service Development by Gustafsson and Johnson (2003) shown in Figure 1, to structure this chapter in service development processes. The process is dynamic, which is symbolised by the arrow in the figure, meaning, the implementation of a chosen concept or strategy is never the end of the process. Testings and improvements must be done frequently by the company, to generate their success and improve their reliability. (Gustafsson & Johnson, 2003)


[1] Lars Witell, Karlstads Universitet lectured on the 12th of September

Excerpt out of 15 pages


New Service Development: A Case Study for the Swedish Supermarket Chain ICA
Karlstad University
New Service Development
Catalog Number
ISBN (eBook)
ISBN (Book)
File size
640 KB
service innovation, ICA, customer satisfaction, service performance, customer involvement, service maintenance, package improvement, customer interaction, quality lifecycle, service development
Quote paper
Doreen Kupke (Author), 2012, New Service Development: A Case Study for the Swedish Supermarket Chain ICA , Munich, GRIN Verlag,


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