Describing innovation in terms of the adoption of new technologies does not appear to best capture innovation in services. How are services innovative in different ways? This work discusses this question with reference to two specific examples of services, i.e. Uber and Netflix, with regard to their company history. For that purpose it describes conservative innovation diffusion patterns and describes the service innovation capability approach.
Table of Contents
1 SERVICES - THEORETICAL BACKGROUND
1.1 SERVICES – CHARACTERISTICS AND DEFINITION
1.2 THE SERVICE-DOMINANT LOGIC
2 INNOVATION – THEORETICAL BACKGROUND
2.1 INNOVATION TERM AND THE TRADITIONAL INNOVATION PROCESS
2.2 APPROACHES TO INNOVATION DIFFUSION
2.3 SERVICE INNOVATION APPROACH TO INNOVATION DIFFUSION
3 EXAMPLES: THE INNOVATIONS AND DIFFUSIONS OF NETFLIX AND UBER
4 CONCLUSION
Objectives & Core Topics
This essay explores how innovation in services differs from traditional, technology-centered models of innovation. The primary research goal is to understand how service innovations emerge and diffuse, moving beyond traditional "make-and-sell" paradigms toward models that account for interactivity, co-creation, and organizational flexibility.
- Theoretical characteristics and definitions of services.
- The Service-Dominant Logic (S-D Logic) as a shift in market perspective.
- Traditional vs. service-specific approaches to innovation diffusion.
- The role of the customer as a co-creator in service innovation.
- Practical analysis of innovation patterns using Netflix and Uber as case studies.
Excerpt from the Book
2.2 Approaches to innovation diffusion
First of all, it seems to be important to clarify the terms of diffusion and adoption, as these terms are often used interchangeably. While diffusion describes the spread over entire markets, adoption refers to individual purchase decisions. This shows that they are related, but have to be distinguished. Adoption focuses on the individual level and this individual‘s decisions concerning the purchase and use of an offering. It is a mental process of either positive (adoption) or negative (rejection) outcome (Bähr-Seppelfricke 1999). The aggregation of individuals’ decisions is carried out by the diffusion on market-level (Rogers, 2003).
Diffusion, as Rogers puts it (2003, p. 5), means:
„The Process by which an innovation is communicated through certain channels over time among the members of a social system”.
In 1962, Everett Rogers (cited as Rogers, 2003 in a more recent edition) proposed that the life cycle of innovations can be described using the ‘s-curve’ or ‘diffusion curve’. This diffusion research examines how ideas are spread among groups of people. Accordingly diffusion is determined by the conditions that increase or decrease the likelihood that members of a given culture will adopt an innovation, a new idea, product or practice. In the early stage of a particular innovation, the rate of adoption is low; however the diffusion rate accelerates until a market’s majority is reached. The S-curve model or diffusion-curve assumes that innovations spread by information transmission and geographical proximity.
Summary of Chapters
1 SERVICES - THEORETICAL BACKGROUND: This chapter defines services through academic dimensions such as potential, process, and results, and introduces the S-D Logic that redefines the relationship between goods and services.
2 INNOVATION – THEORETICAL BACKGROUND: This section covers traditional innovation processes, explains the diffusion of innovation according to Rogers, and presents specific service innovation frameworks, including the four-dimensional model.
3 EXAMPLES: THE INNOVATIONS AND DIFFUSIONS OF NETFLIX AND UBER: This chapter applies the previously established theoretical frameworks to map the innovation histories of Netflix and Uber, highlighting their reliance on interactivity and organizational flexibility.
4 CONCLUSION: The final chapter summarizes the findings, emphasizing that service innovation diffusion requires models that incorporate interactivity, supplier networks, and organizational response times.
Keywords
Service Innovation, Diffusion of Innovation, Adoption, S-D Logic, Co-creation, Netflix, Uber, Service Delivery, Innovation Process, Technology, Interactivity, Organizational Flexibility, Market Diffusion, Service Value Networks.
Frequently Asked Questions
What is the fundamental focus of this work?
The work examines the diffusion of service innovations, arguing that traditional technology-based models fail to fully capture the dynamics of service environments.
What are the primary thematic areas covered?
The themes include the definition of services, the Service-Dominant Logic, traditional and service-based innovation frameworks, and the practical application of these theories to real-world companies.
What is the central research question?
The essay explores how services are innovative in different ways compared to traditional goods and how these innovations diffuse within a market.
Which scientific methods are employed?
The author utilizes a literature review of existing innovation theories and a qualitative analysis/case study approach, mapping the development histories of Netflix and Uber against theoretical dimensions.
What is covered in the main section of the paper?
The main section establishes the theoretical foundations of services and innovation, then analyzes how Netflix and Uber successfully utilize a mixture of service dimensions and capabilities.
Which keywords characterize this paper?
Key terms include Service Innovation, Diffusion, S-D Logic, Co-creation, Netflix, Uber, and Innovation Frameworks.
How does the author view the role of the customer in service innovation?
The author identifies the customer as a vital "co-creator" of value, rather than a passive recipient of a service, which is a core concept of the S-D Logic.
Why are Netflix and Uber used as examples?
They are used to demonstrate how successful service innovators rely on a complex portfolio of innovation dimensions and capabilities rather than outperforming in just one specific area.
- Citar trabajo
- Felix Zappe (Autor), 2017, Diffusion of Service Innovation. Innovation patterns of the Netflix and Uber services, Múnich, GRIN Verlag, https://www.grin.com/document/358172
