Work

Only the Brave: Product Innovation, Service Business Model Innovation, and Their Impact on Performance

Year: 2014

Type: article

Abstract: Recent empirical findings concerning the performance effects of service business model innovation (servitization) and its interplay with product innovation are mixed. Using the lenses of the demand‐based view on value creation and complementarity, the performance impact of two key service business models is examined: the product‐oriented model and the customer‐oriented model, implemented jointly with product innovation. Results indicate that the interplay between service business model innovation and product innovation results in long‐term performance benefits coupled with a degree of short‐term performance sacrifice. Service business model innovation in isolation from product innovation results in short‐term profit gains but long‐term knowledge loss and, thus, market performance decline. Our study suggests that firms need to look beyond the evidence on short‐term effects in order to achieve superior performance in the long run.

Source: Journal of Product Innovation Management

DOI: 10.1111/jpim.12254

Authors: Ivanka Visnjic, Frank Wiengarten, Andy Neely

Institutions: Esade, University of Nottingham, University of Cambridge, London Business School, Cranfield University

Language: English

Topic: Service and Product Innovation

Subfield: Marketing

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Industry, innovation and infrastructure

Open Access status: bronze

Funder: British Academy of Management