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Need
Innovation in services
Services innovation Challenges in measuring - make it hard to assess Nature of services 4 unique characteristics
Innovation in services
Mostly - small & incremental changes in process and procedures Easier to imitate Do not require much R&D Do not need to invest much in fixed asset Do not need to spend much on buying patents and licenses
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something new
save money
incremental or radical
Radical innovation (high-risk-high-return) - new customers, underserved markets, going a step above, new class of services, fill an obvious gap in the marketplace, steer markets in new directions Incremental innovation (low-risk-low-return) - knowledge and resources , modest technological changes to remain competitive
Growing competition - destination for international trade - crucial to enhance national competitiveness - administrative reforms and innovations. Transform traditional public service into a dynamic, customer-driven, and result-oriented administration (Sarji, 1996) New pay & performance appraisal system, total quality management, ISO 9000 series, benchmarking, performance measurement, modified budgeting system (MBS) and the clients charter.
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Public sector - inefficiency, red tape, lack of flexibility, ineffective accountability and poor performance.
Contemporary administrative reforms - new public management (NPM) advocates - application of market logic within the public sector for solving problems of big and inefficient government.
Downsizing (reducing budget and staff of public agencies), deregulation & employee empowerment
Improving quality of regulation and the management of human resources Private sectorstyle management and flexibility;
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Public management reforms in Malaysia (1981-2005) The Malaysia incorporated policy Downsizing the civil service Service process reengineering Personnel and financial management reforms Clients charter and public accountability Quality and productivity improvement drives IT culture and e-government
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Product Innovation - new way to solve the customer's problem - through a new product or service development - benefits both parties
Process Innovation - increase profitability, reduce costs, improve efficiency, raise productivity, and increase employee job satisfaction
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2) Implementation Service development and testing: Conduct service prototype test Market testing: Test service or other marketing mix elements Commercialization Post introduction evaluation
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New services for a market that is already served by existing products that meet the same generic needs On-line transaction, new retailing models
Offer existing customers - service not previously available Addition to current product lines by existing firms Retail banks that adds insurance services, health club offering nutrition classes, airline offering fax, phone and internet service during flight new ways of delivering products - more convenience & different experience for existing customer or attracting new customer who find the traditional approach unappealing Barnes & nobles added new internet subsidiary barnesandnoble.Com to compete with amazon.Com
Adding new facilitating or enhancing service elements to existing core service Adding parking at a retail site, Agreeing to accept credit cards for payments, Restaurant adding new menu items, Airline offering new routes
Service improvements
Most common type of innovations Changes in features of services that are already offered: Airline adding power sockets for laptops in its business-class cabins, Faster service process, Extended hours of service
Style changes
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Represent the most modest service innovation: Changing color scheme of restaurants, Website redesign, New uniforms for employees