Unraveling the Service Innovation Dilemma: The Promise of Network Embeddedness

HANDBOOK OF RESEARCH IN MASS CUSTOMIZATION AND PERSONALIZATION

Posted: 26 Apr 2010

See all articles by Ikenna S. Uzuegbunam

Ikenna S. Uzuegbunam

Ohio University

Satish Nambisan

Rensselaer Polytechnic Institute

Manli Chen

Rensselaer Polytechnic Institute (RPI) - Lally School of Management & Technology

Date Written: December 30, 2009

Abstract

Service innovation, unlike product innovation, is not easily scalable in the production process. In general, as firms attempt to grow, one potential direction for growth is through a firm's ability in applying the same processes and resources used for a single unit of production to larger volumes, thus saving costs through economies of scale. Whereas product-oriented companies can easily achieve cost reduction through scientifically tested and validated operational processes for product innovation, the peculiar nature of services do not permit such formal processes to be applied to service offerings. In this chapter, we identify network approaches through which firms engage the "service innovation dilemma" - the problem of diseconomies of scale in a world of increasing demand for services. We argue that firms can develop sustainable competitive advantages in service through "real" and "virtual" embedded inter-firm and customer co-creation (market) mechanisms. We conclude with some implications for theory and practice in services and related innovations.

Keywords: Mass Customization, Personalization, Engineer-to-Order, Open Innovation, User Co-Creation, Modularity; Platform Design, Customer Centricity

Suggested Citation

Uzuegbunam, Ikenna S. and Nambisan, Satish and Chen, Manli, Unraveling the Service Innovation Dilemma: The Promise of Network Embeddedness (December 30, 2009). HANDBOOK OF RESEARCH IN MASS CUSTOMIZATION AND PERSONALIZATION . Available at SSRN: https://ssrn.com/abstract=1594621

Ikenna S. Uzuegbunam (Contact Author)

Ohio University ( email )

Copeland Hall
1 Ohio University
Athens, OH 43147
United States

Satish Nambisan

Rensselaer Polytechnic Institute ( email )

Troy, NY 12180
United States

Manli Chen

Rensselaer Polytechnic Institute (RPI) - Lally School of Management & Technology ( email )

110 8th St
Troy, NY 12180
United States

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