Service Innovations

Topics: Printed circuit board, Economics, Dot-com bubble Pages: 1 (303 words) Published: February 22, 2013
Service innovations are likely to be very important throughout knowledge-based economies. Critically discuss. Illustrate your answer with reference to two practical examples of your choice. Service innovation is a new or improved service concept that is taken into practice. It takes place mainly in two ways: through service products and through service processes. There has been a shift from perception of innovation from products to services, beginning from late 1990s with the service nature of many dot-com companies. Services will eclipse products as the main venue for innovation over the next decade. Knowledge-based economies largely encompass business services based on technical knowledge and professional knowledge. These services are known as knowledge intensive business services (KIBS). The types of knowledge generated by KIBS include diagnostics, informative, facilitative, advisory and managerial knowledge. From this, we can infer that in knowledge-based economies, businesses are no longer simply just providing a product, but also incorporating services in their offerings to the customers. Not coincidentally, most manufacturers are moving towards service innovation, as manufacturing is becoming less profitable in many advanced economies; hence manufacturing firms are more and more concentrating on “service delivery”. By bundling products into services and systems, manufacturers can enhance customer value and regain competitive advantage in the market. Manufacturing is currently being redefined, where it is becoming the provision of complete service over the whole product lifecycle. One example is Xerox, which realised that photocopying machines were too expensive for customers to afford. They have instead sold leases which include maintenance and servicing. The other example is Flextronics International. It is manufacturer and assembler for printed circuit boards, electromechanical components, subsystems, and complete systems for a wide range of makers of...
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