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Created by Adminsske on 13 May 2012, at 17:30

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Service businesses now make up about 70% of the aggregate production and employment in the OECD nations, yet true innovation is rare in the service  sector. Many companies incrementally improve their offerings, but few succeed in creating service innovations that launch new markets or reshape existing ones. By thinking about a service in terms of its core benefits and the separability of its use from its production, managers can more easily see how to  ut-innovate their competitors. Before they can do so, though, they must understand the different types of market-creating service innovations as well as the  actors that enable them. Introduces and describes a two-by-two matrix whose taxonomy helps managers think strategically about service innovations that  can create new markets. The dimensions of the matrix refer to the type of benefit offered and the degree of service separability. References best-practices  xamples to illuminate each cell of the matrix and explain the value of understanding the dynamics of the cell that is most applicable to a service innovation effort.

Many companies make incremental improvements to their service offerings, but few succeed in creating service innovations that generate new markets or reshape existing ones. To move in that direction, executives must understand the different types of market-creating service innovations as well as the nine factors that enable these innovations.

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Published in Winter 2006 in the MIT Sloan Management Review, vol. 47, no. 2

  

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