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

By Ivanka Visnjic, Frank Wiengarten, Andy Neely. 2016

465 citations recorded by the source corpus.

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.

Subfields: Computer Science Applications, Management of Technology and Innovation, Marketing

View Paper: https://www.semanticscholar.org/paper/45c4443dad29f760c8e7664b3ac6eb12854274e1

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Computer Science Applications

1. S. Heidenreich

In Management of Technology and Innovation

1. Emmanuel Milet
2. Fabian Futterer
3. Ferran Vendrell‐Herrero
4. Esteban Lafuente
5. Jochen Schmidt
6. S. Heidenreich
7. Y. Vaillant
8. M. Crozet

In Marketing

1. Emmanuel Milet
2. Ferran Vendrell‐Herrero
3. Esteban Lafuente
4. S. Heidenreich
5. Y. Vaillant
6. M. Crozet

Citations in the corpus

• Working Paper (2015, background): “We also omit rms that stop selling services to avoid mixing 20Eggert et al. (2011) and Visnjic et al. (2014) show that servitization is more likely to generate better performance when it is coupled with product innovation.”
• Effectuation or causation as the key to corporate venture success? Investigating effects of entrepreneurial behaviors on business model innovation and venture performance (2017, background): “Such business model innovation (BMI) is particularly important as it has the potential to improve corporate performance (Kim andMin, 2015; Lambert and Davidson, 2013; Visnjic et al., 2016).”
• Product-service innovation and performance: the role of collaborative partnerships and R&D intensity (2019, unknown): “that, in changing business environments, product-service innovation reduces consumer uncertainty in facing new technologies (Christensen, 2003; Suarez, 2004), informs product developers (Visnjic et al., 2016) and increase firm resilience (Ariu, 2016).”
• Territorial servitization: Exploring the virtuous circle connecting knowledge-intensive services and new manufacturing businesses (2017, background): “including more stable revenues, higher growth rates and superior long-term profitability (Smith et al., 2014; Cusumano et al., 2015; Rabetino et al., 2015; Visnjic et al., 2016).”
• Should everybody be in services? The effect of servitization on manufacturing firm performance (2017, unknown): “This measure is commonly used in the literature to assess firm performance (Suarez et al., 2013; Visnjic et al., 2016).”