Abstract The impact of technology has been rapidly changing the economy and environment in these past two decades. Both manufacturing and service companies which intend to maintain the viability of their organizations have to adapt in such an environment. For a long time, services have been perceived as being technologically backward and to take little initiative with respect to innovate. In general services were presumed to be laggards in adopting new technology, and to be largely passive adopter of major innovations; however, it was recognized that there are some exceptionally dynamic services – such as telecommunications. Service sector firms play important roles in innovation, not the least in the creative use and diffusion of technologies; but also serve as important sources and agents for the transfer of technological and organizational knowledge to all sectors. In innovation, knowledge plays a big role in gaining competitive advantage. There is a more fundamental need to understand how organizations create new knowledge in order to produce new products or services. Hence, the need – organizational knowledge – is growing in this turbulent economy of accelerated technological change. To create knowledge in an organization usually lies in an individual’s knowledge. This is called as tacit knowledge and is a significant point to innovate. Nonaka and Takeuchi (1995) had pointed out that an individual knowledge gets articulated and amplified into and throughout the organization. Moreover, there is a one way to bring about continuous innovation is to look outside and into the future, anticipating changes in the market, technology, competition, or product. The service sectors have been innovating gradually in Indonesia and Taiwan, particular in telecommunications after liberalized. In 2002, the Indonesia’s economy grew 3.66 percent from the previous year which the highest growth occurring in the transportation and communication sectors by 7.83 percent. In addition, the telecoms sector in Taiwan will contribute 63.1 billion new Taiwan dollars (1.9 billion US dollars) to Taiwan’s GDP annually over the next five years when the telecommunication market is fully liberalized. In this study will discuss about the innovation of cellular telecommunication services in Indonesia and Taiwan. By analyzing the service innovation process in MMS and Video Streaming from Indosat and Chunghwa, to figure out: 1. Where the new innovation concept comes from; 2. How they define theirs customer interface; and 3. How they develop theirs employees’ skills to deliver service. We also examine the linking between the company background and innovation. This could be their establishment time, objectives, macro economy point of view, and so on. It might be crucial points to encourage them to innovate. Key Words: service innovation, telecommunications service, innovation process / The impact of technology has been rapidly changing the economy and environment in these past two decades. Both manufacturing and service companies which intend to maintain the viability of their organizations have to adapt in such an environment. For a long time, services have been perceived as being technologically backward and to take little initiative with respect to innovate. In general services were presumed to be laggards in adopting new technology, and to be largely passive adopter of major innovations; however, it was recognized that there are some exceptionally dynamic services – such as telecommunications. Service sector firms play important roles in innovation, not the least in the creative use and diffusion of technologies; but also serve as important sources and agents for the transfer of technological and organizational knowledge to all sectors. In innovation, knowledge plays a big role in gaining competitive advantage. There is a more fundamental need to understand how organizations create new knowledge in order to produce new products or services. Hence, the need – organizational knowledge – is growing in this turbulent economy of accelerated technological change. To create knowledge in an organization usually lies in an individual’s knowledge. This is called as tacit knowledge and is a significant point to innovate. Nonaka and Takeuchi (1995) had pointed out that an individual knowledge gets articulated and amplified into and throughout the organization. Moreover, there is a one way to bring about continuous innovation is to look outside and into the future, anticipating changes in the market, technology, competition, or product. The service sectors have been innovating gradually in Indonesia and Taiwan, particular in telecommunications after liberalized. In 2002, the Indonesia’s economy grew 3.66 percent from the previous year which the highest growth occurring in the transportation and communication sectors by 7.83 percent. In addition, the telecoms sector in Taiwan will contribute 63.1 billion new Taiwan dollars (1.9 billion US dollars) to Taiwan’s GDP annually over the next five years when the telecommunication market is fully liberalized. In this study will discuss about the innovation of cellular telecommunication services in Indonesia and Taiwan. By analyzing the service innovation process in MMS and Video Streaming from Indosat and Chunghwa, to figure out: 1. Where the new innovation concept comes from; 2. How they define theirs customer interface; and 3. How they develop theirs employees’ skills to deliver service. We also examine the linking between the company background and innovation. This could be their establishment time, objectives, macro economy point of view, and so on. It might be crucial points to encourage them to innovate. Key Words: service innovation, telecommunications service, innovation process

Abstract Title: Innovation and its influence of LBS company: Jiepang in China Level: Final assignment for Master of Business Administration   Author: Yang OU, Zijian LI   Supervisor: Maria. Fregidou-Malama   Date: 2012-June   Aim: Chinese firms desire to win the market, and they should consider innovation. The aim of the study is to explore the effects of innovation for LBS firm to gain success in China. Method: The main research method is case study. Jiepang as our case company is a LBS firm in China. And we interview two persons from different department, and one is its co-founder. Result & Conclusions: Innovative action and behavior must cover whole organization, all employees should be participant. In China, LBS is a rising industry, but LBS firms face to many threats from competitors and substitutes too. Thereby in order to survive in the market and gain success, innovation is a very important strategy for LBS firm, but not the unique method.       Suggestions for future research: Open innovation process is becoming a hot topic currently, so how to innovate with customer or user, how to cooperate with them? And if the data collection can take from multi-cases, it would be make research result more convincing.         Contribution of the thesis: In this study, we introduce and popularize a new industry, LBS in China. And we give a deeper understanding of the importance of innovation and how innovation can improve the competitiveness of the company in this industry.

The concept service infusion implies that services are being included in a product-centric business to some extent. This movement towards integrating services will change how the business is performed in such a company; in other words, service infusion will lead to changes in the business model. This thesis aims to describe how service infusion affects the business in general and more specific effects in the business model. Volvo Trucks are somewhere in the process of service infusion and have several services offered to the market, such as Dynafleet, fuel advice, and driver training. In 2008, the service driver training was launched on the Romanian market and Volvo Trucks struggled with selling the service for a fee. This led to Volvo Trucks making the decision to start giving away the service for free. The objective of the service driver training was from the begging to sell it for a fee and the transition from service for free to service for fee is the main focus in this thesis. Through an analysis of the theoretical framework chosen for this thesis and a case study performed on Volvo Trucks, four success factors for the transition from free to fee could be identified: deep understanding of customers, show the value of the service, introduce sales commissions, and develop a pricing strategy. All these success factors are chosen to ease the transition from a service for free into a service for fee.

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Service innovation is increasingly becoming a basis for manufacturing firms to reach and sustain competitive advantages. While traditional product innovation typically includes how new technology can be utilized in new products, service innovation spans a broader area that is not exclusively focused on new technology, but rather how resources can be developed into value propositions and then integrated in the customer’s process in order to support customer value creation through realization. However, manufacturing firms that infuse services struggle with service innovation; this becomes especially evident in the realization phase. This thesis is a compilation of five papers discussing different aspects of service innovation realization and the inherited challenges. The study builds upon empirical data from four Swedish manufacturing firms that infuse services and develop new value propositions that include both products and services to support customer processes. The thesis illustrates realization as a phase in service innovation where the firm interacts with its customer in order to adjust, revise and further find new ways of improving the customer’s processes through for example customer training. Realization is characterized by a deployment phase and a post-deployment phase that represent the ongoing relationship between the customer and the firm. Depending on who has the competencies or ability to integrate the resources that are needed for service innovation, different interaction patterns are identified. Through indirect interaction, the firm facilitates the customer’s value creation through, for example, preventive maintenance, while through direct interaction the firm acts as a co-creator in the service innovation process and hence work jointly together with the customer in order to improve customer value creation. This thesis contributes to the literature by characterizing service innovation realization and by increasing the understanding for different interaction patterns in the service innovation process.

The Thai automotive industry was the third largest industry in the country and contributed nearly 12% of Thai GDP in 2010. Thailand is projected to be in the world’s top ten vehicle production countries by 2015. In 2011, the country produced 1.8 million vehicles and 600,000 units were for domestic consumption. The luxury car industry in Thailand represents roughly 5% of the total automotive market in 2011. Luxury car consumption in Thailand reached its peak in 1995 with the domestic consumption of 23,265 units. In 1997, Thailand triggered the world economic meltdown by devaluing the Thai currency. Consequently, luxury car sale volume then dropped to 3,383 units in 1998. Since then Thailand’s automotive industry has gone through a series of changes through political unrest (military coup – 2007, red shirt protest - 2010), global economy (US sub-prime crisis - 2008), and natural disaster (Japan’s tsunami – 2011, Thailand’s mega flood – 2011). For the past decade, luxury car sales volume has stagnated at around 10,000 units, despite Thailand’s GDP averaging growth of 7%. The study of the Thai luxury car industry provides a unique opportunity to probe the industry led by international firms entering fierce competition to win local consumers. This study looks through consumers’ buying criteria and reasons why Thai consumers purchase highly priced luxury cars. The study explores the roles of innovations in the Thai luxury car industry. When services are packaged with core products, this package attempt is classified as ‘service encapsulation’. The study explores the role of service encapsulation in Thailand and the key players who deliver values of service encapsulation. A mixed research methodology approach was used, starting with 30 face-to-face interviews with executives who run Thai luxury car companies and other key stakeholders. Findings and outcomes are used to design the questionnaire of ‘Service Encapsulation in Thailand Luxury Car Industry’. The survey includes 206 survey participants. Outcomes from the qualitative and quantitative parts are integrated with the literature on innovation and service innovation to come up with a Service Encapsulation Commercialization Framework. The framework aims to provide insight on the interplay among four key elements: internal parties, external parties, social factors and service encapsulation enablers, based on the original work of Sundbo and Gallouj (2000). The study provides insights on how organizations can maximize returns on innovation through service encapsulation, by using the Thai luxury car market as a case study.

In the last two decades, Innovation in healthcare has brought about a significant transition from the conventional methods relating to activities within the healthcare system such as medical record journaling and patient diagnosis and additionally to the way clinical care is delivered to the patients. Service innovation as opposed to product innovation is the integration or positive increment of new or existing services cumprocesses in the system through the introduction of new methods, techniques, or abstract services. Healthcare industry is primarily a service driven sector. As compared to other industries it is unique given its setting. It is emotionally vulnerable, highly sophisticated and encounters life-death situations on a daily. Service innovation holds the key for large private multi-speciality to move forward.As of now, numerous challenges plague the healthcare sector such as increased healthcare costs, reduced monetary and ethical quality of clinical value care. Service innovation holds the key especially for large private multi-speciality to move forward towards. Inclusion of ancillary services such as rehabilitation,testing, nursing, emotional care coupled with digital service innovation (Telemedcine, Electronic health records, billing systems) overcome challenges of efficient billing, remote diagnosis, emotional burnout, and high medical expenditure for patients.The purpose of this thesis to underline the need for service-based innovation and its framework in correlation to a complex healthcare system. Case of an upcoming super-speciality Venkateshwara hospital located in New Delhi, India is analysed to answer the research question and understand theoretically the conflicting nature of barriers of different stakeholders involved in the process. Currently, most literature is centred around the importance of product innovation, with lacking focus on concept of service science. The study fills the gap by providing an exhaustive approach of defining service-based innovation within healthcare setting and addressing difference between product drive logic and service dominant logic. Additionally, a new service model is implemented utilizing NK Kauffman model and Greenhalgh’s (2008)eight pillar model.Since the Hospital is a private entity, paradox specific to healthcare that is “ethical vs economical” conundrum is assessed through primary empirics. Complexity of a tertiary healthcare organization is addressed in relation to the level of interrelatedness between services innovation. Venkateshwara as a multispeciality service system ranks into a highly complex organisation with high interrelatedness between varying components. Study is qualitative with explorative nature. Primary data is collected via semi-structured interviews and physical observation of the organization, while secondary data is collected via official website and brochures. Triangulation method serves the purpose of data analysis and rigour. Data Analysis section uses thematic coding to generate themes and complexity of Venkateshwara Hospital is mapped through component and interrelatedness graph.The discussion section puts forth detailed overview of over-arching and sub-themes coupled with collected data(Primary and secondary) to highlight the significance in need for service innovation. Results formally answer the research question. New services such as value-based care and telemedicine are discussed. Challenges specific to Venkateshwara hospital are put forth and categorized by needs of different stakeholders when implementing the service innovation framework. Concluding remarks include future need of service innovation. Lastly, theoretical, and practical implications of the study are provided.

As Chinese economy develops, service innovation has become a key element for which Chinese enterprises compete and upgrading of service industry all over China due to its influence on national economic competitiveness, among which the innovation of multi-agent service plays an important role in enterprises. This thesis mainly studies the concept of the Multi-agent Participate Model of Service Innovation and explores the strategic role and position of the model in communication industry. The purpose of this thesis includes two parts: firstly it studies the service innovation which multi-agent such as enterprises, customers and suppliers participate in so as to establish a new theoretical framework of such service innovation. Secondly, from the perspective of strategic management of enterprises, it considers the selection of Multi-agent Participate Model of Service Innovation in competitive strategies of the communication industry to clarify the strategic role and position of such model in management of the communication industry. Questionnaire and interview are two main data acquisition methods in this thesis. The author surveyed 100 employees from China Telecom with a questionnaire designed by herself. The data shows that customers’ demands for market and competitors’ competition in the market have a great influence on the innovation activities of enterprises. Some senior managers of China Telecom have been interviewed for this study. The interviews have shown the significance of Multi-agent Participate Model of Service Innovation in telecommunication industry and the Multi-agent Participate Model of Service Innovation can favorably be applied to telecommunication industry. The enterprises, customers, employees, managers and suppliers are of inseparable relationships in the model. As an innovation model of enterprises, Multi-agent Participate Model of Service Innovation can better mobilize enthusiasm of each participant of service innovation, and innovativeness of management service to clarify the strategic position of the model in enterprise management.

Crafting and stimulating service innovation is considered a main research priority and remains a challenge for service providers. One suggested component of stimulating service innovation is customer creativity. Customers who adapt, modify and transform services or products to better suit themselves are increasingly being recognized as a source of competitive value and innovation. It has been proposed that understanding and supporting the customer’s value creating practices is the key to creating and sustaining value over time in health care. Health services directly address a customer’s well-being and have a significant impact on his or her quality of life. In these types of services, the service outcome is highly dependent on the activities of the individual customer. Health care services often require customers to participate extensively, over long periods of time, with limited support and control. Health services also stretch far beyond the particular service setting into the customer’s daily life. While research, policy, and legislation have all emphasized the active role of health care customers, such customers have traditionally had few opportunities to design their health care services. Nevertheless, health care customers solve health-related problems and engage in self-care and medical decision-making on a day-to-day basis, although this creativity is often unknown to the service provider. To understand how health care customers can enable service innovation, this thesis seeks to conceptualize and investigate the concept of customer creativity in health care. The thesis focuses on customer creativity, not only as an outcome, but also as a dynamic and contextualized process that can be enhanced. The thesis combines insights from health care research with service and innovation research to provide build a framework for health care customer creativity. Building on five papers, the research develops an understanding for health care customer creativity. The individual papers are based on systematic literature reviews as well as empirical data in the form of customers’ ideas for service innovation collected through diaries. The results of the thesis suggest that despite the negative nature of the service, health care customers are creative. Given the opportunity, health care customers can provide creative ideas and solutions on a multitude of aspects, both within and outside the health care setting. This provides the potential to view the health care experience through the customers’ eyes and take part in their creativity in spheres where the service providers have not traditionally had any access. This thesis contributes to the literature by providing a framework for health care customer creativity that recognizes the concept as a complex interplay of factors operating at the individual, contextual, and situational levels. The proposed framework specifies the health care specific factors upon which customer creativity depends, with the intention of positing potential research directions and developing an enriched theory of health care customer creativity.

Research focusing on service innovation has seen a significant growth in the last two decades, yet the research on KIBS innovation - and especially on innovation in the creative industries, like advertising - remains rather limited. Due to the increasingly competitive business environment, how KIBS firms co-create with their clients to develop more innovative products or services is becoming more important. Therefore, this research uses the UK advertising industry as a basis to explore the nature of advertising innovation, the service innovation process and the co-creation within it, and how KIBS project innovativeness influences new service development. The literature on service innovation, co-creation and innovativeness involved in developing services or products provides the theoretical foundation for this research. It uses multiple case studies methodology and is based on 45 interviews with advertising managers. The findings of this thesis can be divided into three key areas. First, this study conceptualises the advertising innovation and advertising innovation dimensions and identifies the importance of content innovation and two-sided interface in advertising innovation. Second, the innovation process in the advertising industry can be divided into five phases: the problem diagnosis phase, the creative process, the production phase, the commercialisation phase, and the evaluation and learning phase. (In more detail, the innovation process can be divided into fourteen development stages: client brief, understanding client business, problem diagnosis, strategy planning, creative briefing, idea generation, idea testing, idea selection, idea amplification, production, testing, launch, evaluation, and learning.) This research examines what is meant by co-creation, and identifies how co-creation changes over the course of the service innovation process - where co-creation activities and tasks, and the roles of service firms and their clients, vary across stages of service production. It finds that co-creation between advertising companies and their clients follows a 'W-shaped' curve pattern, with the most intense co-creation in the problem diagnosis phase and the least in the production phase. (The practitioners in these KIBS assert that having too much co-creation activities in the idea generation stage tends to develop uncreative ideas.) Third, as the tasks of KIBS are to fuse generic knowledge with local and special knowledge related to specific problems, to develop problem solutions for their clients, this study conceptualises KIBS project innovativeness as involving two parameters: (1) the knowledge and experience of the problem itself (which relates to problem novelty); (2) the knowledge and experience of developing innovative solutions (solution innovativeness), and explores how KIBS project innovativeness influences new service development. Based on the analysis of KIBS project innovativeness, this study develops a typology of project development in KIBS firms, which includes four types of projects: routine project, new project, solution-led project, and innovative project. This research contributes to understanding the nature of service innovation and co-creation by providing a more thorough understanding of the role of co-creation in the overall new service development process. It also shapes our understanding of KIBS project innovativeness and how it influences new service development.