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NSD success factors innovative versus incremental in
Pakistan Fast Food Industries
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INNOVATION
Innovations are the outcome of a
professionally-managed organizational
development process in which R&D and
entrepreneurship often are combined with
quality, effective leadership, sound employee
management and critical market
considerations (Ottenbacher et al., 2006; Trott, 2005).
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INNOVATION (contd.)
Innovation covers all activities which yield newor improved products or ways of doing things.
Innovation is the process and outcome of creating
something new, which is also of value.
Innovation involves the whole process fromopportunity identification, ideation or invention to
development, prototyping, production marketing andsales, while entrepreneurship only needs to involvecommercialization (Schumpeter).
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INNOVATION (contd.)
Schumpeter argued that innovation comes
about through new combinations made by an
entrepreneur, resulting in
a new product,
a new process,
opening of new market,
new way of organizing the business
new sources of supply
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Dimensions of innovation
There are several types of innovation
Process, product/service, strategy,
which can vary in degree of newness: Incremental to radical,
and impact:
continuous to discontinuous
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Types of Innovation
Radical innovation is driven by technology the systematic application of scientific
knowledge to practical purposes. Incremental innovation is associated with
continuous improvement.
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Elements of Innovation
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New Product Development
New product development (NPD) is the term
used to describe the complete process of
bringing a new product or service to market
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Intangibility:
this characteristic
best differentiatesproducts fromservices
Ownership:
a pure service
also does nottransfer theownership of atangible item tothe customer
Heterogeneity:
services tend to
beheterogeneous;i.e. they arecustomized tothe specificneeds of the
recipient
Perishability:
Services are
usually createdas they areused, whileproducts can bemade ahead oftime and held in
inventory ordistributionsupply chain
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Differences between Products and Services
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Products and services can be viewed as layers because many
products have services embedded in them and vice versa
A single layer can be a physical product that is exchanged forpayment. The relationship between buyer and seller starts and
ends with the sale
Multiple layers would be services that consist of dialogues
between service providers and clients, e.g., consultation or
travel information
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Products Vs Services
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Tangibility Spectrum
Tangible
Dominant
Intangible
Dominant
Salt
Soft Drinks
DetergentsAutomobiles
Cosmetics
AdvertisingAgencies
AirlinesInvestment
ManagementConsulting
Teaching
Fast-foodOutlets
Fast-foodOutlets
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New Service Development Cycle
People
Technology Systems
Product
Full Launch Development
Design Analysis
Tools
Enablers
Formulation
of new services
objective / strategy
Idea generation
and screening
Concept
development and
testing
Business analysis Project authorization
Full-scale launch
Post-launch review
Service design
and testing
Process and system
design and testing
Marketing program
design and testing Personnel training
Service testing and
pilot run
Test marketing
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New Business Models Emerge
Then
One IntegratedCompany
Now
Many Distributed Companies
ProductDevelopment
Cycle
ProductDevelopment
ToolCompanies
TestingServices
CROs CRMs
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Levels of Service Innovation
New service development projects range from a totally
new or discontinuous innovation to a service involving a
minor adaptation or improvement that is of an
incremental nature. (Griffin, 1997; Booz Allen Hamilton, 1982)
with tangible goods, the innovativeness of a new servicemay be defined by the degree of newness it has relative
to the outside world and the firm itself(Olson et al., 1995)
NSD projects can be dichotomized into incremental and
discontinuous innovations (Olsen and Sallis, 2006; Song andMontoya-Weiss, 1998)
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Levels of Service Innovation (contd.)
Booz Allen Hamiltons categories were developedfor manufactured goods, these definitions havebeen adapted for service innovations (Johne andStorey, 1998)
New to the world services
New Service lines
Addition to an existing service lines
Improvements & revision of an existing lines Repositioning
Cost Reduction
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Major Innovation: new service driven by informationand computer based technology
Start-up Business: new service for existing market
New Services for the Market Presently Served: newservices to customers of an organization
Incremental Innovations
Service Line Extensions: augmentation of existingservice line (e.g. new menu items)
Service Improvements: changes in features of currentlyoffered service
Style Changes: modest visible changes in appearances
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Methdology
Data Gathering
Sample
Tool
Analysis Tool
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Learning Objectives
Discuss the new service development process.
Prepare a blueprint for a service operation.
Describe a service process using the dimensions
of divergence and complexity.
Use the taxonomy of service processes to classify
a service operation. Compare and contrast the generic approaches to
service system design.
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Structural Alternatives for a Restaurant
No Reservations
Self-seating. Menu on Blackboard
Eliminate
Customer Fills Out Form
Pre-prepared: No Choice
Limit to Four Choices
Sundae Bar: Self-service
Coffee, Tea, Milk only
Serve Salad & Entree Together:Bill and Beverage Together
Cash only: Pay when Leaving
TAKE RESERVATION
SEAT GUESTS, GIVE MENUS
SERVEWATER AND BREAD
TAKEORDERS
PREPAREORDERS
Salad (4 choices)
Entree (15 choices)
Dessert (6 choices)
Beverage (6 choices)
SERVEORDERS
COLLECT PAYMENT
Specific Table Selection
Recite Menu: Describe Entrees & Specials
Assortment of Hot Breads and Hors Doeuvres
At table. Taken Personally by Maltre d
Individually Prepared at table
Expand to 20 Choices: Add Flaming Dishes;
Bone Fish at Table; Prepare Sauces at Table
Expand to 12 Choices
Add Exotic Coffees; Sherbet between
Courses; Hand Grind Pepper
Choice of Payment. Including House Accounts:
Serve Mints
LOWER COMPLEXITY/DIVERGENCE CURRENT PROCESS HIGHER COMPLEXITY/DIVERGENCE
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