SM - Innovation in Services Flashcards
What are the key drivers for change in the service industry? FUCSPRO
Fashions & Trends (Consumer Tastes)
Unexpected Shocks (Crisis‑Driven Agility)
Competitors (Disruptors & Incumbents)
Seasonal Patterns (Demand Fluctuations)
Perishability (Unsold Capacity)
Regulations (Compliance Mandates)
Opportunities (New Technologies & Business Models)
Q: Define crowdsourcing for innovation. How does it differ from crowdfunding?
Crowdsourcing Innovation is the practice of soliciting ideas, solutions, or feedback from a large, often online, community to drive new products or services
It is not crowdfunding, which sources money rather than ideas or labour
Q: How did Starbucks use crowdsourcing on MyStarbucksIdea.com, and what were the outcomes?
(Zhoa and Zhu 2020)
Launched in 2008, the platform let customers submit and vote on ideas, becoming “idea partners” in product development
Over its first five years it received 150,000+ ideas and implemented 277 (e.g., Cake Pops, Hazelnut Macchiato, free Wi‑Fi)
Critical Insight: High engagement boosted brand loyalty, but required substantial moderation to align with Starbucks’ brand strategy
Q: What positive impacts does crowdsourcing have on firms and customers?
Perceived Novelty & Customer Benefit: User‑generated ideas often score higher on novelty and benefit than professional ideas (though slightly less feasible)
Sales Uplift: Design crowdsourcing correlates positively with unit sales, especially when initial concept quality is high
Co‑creation Engagement: Involving customers deepens brand relationships and accelerates time‑to‑market
Q: Describe the hierarchy of new service categories (Wirtz & Lovelock 2007)
Style Changes: Cosmetic or script adjustments.
Service Improvements: Modest performance enhancements.
Supplementary Service Innovations: New/enhanced facilitating or enhancing elements.
Process‑Line Extensions: Alternative delivery procedures
Outline the key steps in using crowdsourcing to source service innovations.
Define Challenge—craft clear problem statements.
Platform Setup—select or build an online crowd‑engagement portal (e.g., MyStarbucksIdea)
Idea Submission & Voting
Screening & Partnering—appoint “idea partners” to triage submissions.
Prototype & Test—develop and pilot top ideas.
Commercialize—roll out successful innovations and provide feedback to contributors
Q: What are the main drawbacks of crowdsourcing innovation?
Idea Overload: High submission volume demands extensive filtering
Quality Control: Not all ideas align with strategic goals or feasibility requirements
IP & Ownership: Clear legal frameworks are needed to assign rights and avoid disputes
Sustaining Engagement: Long‑term participation drops after novelty wears off
What practices maximize success when crowdsourcing service innovations?
Clear Guidelines & Incentives—define submission criteria, rewards, and recognition
Robust Platform & Moderation—ensure an intuitive interface and active community management
Transparent IP Policies—use straightforward contributor agreements to build trust
Fast Feedback Loops—keep contributors informed on idea status and next steps
Integration Roadmap—establish clear pathways from idea to prototype to commercialization
