Logical process of introducing a new service
To introduce an online purchase service the first thing done is to advertise the new service in the company’s website. This will inform the clients about the new service of the company. The next thing done is to have the new service tested by clients. In this stage the company will allow the clients to understand the new service and make comments on its efficiency. The service blueprint would assist in evaluating the product if it helps the clients and responds to their needs. The service blueprint will countercheck of the new service has achieved the goals towards the clients. The last thing done is to fully implement the service. In this part the company will fully use the service after testing and responding to suggestions. New service development is fundamental to achieving corporate growth goals. Growth in profits and enhanced shareholder value are central objectives of most firms' strategic plans. But increased profits can only come from two sources: reduced costs or increased revenue (Kasper, Van Helsdingen & Vries Jr., 1999). The dilemma is that the cost- cutting side of the equation has already occurred: Companies are lean and mean, and hence there is little opportunity to squeeze extra profits from further cost-reduction efforts. At the same time, many service companies operate in mature markets, thus limiting revenue growth from increasing market size (Cooper & Edgett 1999).
Still, senior management demands that aggressive growth targets be met. How? Development of new services designed to increase market share or to attack new markets must be a major contributor. At first glance, what does new mean? It may seem like a simple question, but it is cause for debate and confusion in many service organizations. Many would argue that most new services are versions of existing services or copies of competitors' products. Companies have found themselves debating whether or not they really have new services at all. Internally the word service has caused difficulty very often it was associated with serving the customer or delivering the product. A solution has been to use the word project. Thus the development process is seen as one to develop and manage projects that have an impact on the custom. The act of supplying a service is virtually inseparable from the customer's act of consuming it. Thus, the organizational structures of service firms more seriously affect the development process than those of firms that produce tangible goods. New service development is an interactive process; it involves all departments in the company because each has a specific part to play in the ultimate delivery of the service (Lowe 2004). Because a new service offering must be integrated with existing ones, more planning is required for new services than for launches of physical products. This lack of flexibility in service production must be compensated for, which in turn entails a higher level of integration among operations, employee training, and marketing to develop a production and delivery system that will avoid wasted service capacity. Service innovations can be minor or modifying or updating an existing service or they can be major, based on entirely new technology platforms, such as combining mobile and line-based phones into one system (Fuglsang & Sundbo 2002).
Regardless of the nature of the innovation, the fact remains that rapid and successful new service development has become a vital business endeavor. The dilemma faced by management is that the need for new service development is stronger than ever, but organizations themselves do not have the tools and methods to bring new services to market The drivers of new service performance such as strategy, resources, and process all need to be in place and working together for the realization of the superior performance results most executives are searching for (Daniels 2004). To successfully develop new services an organization must have an effective development process in place. Many executives say they want and need to develop new services. Unfortunately, many of these same people will also admit that their organizations are lacking an effective service development process. If a company is thinking about overhauling their development process, it must remember the three cornerstones that lead to strong performance results: a clearly articulated new service strategy, commitment of adequate resources, and a high-quality development process. The new service development process and the activities that occur throughout the process have a strong impact on how successful the organization is at developing winning new services. However, the benchmarking results have raised a warning flag. The process itself is not the final answer; it is how the process is executed that makes the difference. Many organizations either do not have a complete process in place, or they suffer from lack of quality in execution. Designing and implementing the new service development process is one step on the road toward more effective and timely development efforts. Many organizations are facing increased pressure to reduce cycle time and simultaneously improve the effectiveness of their new service development process. Many organizations have successfully tackled the different challenges by building into their processes the many lessons they have learned from previous successes and failures (Bassett 2003).
Bassett, G 2003, Operations management for service industries:
Competing in the service era, Quorum Books, Westport, CT.
Cooper, RG & Edgett, SJ 1999, Product development for the
service sector: Lessons from market leaders, Perseus Books,
Daniels, PW 2004, Service industries: A geographical appraisal,
Fuglsang, L & Sundbo, J (eds.) 2002, Innovation as strategic
reflexivity, Routledge, London.
Kasper, H, Van Helsdingen, P & Vries Jr., W 1999, Services
marketing management: An international perspective, John Wiley &
Sons, New York.
Lowe, SC 2004, Marketplace masters: How professional service
firms compete to win, Praeger, Westport, CT.
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