Holistic Innovation – Fusion of Product and Service Innovations

Abstract: The successful creation of innovations is considered to be one of the key factors for companies to generate sustainable competitive advantages and corporate growth. But the exclusive focus on creating smashing new product innovations barely accounts for achieving these economic targets. Therefore more and more companies seek for new ways to enlarge the customer value and the related product success by enhancing products with suitable service innovations. The classic example is Apple´s iPod and the integration of comprehensive service offers by iTunes.

Driver:
Social
Time is becoming a scare good for more and more people. Seeking for more quality of life they increasingly turn to services, which offer support in handling everyday life. Holistic solutions, integrating products and service innovation, reduce complexity and therefore can help saving time.
Economic / Industrial
The growing competitive pressure, particularly in the consumer goods industry has increased the overall quality standards. Products become less and less distinguishable. With the offer of service innovations and fascinating worlds of experience companies hope to set themselves apart from their competitors.

Indication:
Change in current innovation patterns
The complementation of product innovations with service innovations is increasingly gaining importance due to factors of differentiation and customer demands. In order to develop successful holistic concepts, companies might have to optimise and eventually rethink their ways of creating innovations, in particular concerning the integral organisation of product and service development departments.
Potential “innovation wild card”
“Service is everything”: Imaginable is e.g. radically green economy, where individual consumers rarely buy products (e.g. cars), but rather pay for the usage of products. This would boost the importance of service innovations.

Source:
Scientific Literature
SHELTON, R., (2009), Integrating Product and Service Innovation: Industry leaders complement their product offerings with service innovations to boost overall customer value, in: Research Technology Management, Issue May – June 2009, p. 38 – 44