In the Organization for Economic Cooperation and Development nations, services contribute over 70% to the total gross domestic product and employment. Unlike product businesses, services require a unique graphic that places customer experience at the center of the value chain. Additionally, open innovation approaches differ in services due to the distinctive role of customers in these types of businesses.
It is difficult for customers to accurately articulate their desires for intangible services. In order to develop these services, customers may need to be involved in the innovation process. We find it intriguing that customers are typically less influential in product-based businesses compared to service-based businesses. Ideologically, shouldn't customers have equally significant roles in both types of businesses? Additionally, Chesbrough uses a curious writing style where instead of giving direct commands,
...he proposes possibilities, as evidenced in the article we read.
It is possible that...
It is intriguing that we are all still learning about the new business area, but Chesbrough's framework is helping us move forward. However, it is not the ultimate solution for services innovation as co-creation will also shape the path ahead.
In a sidebar, Chesbrough discusses obstacles to implementing service innovation in a product-focused company such as modifying service fees and adapting sales compensation incentives. We acknowledge several of the issues. We want to propose adding another barrier to the collection: the jeopardization of existing product-based business.
When product-based companies transition to offering services, it can become problematic. Senior executives may be reluctant to enter the service industry as it may detract from revenue generated by their established product business.
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