The Strategic Alignment between Service Innovation Strategy and Business Strategy: The Empirical Investigation and Implications for Firm Performance

비즈니스 전략과 서비스혁신 전략의 전략적 적합성에 대한 연구: 실증적 검증과 기업성과의 의미

  • Received : 2012.11.27
  • Accepted : 2012.12.21
  • Published : 2012.12.01

Abstract

Since service innovation is considered as a new way to gain an advantage in a highly competitive environment, it is imperative for companies to align their service innovation strategy with their business strategy in order to achieve better firm performance. Accordingly, a critical challenge facing firms is how to effectively organize and manage a well-planned service innovation strategy in accordance with the direction of their business strategy. Firms with a good fit between business strategy (i.e., cost leadership, innovative differentiation, and marketing differentiation strategies) and service innovation strategy (service creation-focused, service delivery-focused, and client interface-focused strategies) are expected to have better firm performance than those without such a fit. Based on empirical data from 209 service firms in South Korea, this study aims first to investigate whether a certain service innovation strategy is more effective than others within a particular business strategy. We then examine whether their effective alignment positively affects firm performance. The empirical evidence indicates that the alignment of service innovation strategy with business strategy significantly influences firm performance. The adoption of service innovation strategy was found to have positive effects on firm performance with innovative differentiation and marketing differentiation strategies and negative effects with cost leadership strategy. Lastly, we discuss our study's implications for further research and practice.

Acknowledgement

Supported by : Korea Institute of Economics and Trade (KIET)