Services drive constant Innovation

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Fickle customers, spillover to competitors, and value shifts in ecosystems... As a service you have to constantly innovate. It's an exciting world out there, but we can help! Click To Tweet

As a service, you embark on a journey of constant innovation.

  • Customers are fickle,  demanding ever greater enrichment, enticement and excitement
  • Competitors take advantage of the “spillover” effect of intangibles, rapidly copying your market lead
  • The ecosystem you live in constantly changes and co-value generators moves

It is an exciting place to live!

Let’s take Netflix as an example and look at a few of their innovations over the years:

  • Netflix was founded in 1997 as a DVD by mail service
  • They introduced a new business model – the subscription model
  • Using the data they collected and an algorithm they could introduce a recommending system
  • They moved to streaming, first as an add-on service, then as the main service
  • They started creating their own movie and series content
  • They identified animated movies can be compressed more than feature films.
  • They moved their web page from static content to more dynamic content

We can look at those innovations through the different lenses.  More details in our full article here [link coming soon]

Slide 2 – strategic

Here we consider the strategic moves each innovation helped Netflix make.  From business model innovation, through innovations that helped them differentiate or reduce cost, to innovations they implemented to catch up with customer expectations.

Slide 3 – opportunity and threats

Here we look at where Netflix has innovated to take advantage of opportunities, or when reacting to threats.  You can see that Netflix had mainly been creating the market lead and so innovations have been opportunistic.  But in recent years they have been responding to threats, for example movie studios withholding content or setting up their own services.

Slide 4 – service innovation model

Finally we see Netflix innovations in the context of den Hertog’s service innovation model’s three aspects – news service concept, new client interface, and new service delivery.

Service innovation: strategic, grabbing opportunities, responding to threats, handing the service innovation model.. Find out how Netflix exhibits it all! Click To Tweet

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