SERVICE BUSINESS MODEL AND SERVICE INNOVATIVENESS

Service innovativeness has been hailed as a key success factor in being able to differentiate a new service from its competing offerings. In spite of a number of literatures suggesting the impact that a service business model can have on service innovativeness, no comprehensive and empirical study has examined the relationship between the distinctive design themes of a service business model and service innovativeness. This paper fills the research gap by conducting a series of pilot tests and then the subsequent questionnaire survey on top service firms in Taiwan. Results based on 211 responding service firms indicate that the novelty-centred business model has a U-shaped effect on service innovativeness, while the efficiency-centred business model has an inverted U-shaped effect on service innovativeness. Theoretical and managerial implications of these key findings are discussed.