User-based Innovation in Services
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User-based Innovation in Services

Edited by Jon Sundbo and Marja Toivonen

This book demonstrates pioneering work on user-based service innovation using an analytical framework. This approach involves understanding the needs of users, the service firms collaborating with them, and recognising the fact that users are innovators and, as such, services develop while in use. As well as presenting case studies, the book discusses theoretically what user-based innovation means in the context of services. Three main fields are analysed: user-based innovation in knowledge-intensive business service, user-based innovation in public services, and models and methods for structuring user-based innovation.
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Chapter 6: The Business Model as a Tool in the User-based Development of Services: A Case Study of an Internationalizing KIBS

Otto Mäkelä and Mikko Lehtonen


Otto Mäkelä and Mikko Lehtonen INTRODUCTION 1 Service firms attempt to expand their operations into broader markets in order to attract new customers, accelerate growth rate, innovate and form new partnerships (Daniels, 2010; Massini and Miozzo, 2010). This chapter presents a case study of a large Finnish design and engineering company, which operates internationally but now wants to expand further and develop its service offering in the real estate and construction sector. The challenge for the company is to establish its position both in transitional economies as well as in developed Western economies. The case illustrates the role of user-based service development in establishing operations in foreign markets. The expectations of foreign customers may differ from the conventional domestic customers. This means that the business logic of the domestic market may need to be adapted to the cultural, economic, institutional, geographic and other features of the foreign markets. The business model concept helps to raise critical questions in internationalizing services: how to adapt existing services, or develop new services that are appropriate for the foreign context. It is particularly helpful in the situations where critical information about the markets is difficult to acquire, marketing outreach and distribution is inaccessible, and broader brand awareness and social reputation are hard to come by (Dahan et al., 2010). This chapter illustrates how the concept of the business model can be used as a tool when describing and developing the offering of a knowledgeintensive business service company (KIBS – see e.g. Miles, 2001) in...

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