Page 155 - DMGT522_SERVICES MANAGEMENT

Services Management

Notes trade, share ideas, and in short trade. Customers can post their classifieds on the website
for free.
Apart from the types of E-commerce mentioned above, there are various other hybrid forms of
E-commerce being practiced in today’s globalised world.

7.3 Role of Technology in Service Marketing

7.3.1 Market Gap

Market-orientation and the importance of marketing for business success are not new. Highly
respected scholars like Peter Drucker and Theodore Levitt published their classic writings on
these subjects as early as 1974 and 1975 respectively. Drucker (1974) argued that the only purpose
for a business is to create a customer and that is achieved through marketing and innovations in
Marketing Myopia, argues that marketing is largely ignored because top management is wholly
transfixed by the profit promises of technological R&D. Levitt also argues that product
orientedness in high technology works well where firms are pushed into new frontiers where
they did not necessarily have to find markets but to fill them. It is almost ironic that these
statements almost serve as tailored characterizations of what we can observe a quarter of a
century later within both ICT and biotech.
7.3.2 Innovation

It is widely acknowledged that there are different forms of inventive activity with different
contextual origins and there has been substantial effort ever since the work by Schumpeter in
defining common elements of a wide range of innovations. The nature of innovations has been
studied as well as different kinds of innovations, i.e., product, process, business concept,
incremental, radical, architectural, disruptive, and value innovations

Ability to Innovate: A firm’s ability to innovate has been studied looking at the relationship
between firm size and R&D productivity. However, the findings are mixed and limited. Henderson
and Cockburn suggest there are significant returns to size in, e.g. pharmaceutical research but
only a small portion of these returns are derived from economies of scale and argues that close
proximity between R&D organisations impact positively on R&D performance. In an almost
opposite result, found evidence for decreasing returns with respect to scale in R&D. Suggest that
both very small firms and very large firms were proportionally more innovative than medium-
sized firms. Paradoxically, mergers and acquisitions of technology firms are often justified by
management by the desire to spread costs over a wider base and to gain control of R&D in
competitive firms, rather than improving R&D productivity in their own firms. Whatever the
case the fact remains that R&D is a source of firm-specific expertise holding significant potential
as a source of competitive advantage

7.3.3 R&D as Knowledge Management

More recently R&D has been explicitly linked to knowledge management and organisational
learning. R&D and innovative activities are seen as complex search, learning and problem
solving processes, which are as much based on existing knowledge as on creating new knowledge.
Innovations within the context of knowledge management also include the emphasis on
coordination within the firm, its implications for firm and industry structure, and the role of
management in facilitating innovations. Grant discusses critical characteristics of knowledge,

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