Integrating Product and Service Innovation

OVERVIEW:Product innovation alone does not produce sufficient or sustained competitive advantage and growth. Increasingly, industry leaders—such as HP, Apple, Rolls-Royce, TomTom, and GE—are complementing their product offerings with service innovations to create solutions that generate greater customer value, improve brand preference, and create greater cross-selling opportunities. There are four stages of service management maturity: Product-Centric Manufacturer, As-Needed Service Provider, Full-Line Service Expert, and Integrated Solutions Provider. Each stage adds higher levels of service, provides more sophisticated solution offerings, and generates more attractive margins. Moving to these higher stages of maturity requires expanding your value proposition beyond existing products to provide customers with solutions that include integrated products and services. You also need to fuse technology and business model innovation by organizing and leveraging the appropriate resources. Finally, you need to develop robust partnerships to support the enhanced value proposition.