easy to achieve, as the intangible nature of service
activity and the active participation of the customer
in producing the offering has led to uncertainty
about how to innovate new services (Chesbrough,
2005). Yet, service innovation is increasingly considered a vital element of a firm’s competitive strategy
(MacDonough, Zack, Lin, & Berdrow, 2008), and this
strategy will be misguided if the firm’s innovation
approach is too short-sighted to make a real difference for customers–—or to be truly differentiated in
today’s marketplace.