2.1. Technology-Based New Service Idea Generation
There has long been a lot of debate about push–pull innovation. While the core of the technology push argument is that advances in technology determine the rate and direction of innovation, the other side argues that changes in market conditions create opportunities for innovation [19
]. However, technology push and demand pull strategy still cannot be affirmed as the right or wrong approach to innovation; which strategy works best depends on assorted variables [20
]. Meanwhile, there is a perspective that one of the differences between technology-driven and market-driven is the level of innovation. Another view describes that technology push can be characterized as disruptive, highly uncertain, and time-consuming for radical innovation, whereas demand pull innovation is relatively certain, substitutable, and continuative for incremental innovation [21
]. Stefano et al. updated the debate on the sources of innovation to provide a more granular understanding of how technology and demand interact [24
]. Thus, great attention has been paid to the technology push and market pull innovation. Meanwhile, there have been some attempts to compare product innovation with service innovation. Nijssen et al. showed that R&D strength is more important in developing radical new services than new products [25
]. Griffin studied how new product and new service development have similar key success factors but different priorities [26
]. Möller et al. proposed the characteristics of three types of service innovations (established service, incremental service, and radical service innovation) and an improved collaborative service innovation strategy compared with a client-driven or provider-driven strategy [27
]. They especially considered how service innovation links a provider-driven approach with market-driven perspectives rather than focusing on any specific viewpoint. Likewise, there were growing attempts at innovation driven by interactive perspectives, along with studies about the technology push or market pull strategies.
With the increasing importance of technology and service innovation, technology-based service has played an important role in economic growth, since there is growing awareness that differentiation based only on technology is insufficient to guarantee success [28
]. In particular, the advance of ICT has created numerous opportunities for service innovation as well as new technology-based services that are developed, produced, and distributed, thus making intensive use of ICT [29
]. Successful technology-based service ensures that service providers and users create substantial value [30
] by reducing risks and maximizing their returns on investments in the new technology [31
The traditional five-step model [32
] and the stage-gate model [33
] have been used to develop new products and services as the industry standard and guidelines of the innovation process. These two models, which are not customized depending on a specific situation, are applied to new product and service development procedures. That is why it is difficult to apply these models for some industries that are in rapid technological change and have complex customer needs. In particular, the telecommunications industry needs a customized process for developing new services because it is strongly linked to service convergence with other sectors, such as data service and broadcasting service. Ahn and Skudlark suggested a new service development (NSD) process including uncertainty factors such as the economy, competitors, and technologies based on the telecommunications service development process of AT&T Laboratories [34
]. The proposed six steps are idea generation, concept assessment, feasibility, requirements, development and testing, and deployment. Among these steps, the feasibility phase contained a scenario planning approach, which can capture the uncertainty. The suggested model was verified by a case study on the Phoneweb service using the Internet in 2002. Even though this case was outdated, this research has an implication that the new service development process is structured around the issues of uncertainty and telecommunications industry. Oh et al. proposed service evaluation methods using the Balanced Score Card (BSC) model and Analytic Network Process (ANP) [35
]. The BSC model was utilized to identify performance indicators for idea evaluation, and ANP gave priority to selecting the best service among Broadband Convergence Network (BcN), Wideband Code Division Multiple Access (W-CDMA), and Wireless Broadband Internet (WIBRO) in the video telephone services. Prior research focused on decision-making in the new service selection. Also, most of the idea generation methods depend on experts’ opinion, brainstorming, facilitation methods, and encouraging new ideas to the organization and customers. According to the global telecommunication study in 2015 [36
], the prediction of new service creation was implemented through interviews and surveys with experts from 40 companies about the industry’s challenges and opportunities. The global telecommunications study is a worldwide landmark report to navigate the road to 2020 by EY global company. This report suggested that smart home and smart city services associated with the Internet of Things (IoT) are uncertain to receive a high rate of return on investment, whereas over the top (OTT) oriented video services and enterprise cloud are promising services. Ultimately, there has not been much research about the systemic idea generation process, while idea selection processes are actively discussed in the telecommunication fields.
Beyond this, there were attempts to find new service areas through scenario analysis with commonly used techniques such as brainstorming, mind mapping, and morphological analysis. New business opportunities were identified for the next-generation systems beyond 3G communications by using scenarios, but this study did not focus on technological specifications [37
]. In addition, new use cases were defined by dealing with market needs on the basis of the new 5G technology. However, the proposed use cases failed to let customers know which values can be provided through new use cases [38
In recent years, relatively few studies have attempted to explore an approach that generates a new service idea based on technology; however, numerous studies have been carried out with regard to new service development without considering technology itself. Many studies aim to develop a new service concept by exploiting a wide range of methodologies from user involvement and learning from customers to quantitative approaches such as genetic algorithms and agent-based simulation [40
]. Kim et al. proposed a technology-oriented approach to identifying and managing opportunities for technology-based services through a patent-based portfolio [44
]. Because innovation for technology-based services is usually derived from technology in this study, technology was considered a source to identify opportunities for technology-based services. Business model patents that include vast amounts of information on real world service innovation based on technology were utilized as data for citation analysis and cross-impact analysis. Opportunities for technology-based services were identified by developing a portfolio map on the basis of the future effect of technology on services.
On the other hand, related literature regarding the technology-based design is reviewed in another perspective of technology-driven approach [28
]. Technology-based design is the most valuable for sustaining economic growth owing to the cumulative nature of technological progress. Thus, Luo et al. focused on the relationship between design and economic value, and insisted that the high capability of technology-based design has a positive effect on long-term economic growth [45
]. Similarly, the role of design was addressed when developing technology–based services by investigating cases undertaken in new firms [28
]. In the technology-based service development, design processes are concerned with providing a bridge from technical functionalities to value in a finished product or service and contribute to enhancing the value of services [46
]. Evidence on the role of design in exploiting technology innovations to create attractive services and to facilitate the management of positive relationships with customers was discovered in the firms studied.
Numerous studies dealing with problem solving issues have aimed to solve weaknesses through technology [48
]. For instance, researchers have worked on investigating technological solutions to the problems that customers face [50
]. Altshuller developed the Theory of Inventive Problem Solving (TRIZ) by analyzing a number of patents [51
]. TRIZ solves technical problems through 40 principles of invention such as segmentation, taking out, and local quality, and a contradiction matrix, which is composed of improving engineering feature (rows), worsening engineering feature (columns), and 40 principles (cells) [51
]. There have been many attempts to apply the TRIZ in solution-driven innovation studies. Yamashina et al. suggested a new method that integrated Quality Function Deployment (QFD) and TRIZ to enable the effective and systematic creation of technical innovation for new products [52
]. Zhang et al. proposed a service design approach by integrating TRIZ and the conceptual design activities of service development process [53
On the other hand, another argument suggests that the role of innovative users is to develop successful services [13
]. Findings from some empirical studies on intensified interaction with customers in various companies showed that involving customers will improve the effectiveness of new service development [54
]. Thomke and Hippel insisted that firms should direct their energies to a small sample of innovative users when discovering and acquiring new technologies, products, and services [55
]. Another study questioned whether customer involvement actually functions to generate truly innovative ideas at the earliest stage of a new service development and queried the effectiveness of employing such customers to generate new service ideas in a technology-based service setting [42
]. Lee et al. investigated the factors affecting consumers’ adoption of technology-based service innovations with two-step estimation [31
]. In order to examine the effects of limited accessibility on consumer adoption of technology, two technology-based services were chosen, ATMs and Internet banking, which exist in different stages of the diffusion process whereby knowledge or services spread to other users.
2.2. Value Innovation
Kim and Mauborgne suggested the concept of ‘value innovation’, which is a key principle of ‘blue ocean strategy’ [48
]. They mentioned that technology innovation is neither a prerequisite for value innovation nor the cause of value innovation; in other words, value innovation can occur with or without innovative new technology [48
]. The aim of value innovation is to eliminate the boundaries in an existing market by creating a leap in value for buyers and companies, thus overtaking the competition, and it is regarded as a blue ocean strategy [17
]. Kim and Mauborgne identified an ‘uncontested market space’ as a key opportunity for business, and defined approaches that target these markets as ‘blue ocean’ [57
]. According to the authors, blue ocean refers to unknown market space, non-existing industries, where there is no competition. On the other hand, red ocean is described as a known market that represents all the industries in existence today [17
]. Value without innovation tends to focus on value creation on an incremental scale, which improves value but is not sufficient to make the company stand out in the marketplace. Chaoren and Thawatthatree [59
] employed a blue ocean strategy and showed how to use value innovation to create competitive advantages and acquire a leader position in the market by IKEA, which is a furniture and home accessory company. Chaoren and Thawatthatree mentioned that IKEA successfully applied the blue ocean strategy and used value creation as the cornerstone for its competitive strategy, improving its production process and developing unique value-based design concept [59
]. Another example of applying the blue ocean strategy is Yellow Tail, which is a brand of wine produced by Casella Wine [58
]. Yellow Tail appealed to a broad cross section of alcoholic beverage consumers by applying the blue ocean strategy, reducing or eliminating all the factors the wine industry had long competed on—tannins, oak, complexity, and aging—in crafting fine wine.
When deciding how to distinguish themselves from competitors and gain competitive advantages, firms must understand how to create, communicate, and deliver value to customers [60
]. Customer value has been regarded as a trade-off between benefits and costs [63
] to create competitive advantage, and it has been essential to pinpoint the factors that determine value customer experiences from a specific offering and learn how to manage this value over time [61
]. While customer value has been traditionally regarded as related to functions and performance derived from products as value-in-exchange, recent studies suggested that customer value emerges in customer value generating processes such as value-in-use [64
]. Hence, most firms have adopted customer value-based selling and pricing as well as management [60
]. Keränen and Jalkala examined the types of customer value assessment strategies that firms adopt in the business market [60
Specifically, customers may perceive value and utility differently at the time of the purchase, use, and disposal of an offering, such as a product or service [57
], which is reflected in the buyer-utility map, first suggested by Kim and Mauborgne [66
], which is one of the tools for implementing value innovation [57
]. Kim and Mauborgne proposed a systematic approach to reducing the uncertainties of innovation and developed three analytic tools, the buyer-utility map, the price corridor of the mass, and the business model guide, by collecting data on more than 100 companies that have successfully innovated to help managers discover a winning business idea [66
]. The buyer-utility map is used to describe how consumers experience an organization’s specific offerings, thus allowing managers to identify the full range of utility propositions that a product or service can offer [66
]. A new product or service is located in one of the 36 cells in the buyer-utility map, which is composed of six rows (the six utility levers) and six columns (the six stages of buyer experience cycle); the map then shows how the new idea creates a different proposition of utility from existing products. On the other hand, there is a different view that this tool is limited to certain sectors such as service development, because the buyer experience cycle is different between product and service [67
]. Thus, it should be properly modified to fit a certain domain. If the utility lever or stage is converted, it may be possible to create a new opportunity or to identify the current competitive status and then find a new opportunity. From this viewpoint, our research modifies rows (utility) of the traditional map of customer values, and then aims to discover new service opportunities.
The value curve is the basic component of the strategy canvas, which is a visualization tool composed of the competing factors along the x-axis and the offering level along the y-axis [57
] and is a graphical depiction of a company’s relative performance across key success factors of its industry [68
]. The horizontal axis shows the range of factors in which the industry competes and invests, and the vertical axis shows the level offered for buyers across key competing factors. Value factors are elements for value creation in which an organization invests, such as resources, processes, and capabilities that act as the basis of differentiation and competition. The value curve provides an opportunity to escape from or eliminate the competition by capturing the current and future state of activity within a marketplace, thus helping strategists examine value creation and capture opportunities.
The ERRC framework proposed by Kim and Mauborgne is a useful tool when establishing a future strategy canvas and has four actions that facilitate identifying value elements to be eliminated (E), reduced (R), raised (R), or created (C), thus reconstructing value elements of buyers in crafting a new curve [17
]. Mohamed et al. performed exploratory analysis on 14 different agencies using the ERRC framework [69
]. Wenzel and Förster examined the blue ocean strategy of IKEA using various blue ocean strategy tools such as value curve, strategy canvas, and ERRC framework [70
]. Completing this grid provides several advantages when making a strategy: (1) it drives customers and companies to follow low cost and differentiation at the same time; (2) it immediately flags companies that are only concentrated on increasing and creating value or performance; (3) it helps companies re-think their cost structure as well as product and service design; and (4) it discovers the range of hidden assumptions made in competing [17
Various approaches to identifying new domains by improving service values for customers, such as the Kano model [71
], Quality Function Deployment (QFD) [72
], and decision trees, have been actively studied in value innovation of service quality. Among these alternatives, the ERRC framework systematically decides to eliminate unnecessary value factors, increase or reduce levels, or create new factors that can facilitate new service concepts by presenting detailed features of new services. These adjustments of value factors are combined and lead to the reconstruction of the value curve, resulting in a new service idea based on emerging technology. Since the customer value plays an important role in defining new service areas, it is crucial to examine which value is provided and satisfied by new services In particular, the area where no services are provided, despite the customers’ many needs for experiencing value and satisfaction, can be explored by value proposition. Thus, tools for value innovation, such as the ERRC framework and value curve, are needed to create new service ideas.
2.3. Morphology Analysis
Morphology analysis, first suggested by Zwicky [73
], is a methodology used to create new ideas from a decomposed system and has been regarded as a design solution for multi-dimensional and non-quantifiable problems. The generic form is known as a morphological matrix, composed of dimensions that define the attributes of a technology and shapes that show possible ways to satisfy attributes. Opportunities for designing or developing systems can exist as a possible configuration and the remainder needs to be evaluated by domain experts.
The majority of studies utilize morphology analysis for engineering and product design [74
], technology forecasting and foresight [75
], and decision-making and policy analysis [77
]. In the field of engineering and product design, Prokopska [78
] employed this methodology for architectural design and Medina et al. [79
] dealt with the design of a robotic laparoscope by introducing weight and preference coefficients with respect to sets of criteria.
Several studies ware recently made to exploit morphological analysis in design technology and a business model. Song et al. not only suggested an approach to predict prioritized directions of innovation but also to create the most promising practical concept design [80
]. Im and Cho [81
] proposed a methodology supporting the new business model development process where morphology analysis was used for identifying business model alternatives. They considered that the development of new business models is a multi-dimensional and complex problem since diverse aspects such as value proposition, customers, and partners must be considered, and are uncertain and immeasurable. Yoon and Park [82
] suggested a keyword-based morphology analysis, where all occupied configurations of technology were identified by mapping the keywords of existing patents into a pertinent morphology. It combined conjoint analysis and used them to identify opportunities and forecast new technology [83
], while also expanding to develop a technology roadmap [85
To summarize, morphology analysis is suitable for investigating objects with high complexity or for solving problems where substance is reduced to various combinations of a number of elements [78
]. On the other hand, since morphology analysis should identify various dimensions and shapes to offer a desirable combination among alternatives, it is hardly applied to analyze a complex system that has a number of dimensions and shapes with a vast amount of data. Despite the limitation, a lot of studies recognize morphology analysis as a technique to create new ideas for service development [80
]. Since customers do not know what an emerging technology is able to provide, this study aims to describe several functions of technology by combining dimensions and shapes in the morphological matrix. Dimensions and shapes are composed of technological components and their combinations make functions that can create new value for customers.