Pioneering Advantage in New Service Development: A Multi‐Country Study of Managerial Perceptions

Abstract

Pioneering advantage in manufacturing firms has received much attention in the management and marketing literature. Few research studies, however, have been conducted to investigate the pioneering advantages and disadvantages involved in new service development, especially across several geographic regions. We build a theoretical framework of pioneering advantage in service industries based on the distinguishing characteristics of services. From this framework, we develop a set of testable propositions about the importance of several types of pioneering advantage (economic, preemptive, technological, and behavioral advantages) to service managers. Specifically, we propose that all of these types of pioneering advantages are important to service managers, and that these managers perceive that pioneering results in improved firm performance. We also propose that, due to the distinguishing characteristics of services such as intangibility and heterogeneity, service managers will not perceive the risks of pioneering in a service industry to be severe. In addition, we propose that certain types of pioneering advantage will be more important to service managers in Western countries than in Asian Pacific countries due to cultural and business environmental differences. In particular, we propose that service managers from Western firms perceive preemptive advantages of pioneering to be more important than do their Asian Pacific counterparts, and service managers from Asian Pacific firms perceive behavioral advantages of pioneering to be more important than do their Western counterparts. To test our propositions empirically, we develop a set of pioneering principles from the literature. We then collect and analyze data from a sample of 982 senior managers in service industries from nine countries: the United States, the United Kingdom, Germany, Japan, China, Taiwan, Hong Kong,1 South Korea, and Singapore. We find evidence of several significant cross‐cultural differences consistent with our propositions. In fact, seven of the eight propositions are strongly or partially supported. The only nonsupported proposition concerned the importance of technological advantage. We find that technological advantages of pioneering are much less important to service managers than are other pioneering advantages. We conclude with strategic recommendations for managers involved in new service development and international or global competition, and provide directions for future research. We note that the insights from this study can help managers from both the West and the Asian Pacific region to better understand their global competitors who pursue a new service pioneering strategy, and can potentially help them select entry deterrence strategies more effectively.

Market responsiveness, top management risk taking, and the role of strategic learning as determinants of market pioneering

“…The empirical work of Song et al (1999) confirms that pioneering is perceived by managers as a high-risk activity, and Song et al (2000) posit that managers make strategic decisions based on their experiences, beliefs, and perceptions. Thus, top management risk taking represents a theoretically important determinant of market pioneering activity.…”

Service orientation: effectuating business model innovation

“…The growing significance of services (Bitner, Ostrom, & Morgan, 2008;Sheehan, 2006) places increased emphasis on the need for a service-oriented approach to value creation (Bitner & Brown, 2008;Lusch, Vargo, & O'Brien, 2007;Song, Di Benedetto, & Song, 2000). Service orientation is the firms' overall propensity for delivering service excellence (Oliveira & Roth, 2012).…”

Creating First-Mover Advantages in Nature-Based Recreational Goods

“…Moreover, due to the heterogeneous characteristics of services it is easier for a later entrant to offer a slightly differentiated service directed at specific customer needs (Song et al 1999). An investigation of service pioneering advantages can be found in Song et al (2000).…”