Problem Background
Innovation is bringing forth a new idea that transforms how things are experienced. In a service business, innovation is the key to staying at the top of the table. As much as the traditions of a particular company that makes it unique should be supported, having new ideas to improve the existing ones could be the key to a flourishing business that attracts more customers and beats the competition.
In the current era, boutique hotel chains have been developed at a very high rate and the competition to stay on top gets intense every day. In that case, getting innovative ideas and a department specialized in innovating and creating new ways of maintaining customers is a way of securing the top place on the corporate ladder as far as boutique hotel chains are concerned. Through a new idea or service innovation, a company has a great chance of increasing its revenue due to existing clients spending more, having a more positive company image and getting referrals from the existing clients.
Types of Innovation in Service Business Environment
Definition of service innovation
Innovation and inventions can be mixed, and thus interventions become less satisfactory. However, a researcher defined innovation as a separate activity through which interventions are done for a commercial purpose; it is the ‘carrying out of new combinations (Snyder, 2016). Service innovation can either be an addition to the current service or a complete change to the delivery process. Therefore, several types of service innovation are available that come in different forms and depend on the degree of change (radical vs incremental), kind of change (product versus process), newness( to the company or the market) and means of provision. All these solely aim to stay at the top of the business world. These can be further broken down into distinct categories;
Organization and management innovations
This includes finding new ways and approaches in managing and even organizing the working environment that is implementable in improving the hospitality models used in the organizations, whether European, Asian and more. Innovations in management and organization are the root of all other innovations. When a hotel changes how they do things for the better and run its day-to-day activities, it is an innovation that gives birth to further innovations in the organization. A study showed that hospitality industries paid less attention to this form of innovation, evidenced by their not motivating their employees (Eringa et al., 2021). As much as this part is neglected, it is a strong foundation for all the other innovations to thrive.
Technological innovations
This is the second most crucial innovation in the hotel business. In the current century, being updated on the current trends and the newest technology methods is the easiest way to attract and maintain clients. Technology can be used in the management of hotels, especially boutique hotels. First, clients want convenience; they want information about the hotel on the internet accessible. They want a seamless, contactless check-in and out experience, as contactless hospitality is rising.
Technology can be an excellent way to create a feeling of newness in a hotel and make the guests’ experience more memorable. Incorporating technology to improve services could mean introducing artificial intelligence to make communication more accessible and convenient and as easy as adding appliances that make the stay of clients more seamless and memorable.
Marketing innovations
Marketing is one of the innovations that has been given full attention in business and is no different for hotels. However, due to the tremendous number of players in the market, a hotel needs to stand out amidst the competition, and this is where the innovative part of marketing comes in. brilliant marketing campaigns need to be developed, angling for the attention of the target audience. Recent studies show that influencers have made marketing more manageable and could be a straightforward and productive way to market the company creatively.
Integration of Open Innovation in Service Business and its Benefits
Open innovation is the practice used by companies and organizations to source ideas from external sources and, to some extent, internal sources. In practice, open innovations take the form of partnerships; either a company sourcing help from another company with similar goals or a company sourcing the help of a single individual who is not an employee of the company. This concept removes the secrecy and silo mentality from traditional companies, thus inviting a larger group of people to participate in problem-solving and product development. So how can open innovation be integrated into the service business?
To understand how the two, integrate, it is essential first to understand the richness of the open innovation paradigm (Hammadi et al., 2015). It is divided into two inbound and outbound. Outbound open innovation means the company will have to use external paths to market for internal development, which could be risky as it means sharing strategies and even selling intellectual property to another company (Ziyae, Sadeghi, Golmohammadi, 2022). Doing this could give a competitive advantage to the other company but also benefit the sourcing company in strategies. Inbound open innovation explores and integrates external resources for internal development. This includes activities such as networking, inter-firm collaboration, and customer participation, thus obtaining new complementary resources that aid in the company’s growth.
The first step of integrating open innovation in the service business is deciding the type of innovation to be introduced and the synergies within the business that want to be brought to life. Creating an environment that encourages innovation attracts innovative employees. For example, Les Roches regularly have a match between the employee and employer within the innovative circle. This helps to share knowledge, hence a great way to incorporate open innovation.
Another way is to give the clients and even the employees a voice. The clients can be in contact with the hotels day to day activities and give their comments. The employees are also a creative way to innovate. They have the local information about the company that is very valuable as it is first-rate, and they know the reality of the place. To motivate them to give information for example, instead of giving a cash price to the one with innovative ideas, a full time job can be awarded, this way the employees will be more invested This can be done through crowdsourcing and collective, dynamic co-creation mechanisms their information could be great pointers as to what services are being offered poorly and how the same can be corrected to make the services more appealing.
To get feedback from the clients, a certain level of satisfaction has to be achieved therefore, ways to ensure feedback should be incorporated. Some studies show that only customers who rate the service 9 out of 10 are more likely to give feedback than the rest (Diaz, Duque, 2021). Therefore, as a service sector, looking for insight from the client’s quality service is essential as it will also help get recommendations sent to probable clients. These and many more ways can be used to ensure open innovations brings maximum advantage to the service business.
Competitive Benefits of Open Innovation
Since the discovery of open innovation, service businesses that have incorporated it into their strategies have grown massively. This goes to show how beneficial it can be. First and most importantly, it helps one to stay ahead of the competition; this is because open innovation enables you to source an aray of ideas from people who already have knowledge and connection to your company. They can provide a fresh perspective on challenges, thus helping the business to adapt to the rapidly changing world.
Secondly, open innovation helps immensely in getting diverse views from external organizations that might have more experience and broader talent. This works perfectly for a small business as a range of viewpoints helps to develop a more holistic view of situations, thus making problem-solving easier. Getting direct feedback from partners and customers is also another advantage, this not only provides the business with valuable information but also creates a warm link with the clients hence making them feel that the company cares about them and their satisfaction with services. This aids immensely in gaining the trust of clients, thus staying at the top of the competitive ladder.
Sources of Innovation that can be used to Develop New Products and Services in a Boutique Hotel
Innovation, just like a creative activity, must be inspired and triggered by something. In a boutique hotel, due to the competitive nature of the business world, innovative ideas will always come in handy to find ways of bettering the business. One of the sources is unexpected happenings. Someone might stumble upon something and get creative with it to develop ideas for creating a new service or even a product for the hotel. As history has it, many discoveries made were through unexpected discoveries; the same can apply to hotels.
Industry and market changes are another source of innovation that is very valuable. Are the client’s demands moving away from the norm? Are there needs that have risen from the clients? Having these questions in mind and carefully following the trends helps you identify a gap in the market and create new ways to fill the gap. The following source is new knowledge which ties nicely with technology. When they change, and people get more knowledge, a company may use that to bring new products and services, such as a virtual hotel guide, making the experience more sophisticated and memorable.
Changes in the community’s perception and the laws of the land are also a source of innovative ideas. Sunbathing without sunscreen is responsible; looking for those changes in perception helps one to build additional features, like, in this case, providing skin products in the hotels, thus creating new products and services. Although this source can be limiting, it can be beneficial, and great ideas can be devised from it. The laws also can be a source; where one product is declared illegal, looking for something that could replace the illegalized one helps one come up with way better new ideas and many more.
Plan for Addressing Challenges in Implementing Open innovation in the Boutique Hotel
To address a particular problem, we need first to identify the challenge, understand the implications and try to have it in a way other people will easily understand. Challenges in implementing the open innovation plan for the boutique hotel are there because things are more complicated. Open innovation requires a lot of commitment and time to sit and evaluate each step carefully before executing them due to the complexity of interrelations (Correia.M. et al., 2019). With the fore plan, the things in place would be easier to implement.
As discussed, strategic planning is required for boutique hotels, especially luxury ones, to ensure the client’s satisfaction. In a luxurious town like greek, having the right strategy is vital to retain clients. One of the challenges in implementing is strategic challenges, having goals that need to be clarified. Having goals that are well set helps in deciding the right partners to incorporate into the innovation plan. Being a hotel business gives it a limited number of partners who must be carefully chosen to ensure success.
The other challenge to be faced is cultural challenges. A company that has not practised open innovation will have difficulty developing that culture. According to the CEO, this hotel needs urgent interventions to secure its place at the top as it used to. Therefore, if the company will not emphasize the importance of the project, the other employees may not get the importance of it; thus, bringing it to a successful completion could be a challenge. A welcoming attitude and commitment to the project would help solve the challenge. Despite all the challenges that may come with new ways of doing things, the critical part is conquering them, and the price from that is immense and satisfactory for the company.
References
Correia. M. et al. (2019). Challenges of open innovation in the tourism sector. Taylor and Francis Group. 22–42. Web.
Diaz.M. and Duque, M. (2021). Open innovation through customer satisfaction: a logit model to explain customer recommendations in the Hotel sector.J. Open Innov. Technol. Mark. Complex. 7(3). Web.
Eringa.K. et al. (2021). Workplace innovation and organizational performance in the hospitality industry. Academy of International Hospitality Research.13(11). 5847. Web.
Hammed. K. et al. (2015). Open innovation implementation in the service industry: exploring practices, sub-practises and contextual factors. Journal of Innovation Management. 106-130. Web.
Synder. H. (2016). Identifying categories of service innovation: a review and synthesis of the literature. Journal of business research. 69(7). 2401-2408).
Ziyae.B, Sadeghi.H. and Golmohammadi,M. (2022). Service innovation in the hotel industry: the dynamic capabilities view. Journal of Enterprising Communities. People and Places in the Global economy. 582-602. Web.