Innovation in commoditized service industries

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1 Maximilian Rothkopf Innovation in commoditized service industries An empirical case study analysis in the passenger airline industry LIT

2 XII Table of contents Abbreviations List of figures Appendix XVI XIX XXII 1 Introduction Background and relevance of the topic Objectives and scope of the research Approach and structure of this dissertation 5 2 Innovation in commoditized service industries Characteristics of services and of commoditized service industries Research on innovation in service industries: Review of core theories and empirical studies Core definitions Introduction to the diverging theoretical approaches to service innovation v Three theoretical approaches by Coombs and Miles Tether's theoretical classification of service innovation Key findings from empirical studies in the area of service innovation A frame of reference for the empirical research Review of innovation research in the transport sector A transport sector innovation inspired frame of reference Research gap and research questions for this dissertation 27 3 Fundamentals of the passenger airline industry An introduction to structures and economics of the industry The aviation value chain and the service chain of an airline Predominant airline business models Airline economics Structure of the airline industry The state of commoditizationin the passenger airline industry An airline specific definition of innovation 39

3 XIII 3.4 Review of airline specific service innovation research The importance of research on innovation in the airline industry 44 4 Design of empirical investigation Selection of research strategy Qualitative versus quantitative approach Introduction to case study research methodology " Multiple case study research design in this dissertation Selection of case airlines Data collection procedures Semi-structured interview guideline - concept and structure Interview partners and interview procedures Analysis and synthesis of collected data Data triangulation and case study database Coding and structural content analysis The concept and structure of within- and cross-case analysis Validity and reliability of the research design 60 5 Within-case analysis of the airline case sample Within-case analysis across a full industry cycle Qantas Airways Description and innovation track record Discussion and synthesis, Lufthansa German Airlines Description and innovation track record Discussion and synthesis Air New Zealand Description and innovation track record Discussion and synthesis Austrian Airlines Description and innovation track record Discussion and synthesis Air France Description and innovation track record Discussion and synthesis 92

4 XIV Luxair Luxembourg Airlines Description and innovation track record Discussion and synthesis Southwest Airlines Description and innovation track record Discussion and synthesis Virgin Atlantic Airways Description and innovation track record Discussion and synthesis Within-case analysis based on empirical interview data Analysis for airline A Analysis for airline B Analysis for airline C Analysis for airline D Analysis for airline E Analysis for airline F Analysis for airline G, Analysis for airline H Cross-case analysis of the airline case sample Patterns, similarities and differences across the case airlines The perceived importance of innovation and different strategic approaches Sources of innovation ideas, Organizing for innovation, Innovation collaboration in airline alliances Protection of innovation Creating value through innovation Findings on innovation priorities and patterns across a full industry cycle Innovation activity by carrier type Changing innovation priorities Innovation patterns across the industry cycle Barriers to effective innovation in the airline industry Internal barriers External barriers 165

5 XV 7 Discussion and implications of the empirical findings Synthesis of results with reference to the research questions Strategic approaches to innovation Organizational structures for innovation Value creation through innovation Confronting extant theory with research findings Extension of the driving forces model by Sundbo and Gallouj Extension of the descriptive frame of reference Discussion of theoretical classifications of service innovation Managerial implications - creating competitive advantages through innovation in the airline industry Fundamentals for innovation at airlines Defining an approach to innovation Creating an organization for innovation Value creation through innovation in commoditized air travel markets Generalization of findings for broader application in service industries Elements to create competitive advantages in services Mastering a commoditized service industry Outline of key success factors Concluding remarks Academic contribution of this dissertation Limitations of the research and findings Outlook and areas for further research 195 Bibliography 197 Appendix 212