The respondents were grouped into Steady Value-Added S仕ategy，Emerging Goal Strategy and Prosperous Business Strategy. A summary of the grouping is shown in Appendix 2. It indicates that 25 Steady Value-Added Strategy firms constitute the largest group (53%), followed by 15 Emerging Goal Strategy (32%) firms, 7 Prosperous Business Strategy (15%) firms and 0 Satisfactory Efficiency Strategy firms. Before conducting ANOVA to explore the fmn performance of different strategies, three preconditions should be tested: multivariate normal distribution, homogeneity of variance test and independence. First, about multivariate normal distribution, The Kruskal-Wallis test indicates that there was a significant difference in the medians, X2 = 4.93, p = .85. Because the overall test was significant, pairwise comparisons among the three strategies should be conducted. Second, about homogeneity of variance test, the rest of homogeneity of variance was not si伊ificant， Levene statistic values = .78, P = .46. Because there may be a lack of power associated with the test due to the small sample size, the result of the homogeneity test dose not necessarily imply that are no
di能rences in the service innovation strategy variances. About independence, this study used Durbin-Watson statistic to detect the presence of autocorrelation. The D-W test = 2 indicates no autocorrelation in this study. Therefore, the variables of this study were suitable to use the ANOVA.
Table 4 indicates the firm performance of different strategies, inc1uding Steady Value-Added Strategy, Emerging Goal Strategy and Prosperous Business Strategy. This study showed that Prosperous Business Strategy created better firm performance (M = 5.47) than th剖 ofSteady Value-Added Strategy (M = 4.85) and Emerging Goal Strategy (M = 4.00). The ANOVA test showed that the groups of strategy differences in firm performance were significant (p < .001). By conducting
Sche缸's test, this study confirmed that Prosperous Business Strategy had
54 Service Innovation Strategies in Financial Service Industry:
the Perspective 01 Reverse Product Cycle and Innovation 抒pe
significantly higher firm performance than the Steady Value-Added Strategy, Emerging Goal Strategy and the Emerging Goal Strategy. The results revealed that the fmancial frrms, which adopted both the concepts of sustaining innovation and new service of Prosperous Business Strategy, had higher firm performance in Taiwan's financial environment. In contrast, the profile offirm performance for the Emerging Goal Strategy had the lowest rating performance among three service mnovatlOn strategles.
Table 4
Service Innovation Strategies on Firm Performance
Scheff's
Subgroup 們) Mean S.D. F-value
test
l.Steady Value-Added S仕ategy(25) 4.85 .54 21.66*** (1) > (2) (1)<(3) 2.Emerging Goal S仕的egy(15) 4.00 .57 (2) < (1) (2) < (3) 3.Prosperous Business Strategy (7) 5.47 .34 (3) > (1) (3) > (2) Note: *** p < .001
Furthermore, this study examined the profile of frrm performance conceptions for different service innovation strategies. Table 4 showed that Prosperous Business S仕ategy create prominent firm performance for financial firms (M = 5.47), and the conception of enhanced opportunities provides more support (M = 5.71) than sale performance and profitability. Besides, although Steady Value-Added Strategy was not the highest profile frrm performance among all ofthe strategies, it also provided excellent profiles for financial firms (M= 5.71), especially for enhanced opportunities (M = 4.93). And, finally, the Emerging Goal Strategy provided the lowest firm performance among all three service innovation
忱的egies， revealing that service innovation strategy could contributed to the firm performance of financial frrms (M = 4.00). Among all of three service innovation
Chiao Da Management Review Vol. 33 No.2, 2013 55
strategies, Table 5 shows that the enhanced opportunities conception led to significantly higher performance excellence than other firm performance conceptions, meaning that service innovation strategy could create more opportunities for the financial industry.
Table 5
The Profile of Firm Performance in Service Innovation Strategy Service Innovation Conceptions of Firm
For the past decades, the field of service innovation strategy has been much influenced by concepts and insights 宜。m the literature on core capabilities (Christensen and Overdorf, 2000). Indeed, the service innovation view is itself firmly rooted in consumers (users) ofmarket power and competition (Oliveira and von Hippel, 2011). Unfortunately, there remains much to be done to test empirically the relevance of some service innovation strategy notions of the financial industry for firm performance, and this is true as well of the
s仕ategy-based view. Although there are long lists of candidates for valuable resources, there have been very few efforts to establish systematically, and how these resources influence firm performance. Perhaps more important, the literature
56 Service lnnovation Strategies in Financial Service lndustry:
the Perspective 01 Reverse Product Cycle and lnnovation 砂'Pe
contains many generalizations about the merits of some strategies, conjectures that often fail to consider the contexts within which strategy might be of value to an organization. Thus, the conceptual framework of this study provides four strategies
企omdifferent situations to fill in research gaps.
This study endeavors to make some progress in those directions. This study shows that both disruptive innovation and sustaining innovation that are useful to contribute to frrm performance: sale performance, profitability and enhanced opportunities. However, the environment context of reverse product cycle was important in conditioning these relationships. Period of new service favored financial firms with disruptive innovation and sustaining innovation but did not reward those period of service efficiency with sustaining innovation. It follows that whether or not an asset can be considered an innovation level will depend as much on the context enveloping an organization as on the properties of the asset itself (Evangelista and Vezza凹， 2010).
This study indicated that sustaining innovation on the stage of new service create higher firm performance than other strategy. The implication of this result revealed that sustaining innovation continues to provide generative impulses for innovation on an ongoing basis. Over time on the stage of new service, changes in the organization as well as individuals' circumstances give rise to new experiences, opportunities and challenges. Financial firms can reinterpret the same narrative at a later point, bringing to light unrealized connections between actors, circumstances and outcomes. Besides, coordination is a central task that organizations must accomplish to innovate successfully 企omsustaining innovation (Bartel and Garud, 2009). In practice, frrms may often struggle to integrate their ideas and activities with others. It is often difficult for consumers to see the relevance of information, ideas and practices that come 企omoutside their own work context and to draw on these to generate new products and services or novel ways of solving problems in their own locales. These translation problems can serve as a barrier to innovation.
Therefore, of practical concem is the creation of a social fabric that provides both the coherence and the flexibility required to promote and sustaining innovation.
Specially, on the stage ofnew service ofreverse product cy
Chiao Da Management Review Vol. 33 No.2, 2013 57
open up and create new markets, in paral1el with the emergence of new or diversified service industries and organizations.
An auxiliary object of this research also shows that variety meaning of firm performance in disruptive innovation in different stage of reverse product cycle.
F間， it is possible to identify key concept for financial firms and then derive quantitative indicators that reflect no mater on the stage of new service or service
e旺iciencyofreverse product cycle, with greater or lesser accuracy, a firm's wealth in such resources. Second, this study also reveals that the firm performance of disruptive innovation concept is lower than sustaining innovation. Disruptive innovations create new market opportunities through the introduction of the new products or services. However, it is easy as judged by the performance metrics that
mams悅am customers value in initially. These disruptive innovations did not address the next-generation needs ofleading customers in existing markets, but had other attributes th叫 enabled new market applications to emerge (Christensen and Overdorf, 2000). Besides, disruptive innovations may occur so intermittently that no firm has a routine process for handling them. Furthermore, because disruptive products nearly always make lower profit margins per unit sold and are not attractive to the firm 's best customers, they are inconsistent with the established firm's value. Therefore, this study considered it as the important reason that the firm performance of disruptive innovation was lower than that of sustaining lnnovatlOn.
Prior work in both the academic and popular press has argued that the use of disruptive innovation way will be reflected in better firm performance. This study provides further discoveries in support of these assertions. The study revealed that the firm performance of service efficiency stage of reverse product cycle in disruptive innovation concept is higher than new service stage in disruptive innovation. These statistical1y significant values suggest that financial firms can indeed obtain more substantial financial benefits 企om investing in disruptive innovation when on the reverse product cycle of service efficiency. In addition, this study shows that no respondents clustered in the satisfactory efficiency strategy, i.e.
focuses on the sustaining innovation and the stage of service efficiency, the result imply considerable thinking in pra
一一
58 Service /nnovation Strategies in Financial Service /ndustry:
the Perspective of Reverse Product Cycle and /nnovation 砂pe
fmancial fmn adopting this approach if industry conditions and social needs shift, requiring an organization to do things in fundamentally new ways. The satisfactory efficiency strategy concentrates on improvement of separate products has helped the fmancial fmn break out 企omthis strategy, but maybe it become a handicap over time as the divisions turned into hardened silos, each duplicating functions, proliferating products and raising total costs. Therefore, this study estimated imply that financial fmn could not survive simply by doing the old things with redoubled
e宜iciencyand lower product costs. The fmancial firm needs to dramatically rethink its entire organizational model and related assumptions (Strecker, 2009).
Several reasons are conceivable to explain the differences in results depending on the 可pe of performance indicator. First, executing a sustaining innovation in service field orientation does entail additional costs, which are more strongly reflected in the measure of fmn performance than in innovation performance. Besides, setting up and running disruptive innovation in service fields is more expensive than innovating along existing service or product lines. Firm performance was measured as a multi-item construct encompassing several financial and non-fmancial indicators. However, profitability is only one of several fmancial indicators of innovation performance, whereas objective, firm performance indicators are strongly influenced by firm profitability. Second, service innovation field orientation is highly specific to innovation, but less relevant for the overall firm. Hence, it can have less impact on firm than on fmn performance. Third, the fact that innovation performance was measured from an intemal perspective and fmn performance 企om an extemal, capital market perspective, may further explain the di旺erent outcomes, Investors are foremost interested in a fmn's outputs, whereas intemal perspectives on performance are influenced by multiple factors. Summarizing, even though with a weaker performance effect than established dimensions, service innovation field orientation has proven to be a valid concept by itself and a relevant success factor in the context of innovation strategy. Overall, this study confmned that service innovation strategy in the fmancial indus的，has a positive influence on fmn-level performance, even though diffi
Chiao Da Management Review Vol. 33 No.2, 2013 59
In this study, an explicit attempt was made to merge the literatures on disruptive innovation concept and reverse product cyc1e concept. Specially, disruptive innovation and sustaining innovation were inc1uded investigations to test the di宜erence of firm performance. Besides, the influence of different stage through reverse product cyc1e was c1early demonstrated. To this study knowledge, no previous attempt has been made to examine to Taiwan's fmancial market.
Therefore, these results provided a strong incentive to consider service innovation strategies as a key in relation to both competitive advantages and core advantages.
5. Conclusions
Service innovation strategy has not only been an emerging research field and but has also become a key element in finance s仕ategyand planning for the future (Alam, 2007). The emerging function of economic creation is being added to financial institutions, which will gradually mushroom the development of service innovation strategy. This study shed greater light on the relationships between fmn performance and service innovation strategies can be determinant by the dimensions of types of innovation and improvement on service. This study sets out to extend work on previous firm performance through the execution of service innovation, which developed a matrix by disruptive innovation perspective and reverse product theory.
The conceptions of disruptive innovation the。可 is a dynamic process and any model that purports to explain the evolution of a dynamic process also defmes a dynamic system either explicitly or implicitly. This study revealed that most of the Taiwanese fmancial fmns adopted disruptive innovation approach to explore market opportunities. And the majority of financial firms were all on the later stage of enhancing service e伍ciency. Specially, this study verified the performance difference under different service innovation 甜ategy to fill up the variations in financial market. The analysis provided crucial insights to manage disruptive servÌce-mnovatlOn as a competltlve s個tegy.
The features of the financial industry in Taiwan were relatively small with a
60 Service lnnovation Strategies in Financial Service lndustry:
the Perspective of Reverse Product Cycle and Innovation 砂pe
total of 189 financial companies. This study mainly focused on headquarters for respondents to explore the relationship between service innovation strategies and firm performance. Even though the overall 48 valid questionnaires can be a limit, prior research suggested that quantitative studies of descriptive research with more than 20% of retumed response rate in small samples should be enough (G旬， Mill, and Airasian, 2008). Furthermore, the sampling companies were accounted to 63%
operating revenue in Taiwan fmancial industry. The 6 retumed questionnaires were among the Top 10 operating revenue in year 2010 in Taiwan fmancial industry.
Therefore, the sample can be representative.
5.1
Management and Policies ImplicationsThis study revealed that fmancial firms in Taiwan achieve financial performance via various service innovation strategies. This study suggested that fmancial managers should be aware of the importance of disruptive innovation in the link of frrm performance. Since the financial services in the market are similar and easy to imitate, hence, disruptive innovation has clear practical implications to distinguish and therefore create higher value. The results also explained why disruptive innovation thinking could create powerful operational s仕ategy and
flexibili可 indealing with the financial indus甘ymarket (Anthony, 2009). Moreover, at the stage of service efficiency, this study argued that managers should devote necessary efforts to different innovation activities by improving present services.
Emerging Goals Strategy stresses the importance of developing new service.
This strategy attained the lowest profile of firm performance among al1 the service innovation strategies. The financial firms' performances with this service innovation strategy were lower than with Steady Value-Added Strategy, it still provided benefits for firms. Also, according to the results the results of this study, Emerging Goals Strategy and Steady Value-Added would be useful for fmancial managers when considering why the financial performance were for all types of disruptive innovation. This study estimated that new service stages would increase firm performance, but also further produce costs in terms of project delay and project termination. However, these costs do not a宜ectinnovation performance at the frrm level (Cuijpers, Guenter and Hussinger, 2011). Therefore, this study
Chiao Da Management Review Vol. 33 No.2, 2013 61
suggests that managers whom cluster in the Emerging Goals S仕ategy might measure the potential opportunities of new service stages. That is, the service efficiency stage of the disruptive innovation creates more benefits than in the new servlce stage.
Prosperous Business Strategy focuses on sustaining innovation and the stage of new service. In contrast with the other strategies, the profile of firm performance was highest than Steady Value-Added Strategy and Emerging Goals Strategy. The findings suggest that sustaining innovation could stimulate the fmancial market and further attract the notice of customers in comparison to disruptive innovation in Taiwanese financial industry. Therefore, managers should modify the innovation
可pes and think twice about the feasibility of investing in new potential markets or developing more satisfaction which customer do not notice 企ompresent products and services. Jobnson, Christensen, and Kagermann (2008) suggested that maintaining a thriving business is recognizing when it needs a fundamental change, and business model innovation is more important for success than product or service innovation before formulating innovation activities. Therefore, this study also proposed that managers should rethink their firm's positions, construct a blueprint of how the firm will fulfill that need at a profit and further compare the model to the existing model to see how much to change is needed to capture the opportumty.
This study found that there was no firm clustered in Satisfactory Efficiency Strategy. Two reasons may explain such a situation. First, Taiwanese fmancial market only allows financial frrms with service innovation activities clustering in the other three service innovation strategies to possess competitive advantage. Thus, Satisfactory E宜iciency Strategy is not an appropriate strategy to operate in the financial industry in Taiwan, and managers should avoid adopting this strategy to develop more service innovation activities to explore potential opportunities.
Second, this study also considers that the possibility that only respondents of the other three service innovation s個tegies responded. Although managers cannot know the differences between other strategies, but the profile of firm performance of the Prosperous Business Strategy had the highest rating among all three
s仕ategies. Thus, managers should keep their firm's position an
62 Service lnnovation Strategies in Financial Service lndustry:
the Per，司pective01 Reverse Product Cycle and lnnovation Type
sustaining innovation and the stage of new service.
Furthermore, for the government viewpoint, every successful financial firm already operates according to an e旺ective business service innovation strategies and model. Government policy makers could investigate and explore the key successful points by systematically identi冉ring all of its constituent parts, more fmancial fmns can understand how the model fulfills a potent value proposition in a profitable way using certain key resources and key process to make more market opportunities from service innovation. With that understanding, they can then judge how well the same strategies could be used a radically different service innovation - and what they need to do to construct a new one to capitalize on that opportunity. Besides, managers whose organizations are confronting change must frrst determ.ine whether they have the resources required to succeed. They need to consider a separate question: does the organization have the processes and values it needs to succeed in this new situation? Because ofthe processes by which work for most managers is done and the values by which employees make their decisions have served them well in the past. This conceptual framework of study introduces into executive thinking is the idea that the very capabilities that make their organizations effective also define their disabilities to create more opportunities
Furthermore, for the government viewpoint, every successful financial firm already operates according to an e旺ective business service innovation strategies and model. Government policy makers could investigate and explore the key successful points by systematically identi冉ring all of its constituent parts, more fmancial fmns can understand how the model fulfills a potent value proposition in a profitable way using certain key resources and key process to make more market opportunities from service innovation. With that understanding, they can then judge how well the same strategies could be used a radically different service innovation - and what they need to do to construct a new one to capitalize on that opportunity. Besides, managers whose organizations are confronting change must frrst determ.ine whether they have the resources required to succeed. They need to consider a separate question: does the organization have the processes and values it needs to succeed in this new situation? Because ofthe processes by which work for most managers is done and the values by which employees make their decisions have served them well in the past. This conceptual framework of study introduces into executive thinking is the idea that the very capabilities that make their organizations effective also define their disabilities to create more opportunities