Hurtigruten) As a Case

Service development: Modelling influencing factors by employing the Norwegian Coastal Voyage (Hurtigruten) as a case Hugo Skaalsvik 1* and Jon-Arild Johannessen 2 Received: 14/02/2012 Accepted: 02/11/2012 1 Department of Business Administration and Social Sciences, Harstad University College, Havnegata 5-7, 9480 Harstad, Norway; e-mail: [email protected] 2 Oslo School of Management, Oslo, Norway, and Harstad University College, Harstad, Norway * Corresponding author Abstract This paper reports research on a service development study carried out on the prestigious Norwegian Coastal Voyage (NCV), also known as the Hurtigruten, which is the brand name. The primary research instrument employed in the research was in-depth interviews with service managers and service personnel employed on the Hurtigruten. This paper reports on findings on influencing factors to service development and suggests how the identified factors influence service development on the Hurtigruten. A model is suggested that depicts these factors, which are grouped into company internal, company external and system factors. The study advances the knowledge field of service development particularly relevant for a high-contact service such as a cruise operation. © 2013 International University College. All rights reserved Keywords: service development, service innovation, qualitative research, case study research, Norwegian Coastal Voyage (NCV), Hurtigruten Citation: Skaalsvik, H. & Johannessen, J.-A. (2013). Service development: Modelling influencing factors by employing the Norwegian Coastal Voyage (Hurtigruten) as a case. European Journal of Tourism Research 6(1), 53-73. Introduction the “third wave” (Toffler, 1981), the service Substantial innovation research has been sector has increased in importance carried out in mostly large manufacturing (Kandampully, 2007). The shift from a organisations over the last few decades, but production- to a knowledge-oriented economy studies on innovation in the service sector have (Kim and Mauborgne, 1999) has been given received relatively little attention from academic various labels in the research literature such as researchers (Johne and Storey, 1998; de the information economy, the service economy, Bretani, 2001; Oke, 2007). However, as or even the “new economy” (Grönroos, Western societies in particular have moved into 2000:11). Today, the importance of services in RESEARCH PAPER 53 Service development: Modelling influencing factors by employing the Norwegian Coastal Voyage (Hurtigruten) as a case. industrialised countries is substantial since study of innovation (Rothwell, 1992; Trott, more than two-thirds of the entire “workforce is 2005). employed in services” (Gummesson, 2000:7). Hence, service industries constitute a major Service development is considered to be a part of the total economic activity and major challenge, as well as an opportunity employment in Western economies, and the faced by service management and marketing service sector offers a tremendous potential for managers (Eastingwood, 1986; Johne and growth and profitability (Martin and Horne, Storey, 1998; Sundbo, 1997), due to the 1992; de Jong and Vermeulen, 2003; Oke, process of internationalisation and enhanced 2007). In this situation, the requirements for competition in an internationally oriented and flexibility, speed, renewal, change and growing service sector (de Bretani, 1995; Bitner innovation in enterprises have enhanced in et al., 2000; Lovelock et al., 2001). In order to order to compete effectively in the new stay ahead in fierce and global competition, marketplace (Trott, 2005). service enterprises have to constantly plan for, develop and implement new services As associated with economic growth, (Edvardsson et al., 1995). However, innovative employment and prosperity in society (Drucker, progress is difficult to accomplish in services 1985), innovation has become one of the (Dörner et al., 2011). One reason for this is that fastest growing research fields within the many innovations in services are quite easy to management area. Innovation research is a imitate (de Jong and Vermeulen, 2003), with fundamental study of change processes, another reason being that the barriers to entry knowledge development and knowledge in many services are relatively low (op.cit.). integration in social systems (Johannessen et Consequently, service managers need al., 1997:668-669). However, today a new knowledge, skills and competencies on how stream of innovation research has gradually innovations in services are adequately planned, emerged in relation to service innovation or organised, managed and implemented in their service development that reflects the own businesses. movement of societies into communities of services (Droege et al., 2009). However, The aim of this paper is to enhance the according to de Jong and Vermeulen (2003), knowledge base on service development, as many service firms struggle with their more research on this topic in service innovative efforts in competitive environments, enterprises is called for (Alam and Perry, 2002; which, in its extreme form is termed “hyper- Dörner et al., 2011), which is done by exploring competition” by D’Aveni (1994). Today, service service development on the famous and firms are at the heart of many modern prestigious Norwegian Coastal Voyage, also societies, but still, many service firms are not known as the Hurtigruten, which is the brand very innovative (de Jong and Vermeulen, name. As a high-contact- and consumer- 2003). oriented service, the Hurtigruten is an interesting research setting as the most famous The concepts of service development and and important tourism attraction product in service innovation have been applied Norway. In order to examine service interchangeably in the research literature development on the Hurtigruten, the research (Menor et al., 2002). In this paper, for the most must encompass an historic dimension. As a part, the concept service development is result of the fact that the tourism dimension of employed. The core of the concept is similar to the Hurtigruten increased in importance by the what Leiponen (2005) perceives as a service introduction of new and modern explorer cruise innovation, which is “new service development ships in the early 1990s, the context of this which involves changes in the process of paper encompasses two shipping lines, which delivering existing services and the generation at that time were operating in the Hurtigruten of new services”. This definition implies a trade: the Troms Fylkes Dampskipsselskap A/S process view of service development, which is (TFDS) and the Vesteraalen and Ofoten consistent with a systemic approach to the Dampskipsselskap A/S (OVDS). Since the two shipping lines successfully merged in 2006, the 54 Skaalsvik, H. & Johannessen, J. (2013) / European Journal of Tourism Research 6(1), 53-73. research context also encompasses the and reported in this paper will be presented merged shipping line: the Hurtigruten, ASA and discussed. The research reported on is (see Appendix 1 for informative details on the being carried out at the firm level, with the Hurtigruten). The choice of a cruise line context literature review being organised into three for the study is highly relevant, as this industry parts. First, the schools of thought in new is in “an early stage of development” service development will be described. Second, (Biederman, 2008:197), with the growth perspectives and models of innovations will be potential being high. reviewed, and lastly a section on success factors to service development will end this part The research addresses two important of the paper. questions: 1. What key factors influence service Schools of thought in new service development development on the Hurtigruten? How scientific knowledge on service innovation 2. How do the identified factors influence develops is at the heart of service innovation service development on the Hurtigruten? research (Droege et al., 2009). As one example, Coombs and Miles (2000) suggested To answer the questions posed, the paper is three schools of thought in service innovation organised in six parts. Following this research: those of assimilation, demarcation introduction, Part 2 entails a discussion on a and synthesis, all of which have been applied selection of the research literature on service by other researchers as well (e.g. Drejer, 2004; development in service enterprises. In Part 3, de Vriess, 2006). Similarly, Gallouj (1998) and the research methodology is presented and Sundbo et al. (2007) have suggested three discussed, while in Part 4, the findings are distinct phases of knowledge development on presented. Part 5 involves the discussion part, service innovation: those of a technologist-, a whereas Part 6 outlines the implications and demarcation- and a synthesis phase. The core conclusions to be drawn from the study. The idea of the typologies suggested is to outline limitations of the study are outlined in this part and describe the differences which exist on and further research is suggested. how innovation in services develops and progresses. Literature review A review of the extant literature on service In a review of the literature on service development reveals a picture of incomplete innovation, Droege et al. (2009) suggest four knowledge (Alam and Perry, 2002). While the schools of thought on service development, a academic literature on tangible product technologist-, assimilation-, demarcation- and development is quite comprehensive

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