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INNOVATION IN COMMODITIZED SERVICES: A STUDY IN THE PASSENGER AIRLINE INDUSTRY

Maximilian Rothkopf, A. Wald
Published 2011 · Economics

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The purpose of this study is to analyze how innovation is leveraged in a commoditized service industry. Focusing on the passenger airline industry, we describe the characteristics of commoditized industries and show how the airline industry fulfills these criteria. Based on a sample of 30 airlines, we detect patterns of innovations and explore how airlines utilize innovation in the various categories. We present two case studies to demonstrate different approaches to innovation. Based on these findings, we develop a framework that suggests innovation priorities for different business models. Finally, we propose four levers to expand the core service offering and to successfully position an airline in a commoditized market environment.
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