New Service Development : of SMS-lending companies in Sweden

Abstract: Master Thesis Linnaeus University, School of Business and Economics, Växjö, Sweden Authors: Juan Calcerrada, Henrik Wapner Tutor: Sarah Philipson Title: New service development of SMS-lending companies in Sweden Introduction: Many customers started to get into debt from taking sms-loans during the last years with the news being highlighted in media frequently. After the financial crisis in 2008, new laws & regulations were imposed on the sms-lending companies. As of today, the sms- lending companies are still having problems with customers whose debts are being handled at the enforcement administration of Sweden. Purpose: The purpose of this paper is to identify the major barriers that serve as hinders for service development among sms-lending companies in Sweden. Method: A qualitative study has been conducted through semi-structured interviews with CEO’s, operation managers, and marketing managers of six companies in the sms-lending industry. Conclusion: The result shows that a standard model is not necessary for sms-lending companies in order to be profitable. However, none of the companies has a large share of the market, making it fragmented. Standardization in the market and problems to take patents on service innovation makes it difficult for the companies to innovate other than in their internal processes. The barriers to successful NSD processes are somewhat juridical and financial ones, but, although not mentioned by the interviewed companies themselves, we believe that the lack of customer involvement in the NSD process is serving as the major barrier. This is due to the fact that service companies are more dependent on customer interaction because of the service offerings being intangible, thus demanding a closely-monitored “fit” between service characteristics and customer requirements.