Service Innovation and Business Models : A Case Study of A Small Swedish ICT Company

Abstract: Innovation has become of increased importance to a company’ competitive advantage during the past years. Over the years, the importance of services has increased. Information and Tele- Communication Technologies (ICT) have become a supportive role in almost any type of industry. The ICT market is continuously changing at a very high pace. In order to cope with these changes, companies active within the IT and software industry needs to unceasingly maintain their solutions up to date. This thesis provides a case study on Digital Marketing AB, a small company active in the ITindustry, delivering tools for planning, sending, and analyzing digital marketing campaigns. Digital Marketing AB operates within a market that is changing rapidly. As new technologies emerge, existing technologies becomes known, and low-cost versions of the present technology appears in the market, eroding revenues from more differentiated services. Furthermore, if the companies are small, and do not have the same financial resources as bigger actors, it is important for these companies to rely on other types of strengths. Companies also need to make sure that they are able to sell the new technology in a way that is attractive to their customers, but at the same time profitable for the company. In other words, they need to integrate the new technology in a business model. The thesis concludes that Digital Marketing AB needs to develop new technology with regards to a specific target customer group, but also to work together with the customers in order to develop an attractive and competitive business model. Furthermore, the thesis concludes that how the business model will be designed will determine the success of adopting a new technology. Other issues that arise who have to do with the design of the business model are how to package and position the new technology.