Interactivity innovations, competitive intensity, customer demand and performance

Abstract

Purpose The purpose of this study is to identify dimensions of interactivity service innovations and examine the moderating effect of external factors, i.e. customer demand and competitive intensity, on the relationship between such service innovations and service firm performance. Design/methodology/approach Data were collected at two levels; the first for validation; and the second for confirmatory and relationship analyses. Structural equation modeling was used in analyzing the relationship between interactivity innovation and service firm performance and environmental moderating effects. Findings The study found that high levels of interactivity innovations, in combination, drive superior performance. It was also found that deployment of high levels of interactivity innovations in high-demand periods is significantly related to high performance. The paper also found that the relationship between high interactivity innovation and financial performance is dampened by intense competition. Originality/value Unlike previous studies, this study found that it is rather high levels of service innovations that maximize performance in service firms operating in emerging economies and not just the implementation of such innovations, and that the implementation must be aligned to the prevailing environmental conditions.