JAIST Repository
https://dspace.jaist.ac.jp/

Title

Value Co‑creation with Customer through Recursive
Approach Based on Japanese Omotenashi Service

Author(s)Belal, H. M.; Shirahada, Kunio; Kosaka, Michitaka

CitationInternational Journal of Business Administration,
4(1): 28‑38

Issue Date

2013‑01‑05

Type

Journal Article

Text version

publisher

URL

http://hdl.handle.net/10119/10948

RightsCopyright (C) The Author(s) 2013. H. M. Belal,
Kunio Shirahada, Michitaka Kosaka, International
Journal of Business Administration, 4(1), 2013,
pp.28‑38. http://dx.doi.org/10.5430/ijba.v4n1p28
This is an open access article published by
Sciedu Press under the terms and conditions of
the Creative Commons Attribution 3.0 license(http://creativecommons.org/licenses/by/3.0/),
which permits unrestricted use, distribution, andreproduction in any medium, provided the original
work is properly cited.

Description

Japan Advanced Institute of Science and Technology

www.sciedu.ca/ijba

International Journal of Business Administration

Vol. 4, No. 1; 2013

Value Co-creation with Customer through Recursive Approach Based onJapanese Omotenashi Service
H. M. Belal
Doctoral Program (Current), Japan Advanced Institute of Science and Technology
1-1 Asahidai, Nomi, Ishikawa 923-1292, Japan
Tel: 81-80-3280-6522

E-mail: belal@jaist.ac.jp

Dr. Kunio Shirahada
Associate Professor, Japan Advanced Institute of Science and Technology
1-1 Asahidai, Nomi, Ishikawa 923-1292, Japan
Tel: 81-761-511-747, 81-80-3727-3919

E-mail: kunios@jaist.ac.jp

Dr. Michitaka Kosaka (Corresponding author)
Dean & professor, Japan Advanced Institute of Science and Technology
1-1 Asahidai, Nomi, Ishikawa 923-1292, Japan
Tel: 81-761-511-745

E-mail: kosa@jaist.ac.jp

Received: November 28, 2012

Accepted: December 23, 2012

Online Published: January 5, 2013

doi:10.5430/ijba.v4n1p28

URL: http://dx.doi.org/10.5430/ijba.v4n1p28

The authors would like to acknowledge the Japanese Grants-in-Aid for Scientific Research (KAKENHI
No.24510186) for financially supporting this research. Authors also thank our laboratory colleagues and researchers
as well as business partners who gave their valuable time by sharing their knowledge and providing their valuable
insights that have helped in conducting this study.
Abstract
Currently, it is a fundamental intent of a company to deliver a true solution for its users that may co-create value andindicate a servitizing company. To produce a true solution expected by a customer is very difficult, as the expected
responses between customer and company usually has a gap. Therefore, this paper proposes a design method that isable to address the gaps between customers and company expectation and fill-up those gaps by gathering necessary
knowledge or resources from the customer within a recursive approach concept. In addition, this study analyzes the
behaviors of service providers in Japanese “Omotenashi”, where the provided service gradually fit into customers’
requirements according to their communication. We can apply this practice to any other organization, both in thepure service or manufacturing industry for service value co-creation. This research also discusses the application of
the proposed notion to adapting servitization based on the effect of two real-life case studies.
Keywords: Recursive approach, Knowledge space, Value co-creation, Servitization, Collaboration, Customer
expectations
1. Introducation
Today, services are a ubiquitous fraction of a firm’s strategic mission and corporate planning rather than thinking as
product maintenance tools. More and more corporations are shifting their vision from offering a typical product orservice to total solutions aiming to translate the customers’ expectations as well as esuring value co-creation. The
developed economies have already started to delivere value rather than typical goods by shifting their market sharefrom manufacturing to more product-service oriented systems (Wise and Baumgartner 1999; Neely, 2008). Therefore
the reality is that the world is becoming more oriented toward services; the escalation of services is one of the key
Published by Sciedu Press

28

ISSN 1923-4007

E-ISSN 1923-4015

www.sciedu.ca/ijba

International Journal of Business Administration

Vol. 4, No. 1; 2013

trends witnessed.
Service is an economic activity that creates value and provides benefits for a customer at specific times and places bybringing about a desired change in, or on be-half of, the recipient of the service (Lovelock & Writez, 2004). Again aservice is also the application of specialized competences (knowledge and skill) through deeds, processes, andperformances for the benefit of another entity or the entity of itself (Vargo & Lusch, 2004). Hence it is providing theclear message that the value is co-created through the joint attempt of firms, employees, customers, stakeholders,
government agencies, and other entities related to any given exchange (Vargo et.al., 2008; Vargo & Lusch, 2008)
where the knowledge space (Belal, Shirahada & Kosaka, 2012) is creating, that is, a source of making a required
solution as well as value. The service specification for value creation usually depends on the condition (i.e. humancharacteristics, needs, place, time, cost and others.). In this case, the service provider needs to realize what kind ofservice could be perfect in which condition for the customers, but it is truly problematic to detect the perfect service
for an appropriate solution that can satisfy the customer as well as co-create value with customer. The recursive
approach can execute a significant role to select what kind of solution is required by users’ and which service as well
product is needed for producing it as this approach is able to attend to the gaps between customers and company
expectation and can fill those gaps by assembling necessary knowledge or resources from the knowledge space.
Therefore, this research aims to present the analysis of a recursive approach for value co-creation by harmonizing
service provider’s offerings and customer’s hopes based on the Japanese “omotenashi” belief. This can become acore method to make a true customer centric vision basis company. The rest of the paper is organized as follows: in
Section 2, we analyze the Japanese“omotenashi”service principle as issue of service solution for co-creating value.
This section also offers a model on behalf of the service value co-creation process and debates on knowledge spaceand recursive process in enhancing service value with customer .Section 3 designates the implementation of theJapanese “omotenashi” service for manufacturing industry that signifies as value provider. Section 4 verifies andexamines the real-life case study that performs value co-creation with the customer. The final section then concludes
this article with a summary.
2. Subjects in Service Solution
2.1 Japanese ‘Omotenashi’ Service
The Japanese service quality, culture and background come mainly from their heart i.e. ‘omotenashi’. The‘omotenashi’ in Japan has very big significance that is to fullfill the guest’s requirements by presenting superservices from the core of the heart without expectation of any return, and the ability to actualize that idea into action.
Thus, though it has a meaning similar to that of hospitality in English, it bears the image of Japanese hospitality
which also suggests a deeper part of the recognition of a human being.
The Japanese hotel industry is really unique in service offerings. This sector is committed to offer exclusive andtailored service for customer, i.e. welcome greetings, dinner, hot spring, after dinner service, night service, morning
service, breakfast, and Farewell greetings as well. Those kinds of service have become an important driver of market
acquisition and increasing brand value for hotel industry. Here we can claim about hot spring Spa service in Japanese
hotel, that it is influencing not only how consumers manage their health, appearance, and stress, but also how
consumers socialize, spiritualize, travel, and work (Suna, Yoo & Boger, 1989). To a Japanese typical high namevalue hotel usually belong a room clerk and concierge, who perform core character in a business development system.
These two characters are providing almost the same service but they have a completely different spirit.The room
clerk ensures all of services under stay until a customer arrives at a hotel and comes out of a hotel.
The crew, (who is in charge) is scheduled to prepare a midnight snack, fruit, service of breakfast, and various
services such as liquidation and a send-off. From the first time of guest (customer) arrival, the room clerk usuallyoffers the welcome greeting service, then gradually the room clerk provides all kinds of services, like: guidance to aroom, preparation of dinner, tea or other items until the customer leaves a hotel. It creates the feeling of satisfaction
with a customer that leads to retain a customer. Thus, the room clerk is performing a core role for gatheringknowledge and improving service that considers raising the degree of satisfaction of service and to co-create value
with customer.
Again, the concierge is performing another key role for conveying the outstanding service that is considered to reply
a customer's question properly. In the time questioning and answering, the various knowledge and experience whicha concierge has employed from a customer's viewpoint and response to which a customer is made satisfied is
calculated. Therefore, in this way, a concierge becomes able to collect various kinds of information and reviews
those collected information, or adds necessary information that pleases a customer and also ensures his loyalty. A
Published by Sciedu Press

29

ISSN 1923-4007

E-ISSN 1923-4015

www.sciedu.ca/ijba

International Journal of Business Administration

Vol. 4, No. 1; 2013

roomclerk's and concierge’s service can be described, as seen in Fig.1, as a process.
The performance of both room clerk's activities and a concierge's are like: service delivering as well as offering, andthrough its process are obtained significant knowledge or resources from the customer then it is added to the existingknowledge of the company, and the combined competence of knowledge (called knowledge space, Belal et.al., 2012)
becomes a leading source of creating expected solution for recipents. By utilizing that source the service provider
can grasp the customer's needs and feature. The customer, who feels comfortable by the type of services that isoffered, and who become desires by what service points that can be distinguished slowly and then the service
provider becomes able to produce as well as provide the required and suitable service for every customer. Therefore,
according to time, both the service quality and performance are increasing based on user experience that is creating
values for both parties.
2.2 Service Value Co-creation Process Model
The service offering structure and action by the room clerk and concierge (in section 2.1) was realized as a process ofinnovating services successively as well as raising the quality of service for harmonizing with customers’
instructions.
Thus, when this process was expressed as a model, it is shown in Fig.2. Here the service provider applies its
knowledge from past experience, the informer accomplishes his/her work according to the discrepancy of thecustomer, and has memorized as some characteristic representation customers' persona and it is decided from thereaction of the service to an actual customer whether it is applied to which persona. The determined persona, hasvery close characteristic with an actual customer, and has a source of service offering by which the persona may or
may not satisfy. In the meantime the gap is also available between the expected reaction to the provided service andthe actual reaction. Therefore, to eliminate this gap, it is essential that the service provider analyzes the rest of thegap (both external and internal), and has to enhance or innovate service or product for further offerings based on the
gap analysis.
When this practice is arranged constantly by the service provider, then such gap may diminish over time and lastly it
not arises. By carrying out this exercise, it becomes a service process which can co-create value with the customer
and make them satisfied.
2.3 Application of Recursive Approach for Enhancing Service Value in Japanese Omotenashi Service
Today it is discussed that the ‘value’ is playing a major role in keeping customers coming back to the same service
provider and the ‘offering type’ like; from tangible products supported with a maintenance service to total services(Boyer, Hallowell & Roth, 2003) is performing a major role to adding value on core products. The characteristics ofservice and its presence in an integrated offering, employees in the providing organization and the end customers end
up in a co-production relationship (Bowen & Ford. 2002). The unit of co-production varies on the organizational
effective design process and some characteristics of customer participation for example; demands, needs,
expectations, behavior, experience, mindset etc. In addition it is reviled from the executive viewpoint, that when an
organization forming a value proposition focused on the customer experience, then it should carefully regard on
potential interactions between the components of the customer experience (Gentile & Spiller, 2007). This study has
already provided some idea in section 2.2 about recursive process that is very effective for enhancing the service
value process. In this section we want to explain more preciously about the significance of recursive process forvalue co-creation through analyzing the provider-recipient expectation gap. In this phase, the inquiry tries to explain
the recursive processes step by step as follows:
Preliminary Step; set-up persona: According to the basis of persona, the service provider typically offers services, as
all customers’ demands and expectations are not the same. It is dependent on the particular time, situation andcharacteristics as well. Therefore from the primary stage, the company (service provider) categorizes the type of
persona (i.e. Persona-A, Persona-B, Persona-C or more) but it very often may not be genuine.
Secondary stage; service attribute specification: In the secondary stage, the company specifies the service line-up for
offerings to customer according to corresponding with the persona type, i.e. for persona ‘A’ company proposes aparticular set of services (welcome grating, dining and drink, opera, spa, cost etc.) and the quality of minded services
also is determined from the primary period of value propositions. By the same way for persona ‘B’, or for persona‘C’ or for persona ‘N’, the service provider offer specific set of services that are already designed for specific type of
persona.
Final stage; Service gap investigation and solution: In the last stage, the service provider is offering a determined setof services for customers’ (i.e. service line-up-A for persona-A) but usually it is difficult to meet the real expectations
Published by Sciedu Press

30

ISSN 1923-4007

E-ISSN 1923-4015

www.sciedu.ca/ijba

International Journal of Business Administration

Vol. 4, No. 1; 2013of customers’. Thus the company detects the gap (including external and internal) by analyzing the expected
response and true response. Based on the gap identification, the service provider can also become able to find theright type of persona. Hence, by realizing the type of persona and their expectations, the company tries to redesign its
production, service or offerings systems as well as enhance information, skill and other necessary evidence(minimizing internal gap) aiming to meet customers’ needs (reducing the external gap). Table 1 explains therecursive process according to step by step are as follows;
Hence, the recursive process is an exclusive mode that is very able to notify the necessary information continuously
to the service provider according to the realization of the value and its requirement to enhance the corporation’soffering until the expectation gap between the customer and the company becomes zero. So, this process is truly
practical for estimating the users’ (the special customer also qualifies as a user; i.e. Steve Jobs, Mike parker etc.)
experiences, and is also capable to provide exact proposals of offerings according to the time demand.
3. Omotenashi Principle in Manufacturing Industry
3.1 Application of Recursive Process for Value Co-creation in Manufacturing Company
The manufacturing profitability has been declining especially in developed economies. The manufacturing firmcannot compete on the basis of cost (Neely, 2007). Van Looy, Van Dierdonck, and Gemme (2009) claimed that,nowadays, a value-creating process with a product (e.g., driving) is required by the customer, but does not require theproduct itself (e.g., a car). Services are competent to deliver continuous value and revenue through the life cycle ofproducts (i.e. proactive maintenance by remote monitoring). Thus it is claimed by Vandermerwe and Rada
(Vandermerwe & Rada, 1988) that the modern corporations are increasingly offering fuller market packages orbundles of customer-focused combinations of goods, services, support, self-service, and knowledge. Additionally, it
is also noted that the increasing numbers of corporations throughout the world were adding value to their core
corporate offerings through services. Therefore, the clear message is the manufacturing companies’ goals to shiftthem as ‘value provider’ rather than ‘typical goods seller’ through services on its focal product. But this value
offering process successful adaptation is problematic, as the organization was well structured to offer only traditional
goods, but now it desires to offer a total value package to recipients.
According to this state, the organization has realized that, for qualifying as a value source, it must stay connectedwith their working partners and at the same time also make a connection with the customer that becomes evidence torespond effectively and efficiently to their requirements. The uninterrupted link provides update experience overtime to the service provider which is a very beneficial source for realizing, designing and delivering the expectedvalue to the customer. The recursive approach is applicable to sustain with the global business trend as well as for
gaining competitive advantages. This concept is used to control complex dynamic systems such as continuous
manufacturing processes and, by applying it, the organization becomes well known concerning the appropriate
service based on user experience that is required by the customer (user) as well as to co-create value.
Toyota Motor Corporation (Liker & Morgan, 2006) is a world leading Japan-based car manufacturer with a visionfocusing on the customer. This auto maker promised to deliver higher value through an innovative product (i.e.
Crown, Prius) for meeting consumer demand, where Toyota is estimating user experiences recursively (both negativeand positive experiences through the ‘Kaizen-Hansei’ principle) from the market, and its utilization is helping torealize which service or what kind of product is required by the market. Then, Toyota is managing for more vehicles
launches annually through less cost with expected customer services than most of their competitors. This practicelogically communicates with the customer of every Toyota project and is creating mutual understanding and value.
Accordingly, Toyota becomes successful at lock-in customers and lock-out competitors which made its market
capitalization greater than GM, Ford, and DCX combined, with a continuing growth in market share targeted to be
15 percent of the global market. Therefore, it is debatable that the recursive approach is very active for a traditional
manufacturing company to assess customer experience and a very clear requirement of identifying the process bywhich a manufacturer can come to understand market demands and can produce appropriate services or products formeeting the market’s as well as customers’expectations.
3.2 Significance of Customer Experience for Interpreting Omotenashi Principle
Customer experience is a pioneer to the customer’s holistic perception of value (Lemke, Fred & Clark, Moira &Wilson 2003). The concept of customer experience in business or the belief of customer as decision maker was first
conceived in 1980. Pine and Gilmore (Gilmore & Pine, 1997) represent that the customer experience is a key driverof a new economic offering, which emerges as the next step after commodities, goods and services in what they callthe progression of economic value.
Published by Sciedu Press

31

ISSN 1923-4007

E-ISSN 1923-4015

www.sciedu.ca/ijba

International Journal of Business Administration

Vol. 4, No. 1; 2013

However, Lock-in customers and lock-out competitors through offering unique value to recipents are now a main
intent of the company. For translating this vision or for meeting with the omotenashi principle, (that is promised to
fullfill the guest’s requirements by presenting super services from the core of the heart), some essential drivers areplaying a significant role. The customer experience is one of them. Recently, many organizations have begun
building in experiential content or moving to a strong experiential positioning (Gilmore & Pine, 1997). The company
is concentrating very much on customer value proposition, and for that, the assessment of customer experience ismuch needed. In this perspective, the company is trying to increase its relationship with recipients, which activity
helps to understand as well as helps to monitor the real response of recipients. Therefore, the continuous
communication is determined by the company with recipients for gathering updated experience. Such experienceplays a fundamental role in determining the customers’ likings, which then effect their decisions of purchasing
respecting time demand.
Value is not added by goods or created by services, it is embedded in the actual experience created through active
participation, as believed by Prahalad and Ramaswamy (Prahalad & Ramaswamy. V., 2004). Karl Erik Sveiby alsodeclared without a doubt that “competence is transferred most effectively when the recipient participates in theprocess”. Therefore, an active contribution of consumer experiences (Karl Erik Sveiby, 1997) as well as theachievement of true experience through an endless process or by recursion could become a key responsible for value
co-creation that is making a company a value provider and satisfy the customer.
4. Value Co-creation with Customer through Recursive Approach; Verification through Real-life Case
4.1 Case-1; Toyota Motor Corporation (Womack et.al.,1990 & Branco et.al., 2004)
Purpose: To analyze the Toyota Motor Corporation’s ‘Hansei-Kaizen’ process for problem-solving, recognizing that
continuously solving root problems drives organizational learning for delivering total value to customer and create awin-win situation that is helping to touch the omotenashi concept.
Company Vision and Philosophy: To produce a reliable vehicle and sustainable development of society by employing
innovative and high-quality products and services for the customer.
Company background: In 1937 (August 28), Kiichiro Toyoda founded Toyota. It is a offshoot to create automobiles
from his father’s company Toyota Industries. The Toyota Group is one of the largest conglomerates in the world,which is involved not only with automobile-related businesses including Toyota, Lexus, Hino and Daihatsu; but alsowith several “non-automotive” companies, like; Housing, Financial Activities, ITS, GAZOO, Marine, Biotechnology& Afforestation and New Business Enterprises.
However, Toyota Motor Corporation is a multinational corporation that is frequently acknowledged as Toyota. It is
the world’s largest automobile manufacturer by sales and targeted fifteen percent global market share. The
headquarter of Toyota is located in Toyota City, Aichi prefecture, Japan.
Performance of recursive approach based on omotenashi in Toyota Motor Corporation: In 2004, the ‘Toyota Way’
became a hit worldwide, because it extremely explored the notion of Japanese “omotenashi” into the underlying
value serving culture and thinking that manifests as the tools and techniques generally associated with leanmanufacturing. However, it is Toyota’s goal to ensure total value for users. With this belief, the company exceeded
its expectations and was rewarded with a smile. Therefore, the company practices the ‘Toyota Way’, where lean
services not in the manufacturing lateral but by scrutinizing Toyota’s Product development system as the product (i.e.
car) is the core offer for customer. Successively, how Toyota has translated the Japanese “omotenashi” to develop its
product as value. In this case, Toyota become a learning as well as practicing organization over reflection (Hansei)
and continuous improvement (Kaizen).
The general meaning of ‘Hansei’ is reflection, but it is fitting much more in Japan where it is a central idea inJapanese culture. In Japan, it is learned from childhood. Every young Japanese child knows that when he/she does
something wrong: he/she is asked to engage in ‘hansei’ for further improvement or for nearing perfection in the
future. He/she expresses deeply about his/her failing, and vows to improve and never do it again. Therefore in the‘hansei’ belief, the prominence is on what was the mistake or gap, and on redesigning clear plans as well as adding
more information for continuous improvement (Kaizen) to ensuring that the gap is minimized. Hence, in another
word, it means to recognize the mistake or gap and to pledge improvement.
The typical Japanese meaning of `Kaizen` is improvement, which denotes practices involving continuous
improvement. Today kaizen is active in government, manufacturing, banking, engineering, healthcare service, gamedevelopment, business management and others industries. It is also implemented in many other settings as well justnot only productivity and business.
Published by Sciedu Press

32

ISSN 1923-4007

E-ISSN 1923-4015

www.sciedu.ca/ijba

International Journal of Business Administration

Vol. 4, No. 1; 2013

However, at Toyota the main culture is ‘a process for problem-solving and recognizing that continuously deliver
premium solution (service or product) over reflection (Hansei) and constant improvement (Kaizen)’ based on
customers` experiences. Therefore, after a project s isuccessfully completed, there is also a reflection meeting(Hansei-kai) to analyze where and what was missing or a gap (including external and internal). Although Toyota
knows that it was a successful project, after all the company finds opportunities for improvement in the future basedon the users and market experiences. This is especiall in view of value co-creation with customers.
By this continuous process, Toyota examines the gap or weakness in a project and, according to the gap analysis
experience, the company takes further initiatives for filling up those lacks or minimize those gaps (via improvement
services or evidence on its core offerings, e.g. a hybrid car). We can claim that this practice of Toyota is an‘appropriate solution development system’ through a recursive process.
This exercise has effects on managing time, cost and quality as well as innovation of a product or service that is
meeting customers’ required needs and demands which typically are co-creating value. Therefore, Toyota is well
accepted by the world market and has become one of the ten largest companies in the globe. Additionally, it became
the largest car manufacturer in 2007 where the main code was a recursive process practice of translating the‘omotenashi’ notion. The practice of recursive process for value co-creation in Toyota is shown in Fig. 4 and in Table
2 respectively;
4.2 Case-2; Samsung Electronics Co., Ltd. (Gyewan Moon et.al., 2011)
Purpose: Analyze continuously the customer needs and the market evolution in order to introduce novelties andbecome a cutting edge value provider enterpriseCompany Vision and Philosophy: "Inspire the World, Create the Future." Samsung Electronics (SE) is commited toinspiring its communities and to promoting new value for Samsung's core networks Industry, Partners, andEmployees.
An overview of the company: Samsung Electronics (SE) founded by Lee Bung-Chull in 1938 with the aim of world
leadership and securing overwhelming competitive strength. Currently this South Korean multinational corporationis enjoying the world's largest and leading electronics and information technology company with a revenue of
US$ 119.1 billion and an operating profit of US$ 9,920 million. The company acquired a marvelous market share inboth domestic and in global markets by focusing on four business areas: Digital Media, Semiconductors,
Telecommunication Networks, and LCD Digital Appliances. SE exceeded Motorola by becoming the world’s second
largest mobile phone maker in 2007, and became the world’s largest technology company by overtaking
Hewlett-Packard (HP, USA) and Siemens (Germany) by US$125 billion in sales globally in 2009. However, still it
has promissed to keep its point at the top level as a product innovative company by converging, expanding andassimilating its products, services and technologies.
Recursive approach practice based on omotenashi in SE: In 1980 SE originated the Gumi branch and it is anindependent entity of SE which is known as SE Gumi. It performs an important role of business in SE. Here the main
operative product is mobile phones (80%) and fax machines (20%). In the mobile handset perspective, the global
market is currently dominated by the big six manufacturers: Nokia (37%), Samsung (13.7%) and Motorola (13%)
and then followed by Siemens, Sony Ericsson and LG Electronics. However, this kind of sound performance by SE
Gumi is the result of optimizing their product and service inoovation continuously based on the customer
requirements. According to recognizing customer experience and fulfil the customers’ demands the SE Gumi
followed the recursive process, where the company wants to minimize the gap between the company and customer
expectations step by step.
The SE Gumi introduced the ‘ProTeam’ Project which is performing with 35% of their employees. This projectbuilding internal atmosphere and culture through integrates the people (employees) and their knowledge in themobile phone manufacturing process. But it has not been enough roles to direct into innovative activities concerning
the mobile phone manufacturing process that can satisfy customers. The company has tried to increase the efficiency
and effectiveness of innovation of its services or products by only its internal knowledge but it is realized that there isa huge lack of innovative ideas due to the gap with market. For the offer to acquire the market as well as satisfy thecustomer, it is necessary to meet with customer needs, expectation and demands. Therefore, SE Gumi created anorganizational mechanism called ‘reinventing the wheel’, where the company is able to develop new explicit or tacitknowledge through supporting knowledge sharing between the company and the user, and by utilizing‘brainstorming hours’. This redesigned knowledge is used in any type of innovative activity, not only in the new
product and service design and development, but also to solve intricate troubles and suggestions by thinking about
Published by Sciedu Press

33

ISSN 1923-4007

E-ISSN 1923-4015

www.sciedu.ca/ijba

International Journal of Business Administration

Vol. 4, No. 1; 2013

customers’ requirements.
The customer’s requirements vary in time and more specifically, it depends on the type of customer, the situation andthe culture as well. From the viewpoint of the mobile phones business, it is very much driven by attractive device
design and user interface configuration rather than only by advanced software and operating systems (Accenture,2005). It stands as a big challenge for the company, since understanding customers’ needs is a costly and inexact
process and even when customers think they know what they want, they often cannot transfer that information to
manufacturers completely (Baloh et.al., 2007). Thus SE Gumi has designed the integration of customers andsuppliers into the innovation process, for example; the ‘Customer decision groups and focus groups’ is used fortesting and feedback from Korean consumers, by which both parties (customer and company) become able to gatherinternal and external knowledge or experience. This experience helps the company to modify recursively any of its
existing products, processes, services or frameworks according to market demands. Again, for honoring theworldwide clientele's expectations and matching with others region as well as culture, a user-friendly ‘toolkit’ hasbeen developed by SE Gumi, where it suggests a Lego-style virtual external (phone housing, accessories) and ahuman–computer interface (software functionalities) design to a preferred costumers group (mobile phone users)from any backgrounds and any ecological locations. This is why this approach is performing as a mutual cooperative
playground for provider and recipients to create a required solution as well as value that can meet any andeverywhere’s customers’ anticipations gradually.
5. Conclusion
Service is a fundamental source of value creation and now its main business goal is to sustain the market by creating
value. ‘Omotenashi’ (Japanese hospitality) symbolizes a complete value delivery ethics that is promised to satisfy
guests. According to the current business viewpoint, typical manufacturers are aiming to offer a sophisticated service
for adding as well as creating more value on its main product that helps to sustain the global market. The Japanese‘omotenashi’ ethics is performing as a core inspiration for it but if the provider cannot simplify the true prospects ofrecipients then this unique ethics will not be working for value co-creation.
This research has introduced the recursive approach, which is usually very suitable as an estimator for the
linear-quadratic problem (Branco & Sanjeev, 2004) in the engineering field, but here we argued that this approach isalso fits very well in the commercial business. It is very good in continuous service innovation processes throughgathering customer’s update experience over time and estimating the internal and external gap of the company’s
expected responses and customer’s true responses. In the view of service value co-creation, this approach categorizes
the true persona types via analyzing feedbacks of the provider and recipient, that helps to contributing right solutions
to the right type of persona based on the Japanese ‘omotenashi’ principle. Therefore this win-win situation isbuilding between both parties and reducing risk for the performing company by improving its competitive position in
the business market.
This paper analyzed the data through the business process of the Japanese Hotel industry, Toyota Motor Corporationand Samsung Electronics Co., Ltd., where it is suggested, when an organization transforms from a product-focused
to customer focused background, then it must become service-centric and be capable of responding much more
actively and rapidly to the customer (Oliva & Kallenberg, 2003). Therefore, for identifying and understanding thecustomers, their requirements and gathering knowledge from them is essential. In this case the recursive process is avigorous approach for analyzing the user experience aim to minimize the gap to zero through producing or offering
an expected solution for the customer that undoubtly co-creates value with the customer and means that a company isa servitized value liberator.
References
Accenture. (2005). Leadership in Customer Services: New Expectations, New Experiences. [Online] Available:
http://www.accenture.com/Countries/Canada/index.htm (July14, 2006)
Baloh, P., Awazu, Y., Desouza, K. C., Wecht, C. H., Kim, J. Y., & Jha, S. (2007, August). Roles of information
technology in distributed and open innovation process. International Proceedings of the thirteenth Americas
conference on information systems, Keystone, CO, USA.
Belal, H., Shirahada, K., & Kosaka, M. (2012). Knowledge Space Concept and Its Application for Servitizing
Manufacturing Industry. Journal of Service Science and Management, 5(2), 187-195.
Bowen, J., & Ford, R.C. (2002). Managing Service Organizations: Does Having a’Thing’ Make a Difference?
Journal of Management, 28(3), 447-469.

Published by Sciedu Press

34

ISSN 1923-4007

E-ISSN 1923-4015

www.sciedu.ca/ijba

International Journal of Business Administration

Vol. 4, No. 1; 2013

Branco, R., Sanjeev, A., & Neil, G. (2004). Beyond the Kalman filter; Partical filter for tracking application. U.S.A:
Library of Congress Cataloging-in-Publication data.
Gentile, C., & Spiller, N. (2007). How to sustain the customer experience; An overview of experience componentsthat co-create value with customer. European Management Journal, 25(5), 395-410.
Gilmore, J., & Pine, II J. (1997). The four faces of mass-customization. Harvard Business Review, 75(1), 91-101.
Gyewan M., Chungshin P., Dong K., & Choi, Y.S. (2011). Effective implimentations of communities of practices(CoPs) in knowledge habits; a case study of Samaung Electronics. International Journal of Services and Operation
Management, 8(3), 335-346. http://dx.doi.org/10.1504/IJSOM.2011.038976
Lemke, F., Clark, M., & Wilson, H. (2003). Customer experience quality: an exploration in business and consumer
contexts using repertory grid technique. Journal of the Academy of Marketing Science, 39, 846-869.
Liker, J. K., & Morgan, J. M. (2006). The Toyota Way in Services: The Case of Lean Product Development.
Academy of Management Perspectives, 20(2), 5-20.
Lovelock, C., & Writez, J. (2004). Service Marketing- People, Technology, Strategy (5th ed.) Upper SaddleRiver,
New Jersey: Pearson Prentice Hall, (Chapter 1).
Neely, A. (2007). The Servitization of Manufacturing: An Analysis of Global Trends. Paper presented at 14th
European Operations Management Association Conference, Ankara, Turkey.
Neely, A. (2008a). Exploring the Financial Consequences of the Servitization of Manufacturing. Journal Operations
Management Research, 1(2), 103-118. http://dx.doi.org/10.1007/s12063-009-0015-5
Oliva, R., & Kallenberg, R. (2003). Managing the transition from products to services. International Journal ofService Industry Management, 14(2), 160-172.
Powar, K. S., Beltagui A., & Riedel, J. C. K. H. (2009). The PSO Triangle: Designing Product, Service andOrganization to Create Value. International Journal of Operations and Production Management, 29(5), 468-493.
http://dx.doi.org/10.1108/01443570910953595
Prahalad, C.L., & Ramaswamy, V. (2004). Co-creation experience the next practice in value creation. Journal ofInteractive Marketingt, 18(13), 5-14.
Suna K.J., Jung-Eun Yoo, & Boger Jr., C.A. (1989). Importance-performance analysis with benefit segmentation of
spa goers. International Journal of Contemporary Hospitality Management, 22(5), 718-735.
Sveiby, K.E. (1997). The New Organizational Wealth; Managing and Masuring Knowledge-Based Assets. 450
Sansome Street, suit 1200, San Francisco, CA: Berrett-Koehler Publishers Inc. (Chapter 4).
Vandermerwe, S., & Rada, J. (1988). Servitization of Business: Adding Value by Adding Services. European
Management Journal, 6(4), 314-324. http://dx.doi.org/10.1016/0263-2373 (88)90033-3
Vargo, S. L., & Lusch, R. F. (2004). Evolving to a New Dominant Logic for Marketing. Journal of Marketing, 68(1),1-17. http://dx.doi.org/10.1509/jmkg.68.1.1.24036
Vargo, S. L., & Lusch, R. F. (2008a). Service Dominant Logic: Continuing the Evolution. Journal of the Academy ofMarketing Science, 36(1), 1-10. http://dx.doi.org/10.1007/s11747-007-0069-6
Vargo, S. L., Maglio, P. P., & Akaka, M. A. (2008). On Value and Value Co-Creation: A Service Systems andService Logic Perspective. European Management Journal, 26(3), 145-152.
Wise, R., & Baumgartner, P. (1999). Go downstream: the new profit imperative in manufacturing. Harvard Business
Review, 77(5), 133-141.
Womack, J.P., Jones, D.T., & Roos, D. (1990). The machine that changed the world. New York, NY: MacMillan
Press (Chapter 3).
Yaping, G. (2011). Comparative studies of Service Approach between Kyakushitsu Staff in Japanese Inn and Hotel
Concierge. Unpublished Master dissertation, Japan Advanced Institute of Science of Technology, Japan.

Published by Sciedu Press

35

ISSN 1923-4007

E-ISSN 1923-4015

www.sciedu.ca/ijba

International Journal of Business Administration

Vol. 4, No. 1; 2013

Table 1. Practical action stage of recursive approach
Steps
Activity
Description
Step-1
Provide service
The company (service provider) provides a specific set ofservices that is designed for particular persona.
Step-2
Response realization
Recognizing facts that the recipients are becoming satisfied
by a specific set of services or not, or what their actual
expectations are.
Step-3
Gap identification
The service provider identifies the gap between the expected
response and the true response, because the customer
expectations and the offerings usually have some lack.
Step-4

Identify the persona

After gap identification, the company becomes able torecognize the true type of persona.

Step-5

Gap analysis

Step-6

To offer expected service

Currently the company knows the real type of persona andtheir anticipations as well, so it becomes the duty of acompany to analyze the gap for determining which precise
services they must offer.
Allowing to the result of the ‘gap study’, the company
develops its services and offers it to the customer.

Step-7

Gap becomes zeroIf the companies enhance their product or service
recursively and provide those to the customer, then once thegap between the customer and the company’s expectation
will become zero.

Table 2. An analysis based on practical action stage for Toyota Motor Corporation
Steps
Activity
Description
Step-1
Provide service
Toyota offers a definite Car with a set of services that is
thinking for a certain persona.
Step-2
Realize response
Realizing data that the recipients are getting satisfied bycurrent offerings or not and collecting a true response fromthe market and from ‘Hansei-kai’.
Step-3
Identify the gap
Toyota recognizes the gap between the expected response
and the true response based on crew data.
Step-4
Identify the persona
After identifying the gap, Toyota became able to grasp theexact customers’ group.
Step-5
Analyze the gap
By analyzing the offerings gap, Toyota develops its productor service (car) on the belief of its Kaizen practice.
Step-6
Offer expected service
The developed or innovative product or service (car) offers
to customer as well as to market as a suitable solution.
Step-7
The Gap become Zeros
The users are becoming satisfied by new or enhanced
product or services, which is meeting customer demands.

Published by Sciedu Press

36

ISSN 1923-4007

E-ISSN 1923-4015

www.sciedu.ca/ijba

International Journal of Business Administration

Vol. 4, No. 1; 2013

Table 3. Investigation of the practice of SE based on practical action stage
Steps
Step-1
Step-2
Step-3
Step-4
Step-5

Step-6
Step-7

Activity
Serviceoffering
Response
realization
Find thegap
Identify themarket(persona)Gap
analysisand idea
generation
Deliver
predictable
service
Minimizing
gap

Description
SE determines specific designed mobile phone (utilizing ProTeam’s experience) with
precise of service for assured type of customer
The views of market (including domestic and global market) are realizing current
offerings.
SE Gumi identifies expected feedback and true feedback based on market data (using themechanism of ‘reinventing the wheel, Costumer decision groups and focus groups,
toolkit etc.)
After identifying the gap of feedback the SE Gumi usually holds about market and its
requirments.
By examining the gap of product/service offering, the company improves its offering
invention (mobilr phone) on the belief of ‘omotenashi’.
The innovative as well as developed product or service (mobile phone) offers to market
as proper resolution.
After getting a solution from the company, the customer becomes satisfied and also
performs as a loyal customer.

Figure 1. Service value co-creation process in hotel industry centered on Japanese omotenashi (Yaping Gao, 2011)

Figure 2. A recursive model for service value co-creation process
Published by Sciedu Press

37

ISSN 1923-4007

E-ISSN 1923-4015

www.sciedu.ca/ijba

International Journal of Business Administration

Vol. 4, No. 1; 2013

Figure 3. User’s experience in the value co-creation process

Figure 4. Value co-creation process of Toyota with customer through ‘Hansei and Kaizen’ practice

Figure 5. Recursive approach exercise in Samsung Electronic

Published by Sciedu Press

38

ISSN 1923-4007

E-ISSN 1923-4015