Abstract
Developing a unique competitive advantage is essential for a company to survive in the market. Service innovation is an analytic technique that can help determine ways to add value to existing products or services so as to maintain a high level of customer satisfaction. Currently, only a handful of analysis methods simultaneously involve service innovation, service performance evaluation, service family and service optimization. In this research, a new systematic approach incorporating these elements is presented. A case study shows that this methodology contains three significant advantages. First, service innovation can be achieved systematically. Second, Data Envelopment Analysis (DEA) screening helps identify efficient service concepts. Third, affinity diagrams and Particle Swarm Optimization (PSO) can help develop and optimize the service family, generating a win-win situation for both customers and service providers. The proposed approach allows providers to develop service packages that achieve high customer satisfaction in different market segments while maintaining economies of scale.