The Analysis of Service Innovation on competitive advantage

IN THE ZIMBABWE Insurance Industry:

A CASE FOR BANCASSURANCE

By
Blessing Magayo

2143172
A DISSERTATION SUBMITTED TO THE INSURANCE INSTITUTE OF ZIMBAMBWE

IN PARTNERSHIP WITH NUST IN FULFILMENT OF THE REQUIREMENTS FOR

FOR A FELLOWSHIP IN INSURANCE

SUPERVISOR: MR S. SIBANDA

YEAR:2021-2022

i
 DISSERTATION RELEASE FORM

I certify that the following student………………………………………………………………………………………………………

Student number …………………………………………………………………………………..was under my supervision

I further certify that he/she has attended all the scheduled meetings with my me and that he/she has
fulfilled all the requirements that I set before him/her as the supervisor

It is my professional judgement that the dissertation is of a sufficiently high standard as to be submitted

with my name to it as the Supervisor.

I hereby release the student without reservation to submit his/her dissertation for marking.

Name of Supervisor …………………………………………………………………………………………………………………………….

Signature……………………………………………………………………………..

Date ………………………………………………………………………………….

i
 DECLARATATION
This statement should be completed and signed by the student producing the dissertation.

Declaration and Statement of Authorship:

I Blessing Magayo declare that this project is a product of my own work. Due credence was
given to all the sources and material used in this project. This project has never been
submitted, nor will it ever be, to another University in the awarding of a degree

ii
 ACKNOWLEDGMENT
My sincere gratitude goes to my supervisor for his abundant guidance throughout the study.
Many thanks well to my lecturers who sharpened my academic skills throughout my entire
degree program. Family and friends are also not to be excluded as they offered emotional and
social support

iii
 DEDICATION
I dedicate this special body of work to my family

iv
 ABSTRACT
Bancassurance industry in Zimbabwe has been lagging behind interms of promoting service
innovation. Therefore, the gist of the study is to give an analysis on the effect of service
innovation on competitive advantage of bancassurance firms in Zimbabwe. The overall objective
of the study was to establish the role of service innovation in enhancing competitive advantage.
The study was guided by the main research question which states that to what extent does service
innovation emnhance competitive advantage in the bancassurance industry.The study was guided
by three topical theories namely Resource-based view, Dynamic capabilities theory and
Technology acceptance model. Pragmatism research approach was used in this study. This
approach allows both qualitative and quantitative aspects to be used simultanously . A sample
size of 217 respondents was used. To solicit data structured questionnaires and interviews were
utilised. A pearson’s correlation co-efficient was employed. Study results indicated that to a
greater extent service innovation has been implemented by bancassurance firms. However, this
result is not reflective of the reality on the ground. In addition, results revealed that the adoption
of service innovation is impeded by a number of factors which include demographics of workers,
company location, manager’s innovativeness among others. The study recommends that
bancassurance firms should incorporate policies that promoten service innovation. The study
recmmends future researcher researchers to look at the effect of service innovation on
competitive advantage of non-bancassurance firms.

Table of Contents

v
DISSERTATION RELEASE FORM........................................................................................................i
DECLARATATION..................................................................................................................................ii
ACKNOWLEDGMENT..........................................................................................................................iii
DEDICATION..........................................................................................................................................iv
ABSTRACT...............................................................................................................................................v
List of Tables.............................................................................................................................................ix
List of Figures............................................................................................................................................x
INTRODUCTION AND BACKGROUND..............................................................................................1
1.0 Introduction.......................................................................................................................................1

1.1 Background to the study....................................................................................................................1

1.2 Statement of the problem.................................................................................................................2

1.3 Research objectives...........................................................................................................................3

1.4 Research questions............................................................................................................................3

1.5 Significance of the study....................................................................................................................4

1.5.1 The regulator...............................................................................................................................4

1.5.2 The student.................................................................................................................................4
1.5.3 The bank.....................................................................................................................................4
1.5.4 Insurance companies...................................................................................................................4
1.6 Scope of the study.............................................................................................................................5

1.7 Limitations of the study.....................................................................................................................5

1.7.1 Unwillingness of some respondents to divulge information.......................................................5

1.7.2 Covid 19.....................................................................................................................................5
1.7.3 Tariff increase.............................................................................................................................5
1.7.4 Limited resources........................................................................................................................6
CHAPTER TWO.......................................................................................................................................7
LITERATURE REVIEW.........................................................................................................................7
2.0 Introduction.......................................................................................................................................7

2.1 Innovation..........................................................................................................................................7

2.2 Service innovation.............................................................................................................................8

vi
 2.3 Theoretical framework......................................................................................................................8

2.3.1 Resource Based View......................................................................................................................8

2.3.2 Dynamic Capabilities Theory...................................................................................................10

2.3.3 The Technology Acceptance Model (TAM).............................................................................12
2.3.4 Diffusion of Innovations Theory...............................................................................................13
2.3.5 Service innovation theory.........................................................................................................15
2.4 The extent to which service innovation has been adopted by the Bancassurance industry............16

2.5 Factors that influence the intention to use service innovation.......................................................20

2.5.1 Firm size...................................................................................................................................20

2.5.2 Management support.................................................................................................................20
2.5.3 Competition..............................................................................................................................21
2.5.4 Relative advantage....................................................................................................................22
2.5.5 External support........................................................................................................................22
2.6 The relationship between service innovation and competitive advantage......................................22

2.7 The role of service innovation in enhancing Bancassurance’ competitive advantage.....................23

2.8 Barriers to service innovation in Bancassurance in Zimbabwe........................................................24

.2.9 Conceptual framework...................................................................................................................26

2.10 Chapter summary..........................................................................................................................26

CHAPTER THREE.................................................................................................................................28
RESEARCH METHODOLOGY...........................................................................................................28
3.0 Introduction.....................................................................................................................................28

3.1 Research philosophy........................................................................................................................28

3.1.1 Positivism.................................................................................................................................28
3.1.1.1 Justification of positivism......................................................................................................29
3.2 Research design...............................................................................................................................29

3.2.1 Explaratory research design......................................................................................................29

3.2.1 Justification of explaratory research design..............................................................................29
3.3 Population.......................................................................................................................................30

3.4 Sample size......................................................................................................................................31

vii
 3.5 Sampling procedures.......................................................................................................................32

3.5.1 Justification of stratified sampling............................................................................................33

3.6 Sources of data................................................................................................................................33

3.7 Research Instruments/ Data collection methods.............................................................................33

3.7.1 Structured questionnaire...........................................................................................................33

3.7.1.1 Justification of structured questionnaire.................................................................................34
3.7.2 Interview guide.........................................................................................................................34
3.7.2 Justification of interview guide.................................................................................................34
3.8 Data collection.................................................................................................................................34

3.9 Methods of data analysis.................................................................................................................35

3.10 Reliability test................................................................................................................................35

3.11 Validity...........................................................................................................................................35

3.12 Ethical considerations....................................................................................................................36

3.13 Chapter summary..........................................................................................................................36

CHAPTER 4............................................................................................................................................37
DATA PRESENTATION AND ANALYSIS.........................................................................................37
4.0 Introduction.....................................................................................................................................37

4.1 Response Rate.................................................................................................................................37

4.2 Reliability.........................................................................................................................................37

4.3 Demographic Variables....................................................................................................................38

4.3.1 Gender......................................................................................................................................38
4.3.2 Age...........................................................................................................................................39
4.3.4 Work Experience......................................................................................................................41
4.4 Main Findings..................................................................................................................................41

4.5 Chapter Summary............................................................................................................................48

CHAPTER FIVE.....................................................................................................................................49
SUMMARY, CONCLUSION AND RECOMMENDATIONS............................................................49
5.1 Introduction.....................................................................................................................................49

viii
 5.2 Summary of the study......................................................................................................................49

5.3 Summary of main findings...............................................................................................................50

5.3.0 The extent to which service innovation has been adopted by the Bancassurance industry........50
5.3.1 Factors that influence the intention to use service innovation...................................................50
5.3.2 The relationship between service innovation and competitive advantage.................................50
5.3.4 The role of service innovation in enhancing Bancassurance’ competitive advantage...............51
5.3.5 Barriers to service innovation in Bancassurance in Zimbabwe.................................................51
5.4 Conclusion...................................................................................................................................51
5.5 Policy recommendations.................................................................................................................52

5.6 Study Limitations.............................................................................................................................53

5.7 Areas of further studies...................................................................................................................53

References................................................................................................................................................53
Questionnaire...........................................................................................................................................55

ix
 List of Tables
Table 3.1 Population class…………………………………………………………………….30

Table 3.2 Krejcie and Morgan method………………………………………………………..31

Table 3.3 Sample size determination………………………………………………………….32

Table 4.1 Response rate……………………………………………………………………….37

Table 4.2 Reliability…………………………………………………………………………..38

Table 4.3 Age distribution…………………………………………………………………….39

Table 4.4 Educational Level…………………………………………………………………..40

Table 4.5 Work Experience…………………………………………………………………...41

Table 4.6 Concept of Service innovation……………………………………………………..42

Table 4.7 Adoption of Service Innovation…………………………………………………....43

Table 4.8 Factors influencing the use of service innovation………………………………….44

Table 4.9 Relationship between service innovation and competitive advantage……………..45

Table 4.10 Role of service innovation………………………………………………………...46

Table 4.11 Barries to service innovation adoption…………………………………………....47

Table 4.12 Correlation………………………………………………………………………...48

x
 List of Figures
Figure 2.1 Dynamic capabilities and performance……………………………………………11

Figure 2.2 Diffusion of innovation theory………………………………………………….....14

Figure 2.3 Consequences of service innovation………………………………………………16

Figure 4.3 Gender Distribution………………………………………………………………...39

xi
 CHAPTER ONE

INTRODUCTION AND BACKGROUND

1.0 Introduction
This study looks at the influence of service innovation on gaining a competitive edge in
Zimbabwe's banking business. This proposal will contain the study's background, problem
statement, research objectives, research questions, and conclusions.The scope of the study, a
review of the literature, and the study's methodology.

1.1 Background to the study

The insurance and banking organizations in Zimbabwe have been entering into strategic alliances
known as bancassurance in a bid to diversify their income streams against the backdrop of a
liquidity crisis in the economy (Masiyiwa, 2014). There has been stiff competition in the
bancassurance industry in Zimbabwe and companies in the bancassurance sector have been
failing to find new ways of communicating and creating dialogue with potential and existing
customers (Mazikana, 2018). Some have been resorting to service innovation as a way of
achieving a competitive edge over rivals.

Kasera (2018) noted that bancassurance organizations in both developing and developed
countries play a pivotal role in the process of economic growth. Bancassurance organizations
significantly contribute to employment creation, income generation and development in urban
and rural areas. Bancassurance has played a critical role in the development of the economy. In
some countries like Taiwan, Hong Kong and Singapore, bancassurance continues to make
significant contributions to the goals of employment creation, promotion of economic growth
and poverty alleviation (Huang, 2016). Innovation is crucial for bancassurance. Because of
globalization of markets, with a high rivalry environment, rapid technological changes as well as
shorter product and technology lifestyles, innovation and growth are important for economic
performance of bancassurance (Bayarcelik et al., 2016). Innovation is regarded as a crucial
source of competitive advantage for bancassurance (Huang, 2016).

The issue of service innovation has been a topic of many debates for decades (Carroll, 2018). All
types of organizations have been criticised in some manner for failing to address client issues via
innovation (Mazikana, 2018). According to current thought, the relationship between customer

1
service and customers should be founded on service innovation (Carroll, 2018). Historically, the
major concern of business was to manufacture commodities and provide services to society
(Mazikana, 2018). The business sector has been charged with a new set of responsibilities,
namely, improving customer service and performance through service innovation. Studies on the
link between service innovation and companies have revealed that the advantages to firms from
implementing service innovation are considerable (Aaker, 2016). Balmer (2017) denotes that
organizations who engage in service innovation benefits in terms of increased product,
recognition, financial performance and competitive advantage.

To obtain a competitive advantage, banking organizations like as Ecobank, Stanbic, and CBZ
have turned to service innovation. According to Jenkins (2014), the tactics utilized by major
banking firms to innovate are inadequate. Banks do not have a good understanding of the tactics
that may be employed to participate in service innovation initiatives (Spence, 2014). In
Zimbabwe, studies on the innovation of banking organizations lack thorough information on the
socioeconomic issues that impact banking businesses when it comes to embracing service
innovation (Morsing and Perrini, 2014). It is unclear if the benefits of service innovation that
accrue to other larger corporations in European nations also apply to Bancassurance entities
(Morsing and Perrini, 2018). Although service innovation has grown more significant in the
corporate sector, relatively little research has been conducted to promote the growth of service
innovation in developing-country banking firms (Blomback and Wigren, 2015 in Moyeen and
Courvisanos, 2019). It is also alleged that banks in underdeveloped nations (including
Zimbabwe) participate in some type of service innovation, despite the fact that their actions are
not formally documented in either print or electronic media (Moyeen and Courvisianos, 2012).
Against this backdrop, the purpose of this research is to acquire a better understanding of the
nature of service innovation by banking firms in Zimbabwe.

1.2 Statement of the problem

Despite the importance of innovation to stimulate growth in Bancassurance organizations,
research on the impetus for service innovation and competitive advantage of Bancassurance
organizations in Zimbabwe remains shallow. Hardly any research has been directed towards
developing economies and Zimbabwe in particular on the factors that stimulate service
innovation and competitive advantage in Bancassurance organizations. Most Bancassurance

2
organizations in Zimbabwe have been struggling to gain a competitive advantage over rivals.
This has hindered them from making meaningful contributions to economic development and
addressing the social ills facing the country. Given the grounds in which Bancassurance
organizations are operating in; there is a need for them to be innovative if they have to break the
impediments for competitive advantage (Aziz and Samad, 2016). This study seeks to analyse the
impact of service innovation on achieving a competitive advantage in the Bancassurance industry
in Zimbabwe.

1.3 Research objectives

The main objective of the study is to investigate the analysis of service innovation on
competitive advantage in the Insurance Industry: a case for Bancassurance. The specific
objectives of the study are;
i. To determine the extent to which service innovation has been adopted by the
Bancassurance industry in Zimbabwe.
ii. To identify factors that influence the use of service innovation by the Bancassurance
industry in Zimbabwe.
iii. To establish the relationship between service innovation and competitive advantage in the
Bancassurance industry in Zimbabwe
iv. To identify the role of Bancassurance’ in developing a competitive advantage.
v. To identify the barriers to service innovation in Bancassurance in Zimbabwe.

1.4 Research questions

The research questions are as follows;
i. To what extent have Bancassurance firms adopted service innovation in Zimbabwe?
ii. What are the factors influencing the use of service innovation by the Bancassurance
industry in Zimbabwe?
iii. Is there a relationship between service innovation and competitive advantage in the
Bancassurance industry in Zimbabwe?
iv. What is the role of service innovation in enhancing Bancassurance’ competitive
advantage?
v. What are the barriers to service innovation in Bancassurance in Zimbabwe?

3
1.5 Significance of the study
This study makes three significant contributions to stakeholders such as the regulator, the
student, banks and insurance companies.

1.5.1 The regulator

This study may be appropriate for the regulator in perspective of the factors that require attention
if the Bancassurance in Zimbabwe are to achieve their significant part in economic development.
This study when done will enable the regulator to adopt a service innovation model which will
assist organizations to attain competitive advantage.

1.5.2 The student

The student may benefit in getting insights on the analysis of service innovation on competitive
advantage in the Insurance Industry. This study provides new understandings into service
innovation by Bancassurance organizations in Zimbabwe. This study will assist the student for
him to be a better communicator as well as attainment of his fellowship in insurance.

1.5.3 The bank

Banks will benefit from this study in making decisions on innovation as they are also in the
insurance industry for them to remain relevant.

1.5.4 Insurance companies

Management of insurance companies will benefit from this study and get insights on how their
organizations can attain a competitive advantage through service innovation. Through this study
insurance organizations can identify factors that influence the intention to use service innovation
by the Bancassurance industry in Zimbabwe, get to know the role of service innovation in
enhancing Bancassurance’ competitive advantage as well as identifying the barriers to service
innovation in Bancassurance in Zimbabwe.

4
1.6 Scope of the study
The research is limited to Bancassurance organizations in Zimbabwe. The area was selected due
to the proximity to the researcher and convenience. The study will focus on The analysis of
service innovation on competitive advantage in the Insurance Industry: a case for Bancassurance.
The respondents of this study will be limited to employees and managers of Bancassurance firms
in Zimbabwe. The study will be confined to a period of between 2015 up to date where most
Bancassurance started adopting service innovation.

1.7 Limitations of the study

This section shows limitations, which has been faced by the researcher

1.7.1 Unwillingness of some respondents to divulge information

Some of the respondents of the study were not eager to divulge information on The analysis of
service innovation on competitive advantage in the Zimbabwe Insurance Industry: a case for
Bancassurance. Some respondents thought it was associated with organizational politics.
Meanwhile the researcher had to show all respondents an introductory letter from Midlands
University and his student identity card for them to release information in relation to the study.

1.7.2 Covid 19

Covid 19 affected the study in the sense that the researcher could not meet all respondents in
time. He had to visit the organization for many days to avoid meeting many respondents at once.
The researcher followed WHO (2019) covid 19 guidelines

1.7.3 Tariff increase

Some network operators such as Econet increased their network tariffs, which affected literature
review gathering in this study. The researcher ended up acquiring a mifi device, which he used to
complete literature review of the research.

5
1.7.4 Limited resources

The researcher faced limited resource constraints. He had to print some questionnaires, contact
all respondents and her supervisor to ask for guidance and follow-ups on each submitted chapter.
He also had to travel to meet all respondents hence he needed funds to support these activities.
Meanwhile the researcher had to acquire a loan from relatives and friends.

6
 CHAPTER TWO
LITERATURE REVIEW

2.0 Introduction
This study is on the analysis of service innovation on competitive advantage in the Zimbabwe
Insurance Industry: a case for Bancassurance. This chapter presents a literature review of the
study. This chapter focused on the definitions of key theories in service innovation, models, key
concepts and frameworks that underpin the two aspects. The chapter looked at the contributions
of other researchers on the same topic locally and from various parts of the world to build
implication to the problem identified in the introduction. The chapter also discusses empirical
literature relevant to the research topic at hand. All the factors in the conceptual framework are
connected to the research question and hypothesis laid out in the study introduction.

2.1 Innovation
Innovation is described as the development and subsequent modification of market offers,
business processes, or models as a consequence of the use of technology (Nambisan et al., 2017).
Business innovation has evolved into a driving force (Barrett, Davidson and Vargo, 2015).
Innovation is described as the development and subsequent modification of market offers,
business processes, or models as a consequence of the use of technology (Nambisan et al., 2017).
Business and societal innovation are now propelled by innovation (Barrett, Davidson and Vargo,
2015). Rapid technological advancement in areas such as mobile, social media platforms, cloud
computing, analytics, and the internet of things during the last decade has enabled fundamentally
new combinations of digital and physical components that result in unique goods and services
(Yoo, Henfridsson and Lyytinen, 2017; Barrett, Davidson and Vargo, 2015). These novel
combinations rely on digitalization, or the conversion of analog data into digital data. Innovation
includes a wide spectrum of innovative product, platform, service, and customer experience
possibilities (Nambisan et al., 2017).

7
Tidd et al. (2017) defined innovation as the process of transforming opportunity into new ideas
and bringing them into widespread usage. Alternatively, Baregheh et al. (2018) describe
innovation as the multi–stage process through which firms transform ideas into new or improved
goods, services, or processes in order to successfully develop, compete, and differentiate
themselves in their marketplace. Product innovation, according to Freeman (2012), is a process
that involves the technical design, research and development, production, management, and
commercial activities associated with the sale of a new or better product. Mazikana (2018)
described collaborative innovation as partnering and cooperating with other industry actors to
manufacture and sell a product. Product innovation is important, according to Wheelwright and
Clark (2012), because of three fundamental trends: fierce worldwide rivalry, fragmented and
demanding markets, and varied and constantly evolving technology

2.2 Service innovation

Although new goods have been viewed as the "cutting edge" of market innovation (Tidd et al.,
2015), process innovations have demonstrated to have a substantial strategic influence on
competitiveness. Service innovation includes the deployment of quality functions and the
reengineering of business processes (Cumming, 1998).Organizations in the service and
manufacturing industries have been aiming to adopt service innovations so as to create value and
stay competitive (Berry, 2016). According to Berry (2016) service innovation refers to the
exploitation of an idea for a performance that is new to the organization and perceived by
customers to provide new benefits.

2.3 Theoretical framework

According to Kelly (2008), marketing theorists employ a scientific method to explain customers'
purchasing attitudes and behaviors. Companies utilize this data to help them decide how to
effectively communicate the value of their products to consumers. Service innovation presents
issues in this respect because its channels are relatively young and continually expanding,
particularly in Zimbabwe's power industry. It is vital to apply theories to service innovation that
reflect both its parallels and distinctions with conventional, analog channels.

2.3.1 Resource Based View

This research is founded on a resource-based perspective and dynamic capacity theory. The
resource-based view theory derives from the work of Penrose (1959), however the perspective

8
was previously offered accidently by Wernerfelt (1984). A resource-based perspective (RBV)
stresses the firm's resources as the primary determinants of competitive advantage and
performance. The model initially considers that an entity within an industry or within a strategic
group may be diverse in terms of the resource bundle that they manage (Bridoux, 2017). The
second assumption is that resource heterogeneity may persist over time due to the fact that the
resources required to implement a firm's plans are not fully transportable between enterprises.
One of the most frequently recognized theories of strategic management is the resource-based
concept (Powell, 2011). New organizational resources may boost strategic flexibility by allowing
organizations to capitalize on new possibilities (Rangone, 2018). The RBV might be viewed as a
"inside-out" strategy formulation process: starting with the business's internal resources, their
potential for value production must be examined in order to design a strategy that allows the firm
to produce maximum value in a sustainable manner (Grant, 2011; Barney, 1986). As a result, the
firm's product development strategy is governed by the resources available and the capacity to
deploy them in the most effective manner to achieve good performance.

Organizations must also prioritize the use of resources that cannot be replaced. If other firms can
produce software programs that are identical to the organization's present software, the
organization no longer has a competitive edge. According to Chen et al. (2014), the
organizational culture, structure, and process of a corporation must support its resources.
Without these aspects, a company would be unable to use its assets and capitalize on its
competitive edge. An organization's leader must identify resources and determine which ones
satisfy these requirements. Clarke and Adler (2016) divide these resources into three categories:
human capital, physical capital, and organizational capital.

Based on this classification, an organization should create a list and then try to determine which
resources are uncommon, unique or expensive to duplicate, valuable, and non-substitutable. The
RBV's primary message is attractive, quickly absorbed, and simply taught due to its exquisite
simplicity and instant face validity. However, the RBV has been heavily criticized for a number
of flaws. Critiques are useful for furthering the RBV since they reveal where improvements may
be made by understanding its limits. Along similar lines, one may categorize and evaluate the
eight kinds of critiques already accessible, adding remarks on their intensity and impact. It is
possible that the RBV's basic message can survive five of these criticisms rather well,

9
particularly when the RBV's variables, bounds, and application are more explicitly established.
Three, however, pose a danger to the RBV's standing as a key theory.

RBV, on the other hand, is chastised for lacking management consequences or 'operational
legitimacy' (Priem and Butler, 2011). It instructs managers to create resources and a proper
organization, but does not specify how (Miller, 2003). The RBV also conjures the 'illusion of
ultimate control,' trivializing property rights concerns and inflating managers' capacity to
regulate or foresee the value of resources (Priem and Butler, 2011). According to Connor (2012),
the RBV only applies to large, market-powerful enterprises. He contends that because the SCA
of smaller and more nimble enterprises cannot be founded on static resources, they fall outside of
the RBV. RBV attempts to develop a strong theory. As a new firm theory, Conner (2012)
presented the RBV. They came to the conclusion that the RBV aims to be a firm theory that is
significantly different from other extant firm theories, notably transaction cost economics (TCE)
(Williamson and Winter, 1991).

2.3.2 Dynamic Capabilities Theory

David Teece, Gary Pisano, and Shuen Chen invented the term "dynamic capability" (Chien and
Tsai, 2012). The notion outlines an organization's capacity to structure its resources strategically
in order to increase performance. According to Chien and Tsai (2012), dynamic capacity is an
organization's ability to actively alter its resource base. An organization's ability to respond to
external developments should be adequate and timely. This necessitates the implementation of
several strategies that will harness and put to use the organization's various capabilities
(Chikomwe, 2019). This will enable the organization to integrate, grow, and capitalize on its
environmental competitive advantage. The present corporate landscape is, indeed, quite active.
Dynamic capability philosophy is founded on Schumpeterian thinking, which sees dynamic
capability as another rent-creating process based on organizational competencies (Schumpeter,
1950). Dynamic capacity is a competitive advantage hypothesis that applies to dynamically
changing circumstances. A business model is an architecture that outlines how a company
develops and provides value to consumers, as well as the processes used to collect a portion of
that value. It is a coordinated set of factors that includes the flows of expenses, revenues, and
profits. As the relationship to profits demonstrates, the success of a corporation is dependent on
the design and execution of business models as much as it is on the selection of technologies and

10
the operation of real assets and equipment. The business model outlines a strategy for converting
technical innovation and know-how, as well as the use of tangible and intangible assets, into a
profit stream (Teece, 1986, Teece, 2006).
Eisenhardt and Martin (2010) defined dynamic capabilities as a collection of distinct and
identifiable processes that are 'idiosyncratic' in detail and 'dependent' in their progress. This
thesis, created by Shuen, Teece, and Pisano in 1905, said that an organization should mobilize
and coordinate its resources in order to increase performance. This idea is applicable in this study
since bancassurance businesses are implementing driver safety technologies to obtain a
competitive advantage over rivals, hence using these systems gives them a competitive
advantage. Some people devise unique techniques for utilizing these technologies. According to
Wilden, Gudergan, Nielsen, and Lings (2013), dynamic capabilities such as driver safety systems
might result in organizational performance, as demonstrated in figure 2.1 below.

Figure 2.1: Dynamic capabilities and performance: A contingency framework

Source: Wilden, Gudergan, Nielsen & Lings (2013)

11
According to Widen, Gudergan, Nielsen & Lings (2013) dynamic capabilities are considered
widely to cater for processes that fosters organization to gain a superior organizational
performance over a period of time for example using driver safety systems. Using driver safety
systems requires bancassurance organizations to devise various strategies for them to be a
success and brings organizational performanceDynamic capacities of businesses may explain the
creation of disparities in firm performance within an industry (Zott, 2010). Zott (2010)
discovered performance related qualities of dynamic capabilities such as product innovativeness
and learning to deploy dynamic capabilities by combining concepts from both strategic and
organizational theory. Dynamic capacity is concerned with organizational competitive survival
rather than resource-based views of achieving long-term competitive advantage (Bailey, 2015).
The dynamic capability hypothesis defines an organization's ability to actively build, extend, or
adjust its resource base, which relates to the strategy and organization chosen to fulfill its goals.
Changes in organizational structures, culture, marketing, and client tastes and preferences are all
adopting a new direction (Chikomwe, 2019; Kingori, 2016; Kamotho, 2020). As a result,
companies must be able to adapt to these changes in the most effective way possible. According
to the dynamic capacity hypothesis, only firms that can do this will be able to break even in this
competitive environment (Chien & Tsai, 2012). One of the critiques leveled against the dynamic
capabilities notion is that it is difficult to experimentally quantify them, as well as the underlying
operational processes and the link between dynamic capabilities and company performance.
2.3.3 The Technology Acceptance Model (TAM)

The technology acceptance model (TAM), according to Jalang'o (2015), is an information

systems theory that describes how people come to accept and use a technology. According to the
concept, when consumers are faced with new technology, a variety of factors impact their
decision about how and when to utilize it, most notably perceived utility. Davis (2010) defined
perceived ease-of-use as the degree to which a person believes using a particular system would
improve his or her job performance; Jalang'o (2015) noted that this was defined by Davis (2010)
as the degree to which a person believes using a particular system would be free of effort (Davis,
2010). Understanding why humans accept or reject computers is one of the most difficult topics
in information systems (Swanson, 2018).

12
The test exhibited predictive validity for intent to use, self-reported usage, and attitude toward
use, according to Szajna (2012). The findings of this research study have proven the validity of
the Davis (2010) instrument and support its application with various user demographics and
software options. For more than two decades, user adoption of technology has been an important
subject of research (Jalang'o, 2015). Although various models have been suggested to describe
and forecast system use, the technology acceptance model has received the greatest attention
from the information systems community. According to Jalang'o (2015), anyone interested in
studying user acceptance of technology must first comprehend the technology acceptance
paradigm. This literature review summarizes the evolution of the technology acceptance model,
its important applications, expansions, limits, and criticisms from a select list of published works
on the subject to offer a historical picture.

Current data show that, while the technology acceptance model is widely used, researchers have
varied feelings about its theoretical assumptions and actual usefulness. It is concluded that
research in the technology acceptance model lacks the rigor and relevance required to establish it
as a well-established theory in the IS community.

2.3.4 Diffusion of Innovations Theory

Rogers developed this theory in 1962 with the aim of explaining how a product or service is
adopted over a period of time in this case driver safety systems gain momentum and spread in
organizations through a specific population. This theory can be applied in this study where Banc
assurance organizations have adopted the use of service innovation to attain competitive
advantage. Diffusion has been defined by Rogers (1962) in Amin (2019) as a process whereby
people have to learn about a certain innovation or system adoption. Figure 2.2 below shows this
innovations theory

13
Figure 2.2: Diffusions of innovation theory
Source: Amin (2019)
Figure 2.2 above shows the diffusion of innovation models which shows various stages in
product adoption. According to Rogers (1962) in Amin (2019) when a service is introduced its
adoption is a process where some organizations adopt it earlier than others. When it comes to
using services some organizations are innovators. Some Bancassurance organizations in
Zimbabwe are very conservative and are bound by organizational culture. They do not just adopt
new services but they wait for other organizations to adopt these systems.
Diffusion is the method through which an invention is conveyed to members of a social system
over time through certain routes (Bailey, 2015). An innovation is defined as a novel concept,
activity, or item seen by an individual or other unit of adoption. Communication is the process
through which parties generate and share information with one another in order to achieve
mutual understanding (Rogers, 2017). According to the innovation-decision process model, the
adoption of an innovation is a process that occurs over time rather than a single act. When
interacting with an invention, potential adopters go through five stages. The first step is
knowledge, which occurs when potential adopters learn about an invention and develop a
rudimentary grasp of what it is and how it works. The second step is persuasion, in which
potential adopters acquire an opinion about the invention, which might be favorable or negative.
The invention is only adopted or rejected during the third stage decision. The fourth step,
implementation, is when the invention is put into action.

14
2.3.5 Service innovation theory

In a study by Kjos (2015), it showed that a definition was constructed from different authors, and
came up with an integrated service innovation definition that described the service as intangible,
instantaneously manufactured and used at the same time often customized to a client’s needs.
Therefore service innovation enables the organization to convert ideas into new or value added
services so as to be able further and be competitive and set apart from competition in a manner
that makes them succeed in the market. Other authors defined service innovation differently;
novelty in services is described as the interaction of service concepts, service delivery systems,
customer interface and technology. This often shows the way where customers may view and
consume the service. Greenhalgh and Rogers (2010) alluded that innovation in service was
known and taken as the product innovation that is put together when a new product is introduced,
or a significant amount of change in the product the organization already has. There is also the
process innovation where new ways of producing and distributing the service or products are
introduced. Durst, Mention and Poutanen (2015) and Agarwal and Selen (2015) also agreed that
service innovation is about new service delivery system and new client interface though Agarwal
and Selen brought about the element of performance through human resources management
which brings out a dimension of including employees in service innovation.

Hertog (2010) developed the model of four dimensions in service innovation which they also
believe captures the idea of innovation in the service industry in a knowledge-based economy.
Other facets as prominent service that includes new customer interface or client encounter,
service delivery system that is new, latest organizational structure, marketing proposal and
human resources that has improved productivity and performance through proper management.
As the above authors focus on different industries, the authors Sampson and Spring (2012)
further elaborated the need for service innovation since innovation in service differs from the
production innovation due to the fact that services are not tangible whereas a product is tangible.
With a service there is an element of interaction, it is perishable. According to Kotler and Keller
(2015), the production service cannot be tied to a physical product but the role of the employees
in service organizations and the values customers place on service quality, the organization
would have to embrace a system or tactic that can yield acceptable results. Therefore the fact

15
that service is not tangible, it then makes the innovation in service difficult to copy due to the
copyright protection.

Edvardsson (2017) also had the same thoughts as the above authors, in that the service system
included all resources available in order to realize a service. Resource allocation to some extent
can be influenced by strategy, business concepts and firm goals. Although the resources are firm
specific, they can be classified as customers, organizational structure and systems, management
and staff and physical or technical resources. This is in agreement with Kotler and Keller
(2015), who believe that organizational support enables for service innovation to be a success as
correct resources will be available. The subject of service innovation attracted other authors like
Kjos (2013) who pointed to service innovation as a multi stage process whereby organizations
change their ideas into new or improved service, in the bid to advance, strive and differentiate
themselves effectively in the markets. Another author, Vos (2010), was of the opinion that
service innovation was novel service offerings or revitalizing a current facility that provided
benefit to the organization that had developed it. The benefit came from the added value that the
renewal service provided to the customers hence the service focuses on the only valid definition
of business being to create a customer. As the customer is the reason for the business to be there.
Poppelbub et al., (2011) in their research found out that service organizations faced challenges to
offer their customers new and enhanced services hence, they require service innovations so as to
sustain growth, advance quality and productivity levels of services and also be able to respond to
changing customer needs and expectations.

2.4 The extent to which service innovation has been adopted by the Bancassurance industry
In the last decades, a positive advance has been gained due to Internet access and usage which
assist firms to increase their market access, increase the customer base, open new horizons to sell
products and to achieve competitive advantage (Anmad et al., 2015; Rahayu and Day, 2015).
Due to the service innovation, a product can be promoted anywhere anytime regardless of
physical boundaries (Kuma and Verma, 2017; Shirisha, 2018). Organizations have been adopting
service innovation to attain profitability. Mazurkiewics et al. (2015) examined the internally and
externally benefits that a company receives as a result of adopting service innovation; the
findings revealed that innovation practitioners established a strong financial foundation as a

16
consequence of higher sales and profitability. A lot of studies backup Siegel's claim that there is
a substantial relationship between service innovation and financial performance (2016).

Magkopa (2021) conducted a study on the drivers of service innovation in service organizations
and discovered that the business environment in the twenty-first century is competitive, as
establishments have recognized the need to innovate frequently and offer new methods and
higher offerings to customers. Organizations can gain a competitive advantage by owning
competencies, assets, and skills that are unique, valuable, and difficult to replicate in other
organizations (Bellini, Dell'Era, Frattini, & Verganti, 2017). However, achieving an aggressive
increase is dependent on the company's contemporary talents and assets (Yanadori & Cui, 2013).
Developing and implementing innovation techniques is expected to aid in improving
establishments' overall performance by increasing market share and providing the company with
a competitive advantage (Prajogo, 2016). As a result, innovation, such as service innovation, is
critical in implementing a market-driven strategy that contributes to a competitive advantage and
enterprise growth in establishments.

According to Van Tonder, Petzer, and Van Zyl (2017), the level of competition among
organizations is increasing in South Africa and around the world, as those organizations compete
in a dynamic and aggressive enterprise environment. The critical question in service innovation
research is whether service innovation advances within companies differ from improvements
outside of organizations. In general, innovation allows businesses to create products or services
that are distinct from competitors in order to create value for customers (Clarke and Adler,
2016). In fact, service innovation has become an increasingly important concern for the
development of innovative service activities as well as the implementation of the market concept
alongside business activities. According to Chen, Wang, Huang, and Shen (2015), service
innovation is a critical factor for organizations seeking and maintaining a competitive advantage
in a growing context of service organizations. The service sector is important to global economic
activity and is recognized as the primary source of value creation that stems from innovation,
thereby improving organizational business performance (Zhang et al., 2016). According to
Zhang et al. (2016), service innovation necessitates the involvement of customers, employees,
and providers in the development of service innovations that meet customer needs and provide a

17
solution. This means that service innovation must try to provide innovative answers to consumer
demands.
Al-Ansari et al. (2013) investigated organizational innovative characteristics and the relationship
between innovations and company performance. The previous study found that managers have
different perceptions of the characteristics of innovation and that innovation has a moderate
impact on firm performance. Pantano and Viassone (2014) investigated technology-enabled
innovations in a retail setting and how they are connected to organizational internal features, and
the findings corroborated the low acceptance of new point-of-sale technologies. Retailers, on the
other hand, have expressed an interest in adopting technological improvements.

Ferreira et al. (2015) investigated the drivers of innovation management and their influence on
company performance. This study's findings highlighted major factors of innovation capabilities
such as technology, networks, learning, processes, strategy, and culture, as well as inconsistent
findings about the link between these variables and business success in different industries.
Kindstrom et al. (2013) investigated how product-oriented firms might focus on service
innovation by expanding their range of services. According to the findings, managing the critical
dynamic capacities of discovery, capture, and reconfiguration required for service innovation is a
fundamental problem connected with the change from product to service orientation.

Kindstrom et al. (2013) highlight five microfoundations that serve as the foundation for
successfully realigning an organization's dynamic capabilities to better match with service
innovation activities. Witell et al. (2015) investigated the service logic model and concluded that
under such conditions

In resource-constrained situations, a new codified service development method may be

unproductive, and a do-it-yourself attitude may better explain service advances. Furthermore,
this study found that four important bricolage abilities impact service innovation outcomes:
actively addressing resource scarcity, making do with what is available, improvising through
resource recombination, and networks with external partners.

18
Khan and Naeem (2018) investigated the links between quality practices, service innovation, and
organizational performance in another study. Quality procedures are classified as soft or hard
quality practices. The impact of soft quality practices on hard quality practices was evaluated
first, followed by the impact of each of these quality practices on service innovation and
organizational performance. The study sought to determine if hard quality practices may mitigate
the impact of soft quality practices on service innovation and organizational performance. The
role of service innovation in moderating the connection between quality practices and
organizational performance was also investigated. According to the study's findings, quality
practices increase service innovation and organizational performance, whereas service
innovation improves organizational performance.

Mennens et al. (2018) identified certain elements that allow firms to gain a competitive edge
through service innovation and increase business performance. Mennens et al. (2018) recognized
employee receptiveness and collaboration, as well as the scope of the organization's search, as
significant elements in service innovation. Employee collaboration increases realized receptivity.
Bustinza et al. (2017) investigated experimentally whether the creation and delivery of external
collaborative services, as well as the intensity of corporate R&D, can explain the complicated
link between product-service innovation, privatization, and performance. Because of the
characteristics of the business, firms in this sector are more likely to implement service delivery
than organizations in other sectors. This helps to reduce consumer uncertainty.

Kitsios and Grigoroudis (2020) investigated the link between service innovations and company
success in the tourist industry in a recent research, and the findings revealed a correlation
between the two factors.

Furthermore, these findings revealed that service innovation should be incorporated as a strategic
instrument for assessing differentiation effort in this industry (Kitsios and Grigoroudis, 2020). It
is obvious that today's business climate is characterized by fast changes, which have a direct
influence on the functioning of enterprises. As a result, organizations must constantly explore
fresh methods to differentiate their service offers (Andreassen et al., 2016). Taking these

19
previous studies into account, it is obvious that service innovation is not generally addressed or
explored in other regions of the world, particularly in developing nations such as South Africa.

2.5 Factors that influence the intention to use service innovation

2.5.1 Firm size

Firm size has been identified as one of the major factors that influence the adoption of service
innovation (Ramdani et al., 2013). It is believed that large firms have a higher chance of
adopting service innovation than small firms because they have more resources (Rahayu & Day,
2015). Bharati and Chaudhury (2006) noted that the size of an organization has a significant
weight on the kinds of technologies engaged by organizations. The size of the company was
identified as one of the main factors that influence the adoption of service innovation (Ramdani
et al., 2013). In addition, they found that simple technologies such as the Internet and accounting
software were ubiquitous in most organizations, in contrast to technologies such as customer
relationship management (CRM), which are complex to use (Karakaya and Shea, 2008).

Furthermore, AguilaObra and PadillaMelendez (2006) argue that the size of the company has a
significant impact on administrative resources, meaning that the smaller the size of the company,
the fewer opportunities the company has to seek expert advice to manage and introduce new
technologies. Research by Agwu and Murray (2015) has shown that company size negatively
affects the uptake of service innovation by Bancassurance companies in developing countries.
Similarly, Jabeur et al. (2014) also found that firm size is a factor affecting innovation adoption
among SMEs in Quebec, Canada. However, a conflicting study by Rahayu and Day (2015)
shows that firm size does not affect adoption.
2.5.2 Management support

The service innovation process is directly influenced by top management where decisions on day
to day activities to future investments are made by them. Top management support and
commitment towards service innovation is one of the key cornerstones of higher levels of
success and satisfaction with technology within firms. Support or lack of support from the top
management could influence the adoption of service innovation either negatively or positive
among organizations. The service innovation adoption process is directly influenced by top
management, where decisions about day-to-day activities for future investments are made by

20
them. Senior management support and commitment to service innovation adoption is one of the
key pillars of greater success and technology satisfaction in organizations. The support or lack of
support from senior management can negatively or positively influence the adoption of service
innovation at Bancassurance companies.

Management support refers to the degree to which management encourages and supports IT-
related initiatives within the organization (Awiagah et al., 2015). ). It is believed that companies
with high managerial support can adopt service innovation quickly compared to companies with
less support.Management with a positive attitude towards change is more willing to take on
service innovation (Ahmand et al., 2015). Research results from Awiagah et al. (2015) show that
management commitment and support influence service innovation decisions among
Bancassurance companies. The results of IBakri and Katsioloudes (2015) and Ahmad et al.
(2015) support the view that management attitudes influence the adoption of service innovation
in companies. This means that those Bancassurance companies that are positive about change are
more likely to adopt service innovation.

2.5.3 Competition

Competition among firms in the same industry could influence the decision to adopt service
innovation. It is assumed that if competitors adopt new technology their counterparts are likely to
adapt to maintain a competitive edge (A-l-Bakri & Katsioloudes, 2015). Adoption of service
innovation by competitors will allow some companies to copy in order to maintain their
competitive edge (Rahayu and Day, 2015). The drivers of technology adoption by Bancassurance
companies are the result of the company's desire to remain competitive and survive.
Competitive pressures are believed to affect technology adoption by firms if they believe these
technologies will support their competitive position. Competition between companies in the
same industry could influence service innovation decisions. It is believed that as competitors
adopt new technologies to gain a competitive advantage, their peers are likely to adapt (AlBakri
and Katsioloudes, 2015). Competitor takeover of service innovation will allow companies to
copy to maintain their competitive advantage Rahayu and Day (2015).The results of GARG and
Choeus (2015) mentioned competitive pressure as one of the factors that influence the
acceptance of service innovation between companies in South Africa.

21
2.5.4 Relative advantage

The bancassurance company's perception of the relative benefit of adopting service innovation
could influence its intent toward service innovation . Relative benefit is defined as the perceived
outcome of adopting a technology versus not adopting it (Garg and Choeu, 2015). Rahayu and
Day (2015) state that when Bancassurance companies understand the benefits of adopting service
innovation , they are more likely to channel some resources to ensure the effective
implementation of the system. Ramdani et al. mentioned relative advantage as one of the factors
influencing service innovation . (2013). A lack of knowledge about the relative advantage of
technology can hamper the uptake of service innovation by Bancassurance companies (Agwu
and Murray, 2015).The inclination to adopt service innovation increases when top management
expects more benefits from the introduced system. If the relative benefit of the system is less
than the perceived cost, management will resist adopting it.

2.5.5 External support

External support from government agencies and other service providers can negatively or
positively influence a company's intention to adopt service innovation. For example, support
from governments and IT service providers can positively influence Bancassurance companies to
adopt service innovation. A study by Garg and Choeu (2015) finds that government intervention
regulations, privacy, security and policies to lower prices for internet access can positively
influence technology adoption by many market participants. This view is supported by the
research results of Ahmand et al. (2015) show that external support has a major impact that can
hinder or encourage the adoption of technology by different firms.

2.6 The relationship between service innovation and competitive advantage

There are numerous variables that contribute to the association between perceived service
innovation and long-term competitive advantage, such as how service innovation helps to
mitigate exposure, how service innovation leads to brand awareness and customer loyalty, how
service innovation leads to long-term share of the market and sales growth, how service
innovation leads to long-term profit margins, how service innovation tends to result in the

22
safeguard of the organization's brand image in moments of crisis, and how service innovation
fosters competition.

According Azziz and Smad (2016), Porter noted that the company can achieve competitive
advantages based on cost, product differentiation guided by the Five Forces model, and
supporting an organization's value chain activities that include management activities such as
human resources, procurement, information technology development to assist marketing,
inbound and outbound logistics This competitive advantage is tied to the external environment
and correctly positions the business to attain it. In this setting, service innovation introduces new
goods and services to fulfill the continually changing demands of customers (Robert and Amit,
2018). Customer satisfaction surveys are useful for assessing the aspects of service process
innovation such as quality, delivery time, support, and after-sales service (Day, 2014).

The procedure also has an impact on operational efficiency and effectiveness. Innovation.
Improving brand image, revenue growth, and market ranking improvement are all outcomes of
the innovation process, which allows companies to bring technically improved and innovative
products to market at a lower cost and with more value to meet customer needs for reliability,
quality, and lower cost. Barney (1991) emphasized the internal component of firms, which
encompasses their resources and their significance in competitive advantage and sustainability.
According to Barney (1991), firm resources are critical actors in giving long-term competitive
advantage. According to Barney (1991), valuable uncommon, imperfectly imitable, and
imperfectly substitutable resources might provide a business with a durable competitive
advantage if there is heterogeneity and imperfect mobility of resources across rival companies.
Understanding the causes of organizations' long-term competitive advantages has emerged as a
critical field of study (Porter, 1985). These corporate resources are classified into three types:
physical capital resources, human capital resources, and organizational capital resources.

2.7 The role of service innovation in enhancing Bancassurance’ competitive advantage.

Patricio (2021) conducted research on the role of meaning in service innovation: a conceptual
exploration, noting that the purpose of the research was to present the concept of meaning as a
relevant but missing link in understanding the building blocks of service innovation informed by
service-dominant (S-D) logic. The authors propose using the conceptualization of meaning

23
within human-centered design, which has an established body of knowledge on addressing how
actors engage and interact, to investigate the role of meaning in service innovation, particularly
in relation to new value propositions, resource integration, and new value co-creation. There are
various hypotheses as to why corporations have expanded their usage of service innovation.
Drivers are external or internal factors that explain why firms engage in service innovation.
Organizations acknowledge a need to stay up with digital advancements occurring in their sector.
Changing donor habits and expectations, digital transformations in the organization's business,
and changes in the competitive environment have all been proven to be catalysts for service
innovation (Haffke et al., 2017; Schmidt, Drews, and Schirmer, 2017). (Berghaus and Back,
2017).
Jo and Na (2012) investigated whether service innovation reduces company risk. Evidence from
contentious industries. They investigated the link between service innovation and company risk
in a contentious industry area in their study. Jo and Na (2012) established and evaluated two
conflicting reduced risk and window dressing hypotheses. They used a large United States of
America sample from problematic industry businesses such as gamble, tobacco, liquor, and
others between 1991 and 2010. After adjusting for numerous company variables, they discovered
that service innovation had an inverse effect on firm risk.Fatma, Rahman and Khan (2015)
conducted research on the importance of service innovation on brand building. According to the
findings of this study, service innovation initiatives have an impact on business reputation and
brand equity.

2.8 Barriers to service innovation in Bancassurance in Zimbabwe.

Bancassurance organizations' perception of the relative advantage of adopting service innovation
could influence their intention towards service innovation. Relative advantage is defined as the
perceived outcome of adopting a technology relative to its non-adoption, (Garg and Choeu,
2015). Rahayu and Day (2015) assert that when organizations understand the advantage of
adopting service innovation, they are more likely to channel some resources. Manager’s
demographic characteristics and personality traits can also be significant determinants of service
innovation in different firms. If the manager perceives that benefits of service innovation
adoption outweigh its risks, then the business is more likely to adopt it. Managers that have prior
knowledge about service innovation are more likely to adopt it than those with less experience. A
research by Awa et al. (2015) shows that demographic composition of owners or management

24
such as age, gender and education have an impact on the adoption of service innovation. There
are some other factors besides the above mentioned that could influence the adoption of service
innovation by organizations. Firstly, there is the owner’s or manager’s innovativeness as another
factor influencing adoption of service innovation by organizations (Ghobakhloo & Hong Tang,
2013; Rahayu & Day, 2015). Company location has been found to have an effect on the adoption
of technology (Awa et al., 2015). It is assumed that those firms in city centers are more likely to
adopt service innovation than their counterparts in peripheral areas (Awa et al., 2015). The
industry in which firms operate has an impact on how firms adopt service innovation. Firms in
the manufacturing, retailing and service sector have the high chances of adopting service
innovation due to the nature of the products they offer (Ramdani et al., 2013).

Furthermore, businesses face service innovation pressure from rivals demonstrating digital
breakthroughs, new market entrants with disruptive digital business models, and technology
progress in general, which motivates enterprises to participate in organizational change (Haffke
et al., 2016). Furthermore, if the demand gets great and rapidly mounts, it may need an
organization expressing its digital objectives by establishing a role to promote service innovation
(Haffke et al., 2016). Berghaus and Back (2017) discovered that certain enterprises were
subjected to regulatory changes, which caused them to reconsider their business practices and
reform their organization. Service innovation has introduced new disruptive changes to the
economy (Yoo, 2013), and environmental circumstances are changing rapidly as a result of
digital technology and service innovation (Hartl and Hess, 2017; Porter and Heppelmann, 2014).
Digital technology, digital innovation, and service innovation are fundamentally altering
business processes, products, services, and relationships (Karimi and Walter, 2015), and
organizations must fundamentally change their business practices and employees' mindsets, as
well as restructure, in order to survive (Hartl and Hess, 2017; Porter and Heppelmann, 2014).

In other words, many firms have gone through or are presently going through service innovation.
Currently, there is no precise definition of service innovation (Haffke, Kalgovas, and Benlian,
2016). Researchers, on the other hand, typically define digital transformation as a major
organizational change driven by, built on, or enabled by service that alters how business is

25
conducted (Bilgeri, Wortmann, & Fleisch, 2017; Haffke et al., 2016, 2017; Hartl & Hess, 2017;
Heilig, Schwarze, & Voß, 2017; Mueller & Renken, 2017)

.2.9 Conceptual framework

In the following figure 2.3 the consequences of service innovation: financial and non-financial
has been presented.

Figure 2.3: Consequences of Service Innovation: Financial and Non-Financial

Source: Al-Ansari, Y., Pervan, S. & Xu, J. (2013).

2.10 Chapter summary

This study is on the analysis of service innovation on competitive advantage in the Zimbabwe
Insurance Industry: a case for Bancassurance. This chapter presents a literature review of the
study. This chapter focused on the definitions of key theories in service innovation, models, key
concepts and frameworks that underpin the two aspects. The chapter looked at the contributions
26
of other researchers on the same topic locally and from various parts of the world to build
implication to the problem identified in the introduction. The chapter also discusses empirical
literature relevant to the research topic at hand. All the factors in the conceptual framework are
connected to the research question and hypothesis were laid out in the study introduction. The
next chapter shall look at the methodology of the study.

27
 CHAPTER THREE
RESEARCH METHODOLOGY

3.0 Introduction
Research methodology refers to collecting and analyzing existing data to come up with
conclusions. Chapter 2 concentrated on reviewing the literature related to the study in which the
theories governing the conduct of the study. This chapter focused on the presentation of research
tools as well as the methods and approaches used to gather and evaluate the data required to
satisfy the research questions. The methodology presented the research philosophy, research
design, research approach, targeted population, sample, sampling procedures, data analysis
methods, and chapter summary.

3.1 Research philosophy

Saunders et al. (2016) view research philosophy as a set of opinions that helps to improve
knowledge. The researcher opted for the mixed approach known as pragmatism, which is a
combination of two philosophies positivism and interpretivism. The use of the two methods
helped the researcher to capitalize on the benefits and strength of both philosophies. Collins et al.
(2014) highlighted that the mixed approach enables researchers to use both quantitative and
qualitative research methods when analyzing data.

3.1.1 Positivism

Positivism is usually associated with ordinary science and involves realistic assessment whilst
interpretivism is associated with independent philosophies (Searl, 2015). More so, Searl (2015)
added that interpretivists view the world through people under study by allowing them to have
various viewpoints as compared to individual reality of positivists. Saunders et al. (2016) added
that there is no philosophy which is said to be better than the other but the choice of the method
to use is based on the way the researcher sees the world and the nature of the area understudy.
The researcher used a mixed approach for the study on the analysis of service innovation on
competitive advantage in the Zimbabwe Insurance Industry: a case for Bancassurance since it
was the one that worked best for the particular research problem being investigated.

28
3.1.1.1 Justification of positivism

Researchers adopted an interpretive research philosophy when trying to determine the extent to
which service innovation has been adopted by the Bancassurance industry. Interpretivist
worldviews recognize subjective values, and it is understood that individuals form their own
reality of the world in different contexts through interaction with others (Chetty, 2016). The
interpretation paradigm involves understanding the world as it is from an individual's subjective
experience (Chetty, 2016). They use meaning-oriented rather than measurement methods such as
interviews and participant observation. This depends on the subjective relationship between the
researcher and the subject (Biradar, 2019). Interpretivist philosophy focuses on the subjective
meaning and interpretation of meaning behind social phenomena (Chetty, 2016). By applying
the philosophy of interpretivism to research, qualitative research methodologies are better
suited to help researchers conduct small samples in detailed interviews and focus group
interviews.

3.2 Research design

When conducting a study, the value of a research design cannot be overstated. Bhattacherjee
(2012) defines research design as a blueprint for a practical inquiry that is meant to answer
research questions or test specific study hypotheses. A research design is therefore an organized
collection that is organized in a certain way to help in the collecting of data targeted at answering
research questions. As a result, a research design is a strategy that describes the criteria that will
be used by the researcher. A case study, according to Yin (1994), is an empirical investigation
that explores a current phenomena inside its real-life environment, particularly when the borders
between phenomenon and context are unclear.

3.2.1 Explaratory research design

Explaratory research design is defined as a research used to investigate a problem which is not
clearly defined (Kothari, 2020).
3.2.1 Justification of explaratory research design

Exploratory research design was considered necessary because it helps researchers better
understand the concept. Researchers also chose this study design because it helped determine
how to study and collect data. For example, the use of interviews and questionnaires was

29
determined by this study design. During that time, researchers faced many challenges in this
study design. This includes, for example, the fact that too much information was collected
through interviews, making it difficult for researchers to summarize it in order to obtain
meaningful and useful information. When the researcher gathered information, he also spent
much of the researcher's time doing further research, as exploratory research was only
investigating the research is needed room for further research.

3.3 Population
Population is the aggregation of elements from which the sample is actually selected (Saunders,
et al., 2017). Bryman (2015) defines population as any group of individuals or objects that share
common characteristics and represents the whole or sum total of cases involved in a study.
Cooper and Schindler (2016) defines target population as people or items with the relevant
information needed for the study. When conducting a research, it is important to specify the
target population. The target population included the expected respondents, in the case of this
study, this comprised of the staff from Stanbic bank, Old Mutual, CBZ and FBC bank. There are
however constrains that makes it impossible to collect data from the whole population, these
include budget and time constraints. The target population was 510 comprising applicants, ICT
staff and managers. Table 3.1 below shows the class of population. The staff members and
managers were chosen because they know the key information in the departments and their
effectiveness as well as performance of their respective departments.

Table 3.1 Population class

Population class Stanbic bank Old Mutual CBZ FBC bank

Employees from 88 87 87 87
operations

Employees from 11 12 12 13
marketing department

Employees from IT 11 12 12 13
department

Managers (IT, Marketing, 12 11 12 13

30
 Finance, HR, Operations)

3.4 Sample size

According to Saunders (2013), a sample is a subset of a population chosen by a researcher in
order to draw conclusions about the population. The sample size was determined using the
Krejcie and Morgan (1970) method. The researcher calculated the absolute sample size for the
total population using the Krejcie and Morgan (1970) formula.. Specific respondents in each
category was selected through a proportional representation as reflected in the population. The
researcher used a table shown in table 3.2 below to determine a sample size. The sample size of
the study was 217 people.

The formula used to determine the sample size is illustrated below.

S=(X^2 NP (1-P)) / (d^2 (N-1) + X^2 P(1-P))
Where:S = required sample size
N = Population size

31
 P = Population proportion
d = degree of accuracy (0.05)
X2 = degree of freedom (3.841)
Table 3.3 Sample size determination
Class Number Sample size

Employees from operations 350 85

Employees from marketing department 50 44

Employees from IT department 50 44

Managers (IT, Marketing, Finance, HR, Operations) 50 44

Total 500 217

3.5 Sampling procedures

Ball and Gorg (2015) defines sampling as selection of a specific group of people from a selected
population and acts as representatives of that population. According to Saunders et al. (2016) the
two major sampling techniques in research are probability and non-probability sampling.
Probability sampling methods are normally associated with studies, which involve hypothesis
testing, whereas non-probability methods are used when the research is mainly focused on the
study and has not to be inferred to the population. The sampling method used was stratified
random sampling. The researcher chose the probability sampling and opted for stratified simple
random sampling because the total population is known and every member has same chance of
being selected. Stratified random sampling involves the identification of strata or sub-groups and
then randomly sampling the sub-group with each member having an equal chance of being
selected. Stratified random sampling ensures that each subgroup has a proper representation
hence providing for a better coverage of the population. The sampling method allowed the
researcher to gather data from employees and managers who could provide useful data about the
analysis of service innovation on competitive advantage in the Insurance Industry: a case for
Bancassurance.

32
3.5.1 Justification of stratified sampling

In this study, we used the stratified random sampling method because it can represent all
subgroups of the population. Stratified random sampling ensures that all subgroups are
represented and allows one layer to be compared to another. Alvi (2016) argued that a
heterogeneous population provides a representative sample of diversity. This is often
compromised by simple random sampling or systematic random sampling techniques. In
addition, stratified random sampling allows researchers to draw statistical conclusions from the
data collected.

3.6 Sources of data

The researcher employed both primary and secondary data in this investigation. Primary data is
information gathered by the researcher in the field expressly for the study. using questionnaire.
Meanwhile secondary data as defined by Cooper and Schindler (2017) as the data gathered and
recorded by someone else prior to the current study. Secondary data for this research was
collected text books, documents, biographies, articles, company websites and other historical and
documentary records which are important to the research study.

3.7 Research Instruments/ Data collection methods

3.7.1 Structured questionnaire

This is a methodically produced form or document that contains a series of questions aimed to
elicit replies from respondents or research informants in order to collect data or information
(Cooper and Schindler, 2017). A questionnaire is a research instrument in which a series of
questions are typed or printed together with the option of responses, which are anticipated to be
marked by the respondents, and is used for a survey or statistical study. It comprises of a
structured series of questions, in a certain order on a form, which are mailed or hand delivered to
respondents for replies. Respondents are expected to read, comprehend, and answer in the area
provided.
3.7.1.1 Justification of structured questionnaire

A structured questionnaire was employed with closed and open ended questions, in such a way
that it was self-administered to gather qualitative data. Self-completion questionnaires have the

33
benefit of being inexpensive, but they are better suited to difficulties when there are just a few
questions with generally obvious and straightforward meanings, and the option of responses may
be confined to preset categories.
3.7.2 Interview guide

The interview is a data gathering approach that involves a direct, in-depth dialogue between the
interviewer and the responder (Borg, 2017). It is done for a specific reason, such as a survey or
study, and both sides participate in the one-on-one conversation. Oral-verbal stimuli are
delivered and responded to with oral-verbal responses in this manner.

3.7.2 Justification of interview guide

Interviews were utilized in this study because they offer several benefits than self-completion
questionnaires. The interviewer in this study discussed different parts that the respondent did not
understand and requested for more elaborations and explanations. In general, respondents
perceive being asked questions by a sympathetic listener to be more satisfying than filling out a
form for an anonymous researcher, thus fewer individuals refuse to participate and more
questions may be asked of each person.

3.8 Data collection

Data collection is the systematic gathering and measurement of information that allows
researchers to answer research questions, test hypotheses, and assess outcomes (Kabir, 2016).
These are the steps performed by the researcher to administer research tools in order to collect
data. The researcher collected data using both primary and secondary sources. Field surveys and
interviews were used to acquire primary data.. Secondary data was used by the researcher to
compare and ensure validity and accuracy of data collected through primary approach. The
questionnaires had some space for the respondent to fill but with little space so that he or she
does not deviate from the topic being researched. The researcher chose a questionnaire model
with structured questions. Questionnaires were sent via emails and WhatsApp to the targeted
respondents (employees from various departments, ICT staff and managers.

3.9 Methods of data analysis

The information which was provided by the questionnaire from the participants was paired and
tabulated into the Statistical Package for Social Science (SPSS). Data analysis is a process that

34
researcher go through form a mass collection of data to meaningful insight in the research. The
researcher followed three steps during data analysis which are data validation, data editing and
data coding. The researcher cleaned data for errors such as missing values and as well as an
invalid entry. The researcher analysed data using methods such as descriptive statistics and
inferential statistics like multiple regression, analysis of variance and hypothesis testing.
Descriptive statistics assisted the researcher to summarize the data and find its pattern and it is
the first level of analysis. Correlation analysis was employed in testing the relationship between
variables.

3.10 Reliability test

Reliability test is the overall consistency of research study measures. Reability is the extent to
which a measure is accurate. Reability can be measured in terms of its internal consistency,
stability and equivalence. Reability can be assessed through checking the consistency of the
results across time and across parts of the test. The benefits of using reliability is that even if the
measurement is not always valid, result can be reproducible. Researcher used Cronbach`s alpha
for reliability test. Therefore, to evaluate the reliability of instruments used, similar questions
were included on the questionnaires so as to determine truthfulness of their responses whether
their responses produced the same results. A pilot study was conducted to test the performance of
the research instrument and afforded the researcher the opportunity to anticipate the problems
that could be encountered in the main study. The findings and experiences from the pilot study
were used to effect improvements on the questionnaire. Comments were obtained and sections
that were unclear were restructured. To reduce participant, bias the research questions were
designed in a manner that maintained the anonymity of the respondent by leaving out the name
of the interviewee.

3.11 Validity
Validity refers to how accurately a method measures what is it intend to measure. Validity has
three types that have content validity, face validity and construct validity. Content validity is a
subset of content validity and it is where experts of their opinion about if an instrument measures
the intent concept. Construct validity refers to whether a researcher can draw inference about the
test scores related to the concept of the study.

35
3.12 Ethical considerations
Ethical consideration is a set of rules characterized by acceptable rules of conduct that are
intended to control the research process. There are three research ethics which are anonymity,
confidentiality and informed consent.
Informed consent
Informed consent means that all the participants are informed that they are taking part in a
research process. Informed consent is a legal procedure that allow the participants to know all the
risk and costs involved in taking part in a research. The researcher provided his personal details
for referencing.
Anonymity
Anonymity is the collecting of information from the participants without knowing their personal
details, thus the researcher kept participants’ identities secret safe. The researcher protected both
the participants and the message. The researcher made sure that participants are fully informed in
order to insure that the respondents participate willingly. The researcher gave participants ample
time to ask questions concerning the process and clear answers were provided by the researcher.
The researcher achieved anonymity by covering legal name, location, pseudonyms lined name or
location, appearance and behaviour pattern. The researcher covered all the information and only
disclose the information, which was useful for the thesis.
Confidentiality
Confidentiality refers to the condition in which the researcher knows the identity of the
participants, but keep steps to protect the identities from being discovered by intruders. The
researcher employed passwords to protect files in order to secure respondents identities. The
researcher was responsible for the protecting of respondents’ information.

3.13 Chapter summary

Third chapter presented the methodology of the study and the way in which data is going to be
collected, analyses and presented. The next chapter will present and discuss the results on the
examination of the emergence of information technology and impact on the competitiveness in
the commuter transport industry.

36
 CHAPTER 4
DATA PRESENTATION AND ANALYSIS

4.0 Introduction
This chapter discusses findings emanating from the data collection procedures. Findings will be
presented according to the study objectives which in this study are to determine the extent to
which service innovation has been adopted by the Bancassurance industry in Zimbabwe, to
identify factors that influence the use of service innovation by the Bancassurance industry in
Zimbabwe, in opder to find out the relationship between service innovation and competitive
advantage in the Bancassurance industry in Zimbabwe, to identify the role of Bancassurance’ in
developing a competitive advantage and to identify the barriers to service innovation in
Bancassurance in Zimbabwe.

4.1 Response Rate

Leedy (2015) defined response rate as the proportion of subjects in a statistical study who
responded to the research questions. Initially the researcher intended to administer and receive
197 filled in questionnaires and conduct 20 interviews from the 217 respondents. Nonetheless,
176 questionnaires were filled in and returned making a non-response of 25. All intended
interviews were successfully conducted. Thus the combined response rate was 192 which
according to Mugenda (2003) is ideal in any research in order to generalize findings. The
response rate is therefore seen in Table 4.1.
Table 4.1 Response Rate

Expected response Actual Non- Response rate (%)

Response response

217 192 25 88.4%

4.2 Reliability
Reliability tests for internal consistency were tested using version 16 of SPSS and the cronbach’s
alpha was used as a measure as presented in the table 4.2 below

Table 4.2 Reliability Statistics-Cronbach’s Alpha

37
As presented on the table above, the Cronbach’s Alpha was 0.848. Saunders (2007) postulated
that a Cronbach’s alpha above 0.7 is acceptable as it shows greater instrument consistency,
therefore this study’s Cronbach’s alpha is acceptable and reliable to show greater consistency of
the instrument.

4.3 Demographic Variables

The demographic features of the respondents will be presented in accordance with their gender,
age, and educational background.
4.3.1 Gender

It was discovered that 52.5 percent of the respondents recruited for the study were male, while
47.5 percent were female. This demonstrates that the insurance sector is dominated by more men
than women, yet this had no effect on the data obtained.
Figure 4.3 Gender Distribution

38
4.3.2 Age

From the respondents it emerged that (31%) of respondents where in the 25-30 years age group.
Majority (43.1%) indicated that they were between 31-40 ages cohorts. The minority occupying
age group was the 41-50 cohort which constituted (25.8%) looking at the age ranges in
Zimbabwean Bancassurance it can be argued that the majority of the employees are rather a bit
older which infers that innovative thinking and agility is rather low hence local Bancassurance
have struggled to bring in innovative strategies towards baking like other countries have done. In
this regards the researcher believes it is wise to recruit younger employees who are more
innovative and agile. Table 4.2 illustrate the age distribution.
Table 4.3 Age Distribution

39
 Percent Valid Percent Cumulative Percent

Valid "25-30
31.0 31.0 31.0
years"

31-40 years 43.1 43.1 43.1

41-50 years 25.8 25.8 25.8

Total 100.0 100.0

4.3.3 Education Level

Of the respondents, 46.5% were degree holders in various specialties, again 32.7% were Masters
holders. 17.2% were PhD holders whilst only 3.4% had qualification in other professional
courses. The level of education among bancassurance employees in this regards was high which
determined quality responses were obtained.

Table 4.4 Education Level

Cumulative
Percent Valid Percent Percent

Valid Degree 46.5 46.5 46.5

Masters 32.7 32.7 32.7

PhD 17.2 17.2 17.2

Other 3.4 3.4 3.4

Total 100.0 100.0

40
4.3.4 Work Experience

When asked on the number of years they had spent in their respective organizations, 44.8% of
the respondents had spent between 1-5 years, 31% had been in their organizations between 6-10
years and the minority (24.1%) had 11-15ears of working experience.

Table 4.5 Work Experience

Cumulative
Percent Valid Percent Percent

Valid 1-5 44.8 44.8 44.8

6-10 31.0 31.0 31.0

11-15 24.1 24.1 24.1

Total 100.0 100.0

4.4 Main Findings

The actual findings will be presented according to questions in Appendix A and data analysis
using both descriptive and thematic content analysis.

Question 6: Do you understand the concept of service innovation?

Table 4.6 Concept of service innovation

Frequency Percentage Cumulative percent

Yes 192 100 100
Respondent were asked if they understand the concept of service innovations majority (100%)
pointed that they are much aware of the concept. Thus this entails that respondents have an
understanding of the concept of service innovation.

41
Question 9: To what extent have Bancassurance firms adopted service innovation in
Zimbabwe?
Table 4.7 Adoption of service innovation
Statement Strongly Disagree Neutral Agree Strongly
disagree Agree
To a greater extent - - 0% 27% 35%
Bancassurance
firms adopted
service innovations
in Zimbabwe.
To a lesser extent - - - 20% 15%
Bancassurance
firms adopted
service innovations
in Zimbabwe

With regards to the extent to which Bancassurance firms adopted service innovation, majority of
respondents (65%) alluded that to a greater extent Bancassurance firms adopted service
innovations in Zimbabwe. However, minority (35%) of respondents dismissed the claim and
pointed that to a lesser extent Bancassurance firms adopted service innovations in Zimbabwe

Question 10: What are the factors influencing the use of service innovation by the
Bancassurance industry in Zimbabwe? Rate your opinions on a scale of 1-5 where; 1=
Strongly Disagree; 2 Disagree; 3= Neutral; 4= Agree; 5= Strongly Agree
Table 4.8 factors influencing the use of service innovation
Statement Strongly Disagree Neutral Agree Strongly
Disagree Agree
Firm Size 12.5% 50% 37.5%

Management support 10% 20% - 40% 30%

Competition 25% - 5% 30% 40%

42
 Relative advantage - - 27.5% 52.5% 20%

External support 40% - 30% 30% -

Respondents were asked about the factors that affect the use of service innovation by
Bancassurance industry in Zimbabwe. Majority (87.5%) of respondents agreed that firm size
influence the use of service innovations. Nonetheless, minority (12.5%) of respondents were
indifferent. As such this result is in consensus with a study by Bharati and Chaudhury (2006).
They postulated that the size of an organization has a significant weight on the kinds of
technologies engaged by organizations.

In regards to management support, majority (70%) agreed that it is one of the key aspect which
leads to utilisation of service innovation by bancassurance industry. However, (30%) that is
minority of respondents disagreed with statement. Similarly, research results from Awiagah et al.
(2015) show that management commitment and support influence service innovation decisions
among Bancassurance companies.

In addition, asked if competition influence the use of service innovation, majority (70%) of
respondents agreed to the statement. (25%) of respondents rebuke the claim, whereas a minority
(5%) where undecided. In an interview on of the respondents had the following to say;
“Due to competition in this industry firms are supposed to come up with innovative ideas so as
to out compete competitors thereby leading to competitive advantage. Therefore, competition
enhances service innovation to every bancassurance firm”

Furthermore, majority (72.5%) of respondents agreed that relative advantage also enhances the
use of service innovation by the bancassurance industry. However, minority (27.5%) of
respondents chose to be neutral.
Lastly, with regards to external support as a factor influencing the use of service insurance,
majority of respondents (40%) dismissed the statement. This was followed by (30%) of
respondents who agreed with the statement. Some respondents (30%) were neutral.

43
Question 11: Is there a relationship between service innovation and competitive advantage
in the Bancassurance industry in Zimbabwe? Rate your opinions on a scale of 1-5 where; 1=
Strongly Disagree; 2 Disagree; 3= Neutral; 4= Agree; 5= Strongly Agree
Table 4.9 Relationship between service innovation and competitive advantage
Statement Strongly Disagree Neutral Agree Strongly
Disagree Agree
Yes, service 2.2% 8.9% 6.7% 44.4% 37.8%
innovation
leads to
brand
awareness
and customer
loyalty
service 40% 60%
innovation
fosters
competition
service 30% 30% 40%
innovation
leads to long-
term profit
margins
service 70% 25% 5%
innovation
leads to long-
term share of
the market
and sales
growth

44
The research sought to find out if there is a relationship between service innovation and
competitive advantage. Respondent (82.2%) agreed that a relationship exist between the
aforementioned variables since service innovation leads to brand awareness and customer loyalty
thus translating competitive advantage. However, (11.1%) of respondents dismissed the notion
whereas minority (6.7%) were undecided.

In addition, majority (100%) of respondents agreed that there is a relationship between the two
since service innovation fosters competition. Majority (70%) of respondents agreed that service
innovation leads to long-term profit margins which later translate into a competitive advantage.
However, minority of respondents (30%) were indifferent.

Service innovation leads to long-term share of the market and sales growth, majority (90%) of
respondents dismissed the statement. On the other hand, minority (5%) of respondents were
neutral.
Question 12: What is the role of service innovation in enhancing Bancassurance’
competitive advantage? Rate your opinions on a scale of 1-5 where; 1= Strongly Disagree; 2
Disagree; 3= Neutral; 4= Agree; 5= Strongly Agree
Table 10: Role of service innnovation
Statement Strongly Disagree Neutral Agree Strongly
Disagree Agree
service 10% 50% 0% 25% 15%
innovation
initiatives
have an
impact on
business
reputation
and brand
equity
service 16.7% 25% 16.7% 16.7% 25%
innovation

45
 reduces
company risk
development 0% 0% 0% 51.7% 48.3%
of new
products
resource 0% 25% 13.3% 30% 31.7%
integration
and new
value co-
creation

Respondents were asked about the role of service innovation in enhancing bancassurance’s
competitive advantage. Majority (60%) of respondents dismissed the fact that service innovation
initiatives have an impact on business reputation and brand equity. Nevertheless, (40%) of
respondents agreed that service innovation has a role to play through impacting business
reputation and brand equity.
Respondents have identified service innovation’s role as to reduce company risks, this was
supported by (41.7%). However, other respondents dismissed the study. Minority (16.7%) of
respondents were undecided. Another one that respondents obtained to be the role of service
innovation is development of new products this was supported by (100%) of respondent.

Question 13: What are the barriers to service innovation in Bancassurance in Zimbabwe?
Rate your opinions on a scale of 1-5 where; 1= Strongly Disagree; 2 Disagree; 3= Neutral; 4=
Agree; 5= Strongly Agree
Table 11: Barriers to service innovation adoption
Statement Strongly Disagree Neutral Agree Strongly
Disagree Agree
demographic - 10% - 60% 30%
composition
of owners or
management

46
 such as age,
gender and
education
the owner’s or 25% - 5% 70%
manager’s
innovativenes
s
Company - 10% 18.6% 40% 31.4%
location
The industry 20% - - 50% 30%
in which firms
operate
Respondents were asked to highlight on the barriers to service innovation in Bancassurance in
Zimbabwe. Majority (90%) of respondents alluded that demographic composition of owners or
management such as age, gender and education. However, (10%) of respondents dismissed the
statement.

In addition, with regards to the owner’s or manager’s innovativeness, majority of respondents

(75%) agreed to the statement. Nevertheless, (25%) of respondents rejected the claim.

The company location was found to be among the barriers to service innovation. When
respondents were asked about their personal view (71.4%) of respondents agreed to the
statement. However, (18.6%) were undecided. Lastly, (10%) of respondents rejected the
statement.

Respondents indicated that the industry in which firms operate also impede services innovation.
Majority of respondents (80%) agreed to the statement. Contrary, (20%) of respondents
disagreed

Correlation

Nexus between service innovation and competitive advantage

47
Table 4.12 Correlations
Service Competitive
innovation advantage
Competitive Pearson
1 .642*
advantage Correlation
Sig. (2-tailed) .033
N 11 11
Service innovation Pearson
.642* 1
Correlation
Sig. (2-tailed) .033
N 11 11
*. Correlation is significant at the 0.05 level (2-tailed).
Table 4.4.0 presents correlation results obtained after employing the Pearson correlation. Results
indicate that there is a strong positive correlation between competitive advantage and services
innovation. This can be justified by a Pearson correlation coefficient of 0.642%. This entails an
improvement in service innovations will lead to improved competitive advantage

4.5 Chapter Summary

The chapter presented and discussed the research findings in the context of research objectives
and in relation to the work done in previous studies as cited in the literature review. The next
chapter will provide a summary of findings.

48
 CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Introduction
This Chapter presents the research's major results in connection to the study's objectives, as well
as conclusions based on the research findings and an outline of suggestions. The Chapter
concludes by discussing the study's ramifications and topics for future investigation

5.2 Summary of the study

The research sought to give an introspective examination of service innovation's impact on
competitive advantage in the Zimbabwe Insurance Industry. The study's major goal in this
respect was to assess the relationship between service innovation and competitive advantage in
the Zimbabwe Insurance Industry. The research sought to answer the question, "To what degree
can service innovation improve competitive advantage in the insurance industry?" This study
used SPSS to attain the objectives and offer answers to the research questions.

The study also employed a mixed-method approach, including both primary and secondary
data.The study utilised exploratory research design. Exploratory research design was considered
necessary because it helps researchers better understand the concept. Researchers also chose this
study design because it helped determine how to study and collect data. Probability sampling

49
technique was used. The sampling method used was stratified random sampling. The researcher
chose the probability sampling and opted for stratified simple random sampling because the total
population is known and every member has an equal chance of being selected. Structured
questionnaire and interviews were used in this study. A total number of 217 respondents were
recorded used for sample. The collected data was evaluated and interpreted in conjunction with
secondary data gathered from a literature review. The literature study, data analysis, and
presentation will yield the following results.

5.3 Summary of main findings

5.3.0 The extent to which service innovation has been adopted by the Bancassurance
industry

With regards to adoption of service innovation by bancassurance industry, results obtained

indicated majority of respondents agreed to a greater extent that bancassurance industry in
Zimbabwe have adopted service innovation.

5.3.1 Factors that influence the intention to use service innovation

Results indicated that there are a number influencing the intention to use service innovation.
According data analysis in the previous chapter, respondents agreed that firm size influence the
use of service innovations. In regards to management support, majority (70%) agreed that it is
one of the key aspect which leads to utilisation of service innovation by bancassurance industry.
Competition was also found to be among major factor that drives the use of service innovation.

5.3.2 The relationship between service innovation and competitive advantage

The research ought to find out if there is a relationship between service innovation and
competitive advantage. (82.2%) of respondents agreed that a relationship exist between the
aforementioned variables since service innovation leads to brand awareness and customer loyalty
thus translating competitive advantage. More importantly, results indicated that respondents
agreed that there is a relationship between the two since service innovation fosters competition.

50
5.3.4 The role of service innovation in enhancing Bancassurance’ competitive advantage.

The study found out that respondents (60%) dismissed the fact that service innovation initiatives
have an impact on business reputation and brand equity. Respondents have identified service
innovation’s role as to reduce company risks. Another one that respondents identified to be the
role of service innovation is development of new products

5.3.5 Barriers to service innovation in Bancassurance in Zimbabwe.

Respondents were asked to highlight on the barriers to service innovation in Bancassurance in

Zimbabwe. Results indicate that, respondents alluded that demographic composition of owners
or management such as age, gender and education. With regards to the owner’s or manager’s
innovativeness, majority of respondents (75%) agreed to the statement. The company location
was found to be among the barriers to service innovation.

5.4 Conclusion

In light of the major findings, the study arrived at the following conclusions

The study results revealed that majority of Bancassurance in Zimbabwe have adopted to service
innovation so as to enhance competitive advantage. However, this is not reflective of the reality
on the ground. Bancassurance industry in Zimbabwe is still lagging behind in terms of
incorporating service innovation.

The study has identified a number of factors that influence use of service innovation in
bancassurance. Firm size has been identified as the major factors that influence the adoption of
service innovation. It is believed, large firms have a higher chance of adopting service innovation
than small firms because they have more resources. The size of the company has a significant
impact on administrative resources, meaning that the smaller the size of the company, the fewer
opportunities the company has to seek expert advice to manage and introduce new technologies.

The service innovation process is directly influenced by top management where decisions on day
to day activities to future investments are made by them. Top management support and
commitment towards service innovation is one of the key cornerstones of higher levels of

51
success and satisfaction with technology within firms. The service innovation adoption process is
directly influenced by top management, where decisions about day-to-day activities for future
investments are made by them. Competition among firms in the same industry could influence
the decision to adopt service innovation. It is assumed that if competitors adopt new technology
their counterparts are likely to adapt to maintain a competitive edge.

Study results note that there is a relationship between service innovation and competitive
advantage. Correlation results obtained indicated that there is a positive correlation between the
aforementioned variables.

Several barriers that impede adoption of service innovation were noted. Manager’s demographic
characteristics and personality traits are significant determinants of service innovation in
different firms. If the manager perceives that benefits of service innovation adoption outweigh its
risks, then the business is more likely to adopt it. The owner’s or manager’s innovativeness was
another factor influencing adoption of service innovation by organizations. Demographic
composition of owners or management such as age, gender and education were also included as
barriers to adoption of service innovation.

5.5 Policy recommendations

Policy recommendations in this study were motivated by conclusions made above by the
researcher.

Since bancassurance industry in Zimbabwe is falling behind in terms of service innovation the
study recommends that there is a need for the bancassurance industry to incorporate policies that
promote service innovation within the industry thereby enhancing competitive advantage.

The study noted that there are barriers that impede successful adoption of service innovation as
such the study recommends mitigating strategies that can be employed to help curb the
challenges faced in adopting and executing service innovation such as increase use of advanced
technology by the firms; engaging in corporate responsibility The study also recommend for
government support through financial aid to support innovative strategies employed by the
industry to enhance competitive advantage.

52
5.6 Study Limitations

The study had its own shortfalls, the study was limited to only four bancassurance firms in
Zimbabwe. Results that’s were obtained are only limited to Zimbabwe therefore, we cannot
make inferences to other countries.

5.7 Areas of further studies

The study focused on the analysis of service innovation on competitive advantage in the
Zimbabwe Insurance Industry using bancassurance firms. Thus future researcher can expand the
scope of the study and focus on non-Bancassurance firms.

References
Aziz N.N.A and Smad S. (2016). Innovation and Competitive Advantage. Moderating effects of
firm age in food manufacturing SMEs in Malaysia. Procedia Economics and Finance. 35 (2016),
256-266.

Babbie, E. (2017). The practice of social research. Eleventh edition, Belmont, California:
Wadsworth Publishing Company

Babbie, E and Mouton, J. (2011). The practice of social research, Cape Town, Oxford University
Press.

Baer, M., and Frese, M. (2013). Innovation is not enough: Climates for initiative and
psychological safety, process innovations, and firm performance. Journal of Organisational
Behaviour, 24(2013), 45–68.

Baker, W. E., and Sinkula, J. M. (2018). Learning orientation, market orientation, and
innovation: Integrating and extending models of organisational performance.
Journal of Market Focused Management, 4(4), 295-308

Bayarcelik E.B, Tassel F and Apak S (2014). A research on determining innovation factors for
SMEs. Procedia-Social and Behavioural Sciences. Vol 150, 15 September 2014, P 202-211.

Bougrain, F. and Haudeville, B. (2012). “Innovation, collaboration and SMEs internal research
capabilities' ', Research Policy, Vol. 31 No. 5, pp. 735-47.
53
Bryman Alan (2018). Social Research Methods, 3rd edition, Oxford: Oxford University Press
New York

Bruderl, J., Preisendorfer, P. and Ziegler, R. (2012). “Survival chances of newly founded
business organisations”, American Sociological Review, Vol. 57, pp. 227-42.

Camison, C (2017). The Competitiveness of the Spanish Industrial SME: Strategy and
Distinctive Competencies, Editorial Civitas, Madrid.

Cresswell, John, W (2013). Research Design: Qualitative, Quantitative and Mixed Methods
approaches. 2nd Edition, Sage Publications, USA.

Coheni, L and Manion L. (2015). Research Methods in Education, London: Groom Helm

Cohen, W. M., and Levinthal, D. A. (2010). Absorptive Capacity: A New Perspective on

Learning And Innovation. Administrative Science Quarterly, 35(1), 128-152.

Jain, R. (2014). Impact of social media marketing on SME business. Prentice hall

Keller, K.L. (2013). Strategic brand management: Building, measuring and managing brand
equity (4th ed). Pearson Education Limited.

Kiriinya, S.N and Kirimi, D.G. (2015). Marketing challenges by Bancassurance organizations in
Kenya. International Journal in Finance and Marketing, 5(10), 55-63.

Makanyeza, C., Kwandayi, H and Ikobe, B.N. (2013). Strategies to improve service shipping in
local authorities. Two International Journal of Information Technology and Business
Management, Vol.15 No.1

Onyango, K. (2016). Influence of virtual tourism and destination marketing strategies on

performance of cut flowers exporting firms in Kenya. MBA Thesis, University of Nairobi.

54
 Questionnaire
Dear respondent,
This research intends to study the analysis of service innovation on competitive advantage in
the Zimbabwe Insurance Industry. The research is conducted under the auspices of the
Department of Insurance and Actuarial Science, as a partial fulfillment of the BSc Degree in
______________at National University of Science and Technology. Your assistance as the
manager/staff will be appreciated to ensure that accurate and relevant information is obtained to
assist me to make the correct conclusions and recommendations.

Yours sincerely

Magayo Blessing

Instructions

Dear Sir/Madam,

You are kindly requested to answer all questions in this research study questionnaire. The
information that you will provide shall be treated with a high level of confidentiality and strictly
used for the purpose of this research study. This study aims to give an analysis of service
innovation on competitive advantage in the Zimbabwe Insurance Industry. Kindly do not write
your name anywhere on this questionnaire.
Part A: General Information

55
Please respond to the following questions below by ticking [√] on the appropriate option.
1. Please indicate your Gender.

Male [ ] Female [ ]

2. Department:

ICT [ ] Marketing [ ]
Finance [ ] Others (Specify)

3. Indicate your age bracket as shown below:

25-30 [ ]

31-40 [ ]

41-50 [ ]

4. Your academic qualification:

Degree [ ]
Masters [ ]
Doctorate [ ]
Others
5. Your experience at the organisation
1-5 years [ ]
6-10 years [ ]
11-15 years [ ]

Part B: Main Issues

6. Do you understand by the term service innovation?
Yes [ ] No [ ]
56
7. Does service innovation impact the performance of the organisation?
Yes {} no {}

8. If yes in (7) briefly explain?

9. To what extent have Bancassurance firms adopted service innovation in Zimbabwe?

Statement Strongly Disagree Neutral Agree Strongly
disagree Agree
To a greater extent
Bancassurance
firms adopted
service innovations
in Zimbabwe.
To a lesser extent
Bancassurance
firms adopted
service innovations
in Zimbabwe

10. What are the factors influencing the use of service innovation by the Bancassurance
industry in Zimbabwe? Rate your opinions on a scale of 1-5 where; 1= Strongly Disagree; 2
Disagree; 3= Neutral; 4= Agree; 5= Strongly Agree
Statement Strongly Disagree Neutral Agree Strongly
Disagree Agree
asymmetry
of
information
between a
client and
an insurer is
the driving

57
 force behind
innovation
Firm size
asymmetry
of
information
between a
client and
an insurer is
the driving
force behind
innovation
Management
support
Competition
Relative
advantage
External
support

11. Is there a relationship between service innovation and competitive advantage in the
Bancassurance industry in Zimbabwe? Rate your opinions on a scale of 1-5 where; 1=
Strongly Disagree; 2 Disagree; 3= Neutral; 4= Agree; 5= Strongly Agree
Statement Strongly Disagree Neutral Agree Strongly
Disagree Agree
Yes, service
innovation
leads to
brand
awareness
and customer

58
 loyalty
service
innovation
fosters
competition
service
innovation
leads to long-
term profit
margins
service
innovation
leads to long-
term share of
the market
and sales
growth

12. What is the role of service innovation in enhancing Bancassurance’ competitive

advantage? Rate your opinions on a scale of 1-5 where; 1= Strongly Disagree; 2 Disagree; 3=
Neutral; 4= Agree; 5= Strongly Agree

Statement Strongly Disagree Neutral Agree Strongly

Disagree Agree
service
innovation
initiatives
have an
impact on
business
reputation

59
 and brand
equity
service
innovation
reduces
company risk
development
of new
products
resource
integration
and new
value co-
creation

13. What are the barriers to service innovation in Bancassurance in Zimbabwe? Rate your
opinions on a scale of 1-5 where; 1= Strongly Disagree; 2 Disagree; 3= Neutral; 4= Agree; 5=
Strongly Agree

Statement Strongly Disagree Neutral Agree Strongly

Disagree Agree
demographic
composition
of owners or
management
such as age,
gender and
education
the owner’s or
manager’s
innovativenes

60
 s
Company
location
The industry
in which firms
operate
organizations
experience
service
innovation
pressure
through
competitors’
demonstration
of digital
advances

Interview Guide

i. What is services innovation?

ii. Does service innovation enhance competitive advantage?
iii. What are you doing as an organisation to ensure that service innovation has been
adopted?
iv. What are challenges that you encountering in adopting service innovation?
v. Do you think that if service innovation is full adopted you will have competitive
advantage in the market?
vi. What other strategies that you are currently using that enhance competitive advantage?
vii. How do you rank you rank your organisation in terms of service innovation utilisation?
viii. As an organisation what can possibily be the reseason for poor services innovation?
ix. With regards to insurance sector, what is the current service innovation status?

61
62