In the more and more competition economic prosperity, it appears that innovation is increasingly an important driver of competitive advantage in service firms. How to create service innovation to enhance services competitiveness is the first priority issue for the vendors among the industry. And customer-oriented is an important policy for enterprises to development strategy. This paper wants to devote a better understanding of the role of services in innovation. From a brief introduce of existing approaches (a four-dimensional model) to service innovation and creating customer –oriented organization to retain and reward loyal customers. The paper also reviews present research fields and hope to build a framework for strategic decision making in service innovation. Consider some wider implications of the innovation management and policy that can help to improve the decision making on service innovation to meet the needs of customers.
