Recently, as service providers are urged to develop different ways to meet customers’ needs, modularity has been proven that it improves service development as well as service innovation by increasing the flexibility. Hence, the purpose is to find out how to apply the concept of modularity in service innovation. The research methodology follows a qualitative single case study method combined with documents research and primary information gathering. The results indicated that the development of modular service including three dimensions that can be used to create value in service development as well as service innovation. With the empirical findings from the case company Swire Coca-Cola Taiwan, this thesis attempts to show how the service providers can use modularity to identify, develop and deliver new services.