Alliance formation by intermediary ventures in the solar service industry: implications for product–service systems research

Abstract

Product–Service System (PSS) business models let firms sell the functionality of a physical product rather than the product itself, typically while retaining ownership and control of the product. PSS business models can increase the sustainability of product industries as the life-cycle responsibility of PSS firms incentivize the creation of more durable products, facilitate effective repair and maintenance regimes, and make obsolescence plans for products important.Extant PSS research is predominantly concerned with how manufacturing firms add PSS offerings to their existing operation, a process that often is difficult. This article argues that a key source for PSS growth may be intermediary firms, purpose-built for the business model to constitute a link between manufacturers and customers. The topic has been touched upon indirectly by scholars but not dealt with by PSS literature as a phenomenon in its own right. Yet intermediary PSS actors are already reshaping technology sectors. The solar panel market in the US, today dominated by the business model, is a prominent example. Firms with intermediary PSS business models are also advancing in areas such as local heating solutions and electric vehicle sharing.So how do intermediary PSS firms emerge? Based on comprehensive case studies of intermediary firms in the solar industry and other sectors, this article presents central insights on how intermediary PSS ventures are built and what role they can play. The study focuses on the types of alliances and alliance formation processes needed by intermediary ventures while also suggesting hypotheses on the sustainability impact of the business model. In addition to theoretical contributions the article provides advice to manufacturers aiming to benefit from the growth of intermediary PSS business models.