Abstract
Service-dominant logic (SDL) provides a conceptual understanding of and widens the view on value creation in service innovation for product-centric companies. However, empirical research linking SDL and service innovation is still limited albeit expanding. This study provides insights beyond existing discussions on product and service dimensions using the theoretical lens of the value logic perspective. More specifically, the purpose of this study is to examine how value can be understood, targeted, and created in the pursuit of service innovation by product-centric manufacturing companies. Building on a previous investigation of two multinational product-centric manufacturing companies, this paper identifies and develops a theoretical model to describe the space shift in service innovation with four different kinds of value logics, namely, product-based value logic, service-based value logic, virtual-based value logic, and systemic-based value logic. Using a digitalization-driven new service innovation, namely the My Control System, which is a web-based service delivery platform, this paper describes space shifts to enhance value through four value logics as efforts. Further, challenges associated with different value logics are described in terms of complexity traps and service gaps. The study also contributes to bridging the gap between SDL theory and practice by developing a midrange theoretical model for value creation as a specification and amendment to SDL that supports SDL-guided service innovation and servitization in practice.
Highlights
Servitization is often used as an opportunity to increase service business potential and revenue potential in product-centric manufacturing companies faced with stronger competition and commoditization in traditional product business (Vandermerwe and Rada 1988; Ostrom et al 2015; Kowalkowski et al 2017)
The main shift in the My Control System (MCS) innovation approach is illustrated as a movement from information technology (IT)-based products to the MCS platform in 2015. Another important movement in service innovation, which could be brought into the context of a more flexible information systems (IS) gate model, was the focus on the landscape of service operation, where control system products are used and the services related to them are co-created with customers, sales channels, and the ABB aftermarket organization
Based on the theoretical model and empirical insights from the MCS case journey, we find that there are significant opportunities for companies to enhance service innovation using each source of value and each of the value logics, as well as using hybrid forms between them
Summary
Servitization is often used as an opportunity to increase service business potential and revenue potential in product-centric manufacturing companies faced with stronger competition and commoditization in traditional product business (Vandermerwe and Rada 1988; Ostrom et al 2015; Kowalkowski et al 2017). To address this research gap, this study attempts to take advantage of SDL as a conceptual resource for framing how to understand service innovation, which is helpful in the effort to widen space and opportunities for servitization. The study aims to bridge the gap between SDL (e.g., Ballantyne et al 2013; Edvardsson and Tronvall 2013; Korhonen 2014; Ordanini and Parasuraman 2011), its practical deployment, and its development into a theory of value creation (e.g., Fischer et al 2012; Gronroos and Helle 2010; Lindgreen et al 2012; Skalen et al 2014) by developing a midrange theoretical model (e.g., Brodie et al 2011) that can support SDL-guided service innovation and servitization in practice. The key conclusions and plans for future research are discussed in the final section
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