Product-service Offerings Research Articles

Crafting strategic responses to ecosystem dynamics in manufacturing

This research goes beyond the dyadic view of co-opetition in supply chains and seeks to explore how firms that act as suppliers in a dynamic manufacturing ecosystem establish and sustain their strategic position. We interviewed 31 senior managers in seven firms that were identified by a committee representing government and academia as occupying various advanced manufacturing ecosystems. We argue that as actors within a manufacturing ecosystem interact overt time to co-create the overall product-service offerings, new relationships may be formed, and existing connections may be dissolved, giving rise to three co-opetition dynamics at the ecosystem level - capability configuration, value appropriation, and network governance. Our analysis unveiled eighteen operational tactics that suppliers deploy which combine to produce nine strategic responses that allow them to sustain their position within manufacturing ecosystems. Specifically, we discuss the role of suppliers in manufacturing ecosystems and capture the relationship between ecosystem dynamics and the strategic responses as they accommodate co-opetition. This research indicates that ecosystem performance is essentially a dynamic effort, which is simultaneously collective and distributed. Thus, policymakers should avoid carrying out analysis based on overly linear and single industry conceptualisations of manufacturing value networks.

An Analysis of Consumers’ Perception towards Rebranding

A massive increase in the variety of methods in which customers may express their identities has been one of the most important trends to emerge in the field of marketing over the course of the last ten years. This development has been largely fulled by the growth of one-to-one marketing and mass customisation, both of which have been important drivers of this trend. Because of this trend, many companies have renamed and repositioned their products and services to place more emphasis on how they complement the lifestyles of their target customers rather than on the functional aspects of the items themselves. In recent years, there has been a growing trend of rebranding in India, ranging from companies like Vodafone and Airtel and Hero MotoCorp (formerly Hero Honda) to media channels in a variety of different industries. This trend has been particularly prevalent in the telecommunications and automotive industries. In reaction to this movement, a number of multinational corporations have completely rethought and relaunched their product lines and service offerings. Throughout the process of rebranding, these companies lay a significant emphasis on the practical characteristics of their products and how those features fit into the lifestyle of a consumer. This strategy is favourably received by business houses. Companies prepare themselves to meet tough competition in their industries by revitalizing their brands, which also enables the companies to achieve a respectable part of the market. The rebranding efforts of Hero MotoCorp have produced some unexpected insights. Noteworthy are the drivers and strategy utilized by the two-wheeler company. These included an overhaul of the brand architecture, brand name, brand logo, and brand positioning with an emphasis on the development, renewal, and revitalization of the brand.

Benchmarking bike-sharing systems: an analysis of the sustainable potential of use-oriented solutions

PurposeProduct-service systems (PSS) are regarded as highly sustainable solutions. However, studies identifying and comparing the sustainable potential of product-service offerings by considering the three sustainability dimensions are still scarce. This paper aims to benchmark and analyse the sustainable potential of a use-oriented PSS, showing the influence of the context of implementation on the sustainable potential of the solutions.Design/methodology/approachBy adopting a competitive benchmarking approach, six bicycle-sharing systems from different countries were selected for analysis. The main sustainability-related aspects in use-oriented PSS (the systems investigated) were identified through a literature review. Multiple secondary sources were used to collect data about the analysed PSS. A qualitative analysis was conducted through triangulation of the sources to identify and compare the systems by considering the selected sustainability aspects.FindingsThe main results show that use-oriented PSS provide a range of economic, social, and environmental benefits, confirming the sustainable potential of such solutions. Several similarities between the systems have been identified, along with some differences, especially regarding their integration with other transport systems and the use of renewable energy, which can affect users' acceptance, operation efficacy, and overall sustainable potential of the solutions.Practical implicationsThis study identifies best practices that can be considered by other bike-sharing businesses to improve their sustainability potential.Originality/valueThis study identifies and explores the sustainable potential of bicycle-sharing solutions using a benchmark approach. It augments existing empirical knowledge on sustainable PSS and business models by revealing best practices, including the context that may enhance the sustainability potential of the solutions regarding environmental, economic, and social benefits.

From data to value: conceptualising data-driven product service system

With the rise of digital technologies, the possibility to retrieve a large amount of data from connected sources can become a key source of value creation in the context of service provision. Nevertheless, product service offerings that can be built on data retrieved from connected products, that we will call data-driven product service system, remains poorly covered from both the academic and the practitioners’ perspectives. Notably, a univocal definition of the characteristics of data-driven product service system is still missing. Therefore, this paper represents a first attempt in the systematic definition of data-driven services types and their features as a fundamental step to support their understanding and development. To accomplish this aim, the paper proposes a holistic view of data-driven product service system characteristics, employing a two-level hierarchical conceptual framework for business to business applications. The framework is constructed with a theory-building approach involving multiple industrial companies. The paper eventually reports a case study to demonstrate the applicability of the framework.

Distributed manufacturing as an opportunity for service growth in logistics firms

PurposeThe aim of the paper is to explore the changing role of a logistics service providers (LSPs) to better support their supply chain (SC) partners on their journey of advancing their product-service systems through distributing manufacturing around the world. The purpose of this paper is to investigate a novel route towards service growth followed by the LSP by integrating upstream into the value chain and the resultant consequences in the configuration of the servitisation strategy, SC structure and allocation of roles.Design/methodology/approachA longitudinal exploratory case study design is followed. The case company is one of the world’s largest LSPs.FindingsThe study highlights how companies can transition towards the development of service solutions when not following a uni-directional, downstream pattern of integration in the value chain. The findings challenge the established model of servitisation as a forward uni-directional process across the continuum from goods to a service-focussed logic. They illustrate how companies can also move in a reversed direction, move possible back-and-forth or extend and restrict their position along the servitisation continuum.Originality/valueThe study reveals that service transition involves a deliberate developmental process to build capabilities as firms shift the focus of their product-service offering. It provides novel empirical evidence of how the service growth journey can manifest itself in practice. With insights into the benefits and challenges of distributed manufacturing, it also highlights some of the opportunities available to LSPs to expand their product-service offerings and some of the potential threats.

Servitization Trend in Big Data to Personal Styling Service

Servitization is a customer service with integrated product-service offerings, called product-service systems. This study aims to analyze consumer awareness and user behavior of servitization and focus the personal styling service in fashion industry. We used the social network and text mining techniques to capture social network service communications, which is a great source of useful information close to customers. Frequency analysis, centrality analysis, clustering analysis, and network visualization were conducted to investigate consumer awareness and user behavior using big data in social media. “Shoes” and “clothes” were the most frequently apparent keywords with the notion of “servitization,” and the keywords “home” and “fashion” had the highest degree of centrality in the network. Four clusters were found on the notion of servitization: fundamentals, fashion, home, and job seeking. A significant transition toward servitization is ongoing in various industries, especially the fashion industry, according to the clustering analysis. To gain a better understanding of this transition, a commercially available personal styling service was investigated. Three major companies were selected by sales volume and reputation, and the names of these companies were used as search keywords to acquire related data on social media. The keywords “men’s fashion” and “subscription box” appeared frequently apart from common fashion-related hashtags. In betweenness centrality, “best quality” and “low price” were the most important keywords in the market. This study contributes to the investigation on the trend of servitization and provides insights to service providers on consumer awareness and user behavior toward this trend via social media.

International business strategy: development of an integrated framework and typology

PurposeThe purpose of this study is international business strategy (IBS) has evolved into a complex and vast domain of study. Given this fact, the author first proposed a set of screens that a firm’s IBS manager was required to assess before venturing into a foreign country. Then the author developed an integrated IBS framework to secure a holistic view regarding IBS. Finally, the author proposed a typology to classify IBS archetypes.Design/methodology/approachThe author undertook a systematic and integrated literature review of IBS literature. The literature review was carried out with a conceptual perspective in mind. Incremental and argumentative logic was applied to develop the integrated IBS framework from a wide domain of literature. Furthermore, the typology on IBS initiatives was also developed based upon a classification scheme developed in the framework.FindingsThe author developed the integrated conceptual framework based upon six building blocks which were conceptual elements. The framework consisted of the antecedent variable as internationally deployable organizational resources and capabilities (IDORC), the mediating variables as internationally implementable organizational process (IIOP), internationally executable practices and activities (IEPA) and international market product service offerings (IMPSO). The moderating variable was international initiatives management direction and control (IIMDC), while the dependent variable was international market performance assessment (IMPA). Thus, IDORC, IIOP, IEPA, IMPSA, IIMDC and IMPA were the building blocks of IBS framework. There were 12 types of IBS typologies based upon the dominant role played by the home and host countries in the six building block elements of IBS mentioned. The 12 typologies were domestic reproduction (DR), foreign country centric offerings (FCCO), international offerings perspective (IOP), foreign country-driven activities (FCDA), international-driven activities (IDA), foreign country-driven process (FCDP), international-driven process (IDP), foreign country initiatives domestically controlled (FCIDC), international initiatives domestically controlled (IIDC), international initiatives home-dominant foreign dyad controlled (IIHDFDC), international independent initiative (III) and international coordinated network approach (ICNA).Research limitations/implicationsIn this study, an integrated framework on IBS was developed. In the theoretical framework, antecedent (DORC), mediating (IIOP, IEPA and IMPSA), moderating (IIMDC) and dependent variables (IMPA) have been incorporated. This was the first theoretical contribution of this paper toward IBS theorization. Second contribution of this paper was toward typology development regarding IBS initiatives archetypes. The 12 typologies were DR, FCCO, IOP, FCDA, IDA, FCDP, IDP, FCIDC, IIDC, IHDFDC, III and ICNA. The IBS typology is based upon the six constituent concepts developed from literature.Practical implicationsManagers who are responsible for the planning and execution of IBS initiatives could from the integrated IBS framework comprehend what would be the steps required to plan and execute an IBS strategy in its entirety for success in foreign markets. Furthermore, managers could understand the various mediation and moderation roles regarding the IBS factors present in any firm internationalization effort. This would help managers not only to amplify the mediating effects but also to tweak the efforts of moderation so as to arrive at better internationalization performance. The section on typology on IBS initiatives would help managers to secure a better fit for the IBS initiative of the firm. The typology would anchor managerial perspectives regarding how the home country firm organizational contributions on resources and capabilities, processes, practice activities and products and services need to be offered in foreign countries.Originality/valueTo the best of author’s knowledge, this is one of the first frameworks regarding an integrated perspective on IBS and a typology on IBS based upon a set of antecedent (resources and capabilities), mediation (process, activities and market offerings), moderation (management control) and dependent (performance) variables building on firm resource-based view perspectives.

Exploring the profit model of servitising manufacturers: a resource-based perspective

Servitisation is a kind of business model innovation, and the profit model of servitisation is the core elements of this innovation. In this paper, a comparative case study of two servitising manufacturers was carried out through analysing and cross-comparing different types of servitisation profit models for different product-service offerings within both firms. We classify servitisation profit models into four categories, and then delineating basic profit model elements and finally exploring the relationships between these elements and a firm's resources, capabilities and product-service offerings. The conclusions are that, the effective integration of resources is the prerequisite to foster key capabilities so to build relevant revenue streams, thus forming appropriate servitisation profit models. Understanding the basic logic between elements within the servitisation profit model and the relationship between resources, capabilities and business offerings is critical when the manufacturer is seeking successful transition towards servitisation.

Exploring the profit model of servitising manufacturers: a resource-based perspective

Servitisation is a kind of business model innovation, and the profit model of servitisation is the core elements of this innovation. In this paper, a comparative case study of two servitising manufacturers was carried out through analysing and cross-comparing different types of servitisation profit models for different product-service offerings within both firms. We classify servitisation profit models into four categories, and then delineating basic profit model elements and finally exploring the relationships between these elements and a firm's resources, capabilities and product-service offerings. The conclusions are that, the effective integration of resources is the prerequisite to foster key capabilities so to build relevant revenue streams, thus forming appropriate servitisation profit models. Understanding the basic logic between elements within the servitisation profit model and the relationship between resources, capabilities and business offerings is critical when the manufacturer is seeking successful transition towards servitisation.

Make-or-buy configurational approaches in product-service ecosystems and performance

This research examines firm boundary configurations for manufacturers' product-service offerings. We argue that the building of a product-service ecosystem through collaboration with service providers in certain types of business services can increase performance as a result of the superior knowledge-based resources coming from specialized partners. By using fuzzy set qualitative analysis on a sample of 370 multinational manufacturing enterprises (MMNEs), the results reveal that effective servitization is heterogeneous across manufacturing industries and across business service offerings. The findings indicate that most industries achieve their highest performance through collaborations with value-added service providers in two out of three of the service continuum stages (Base and Intermediate services); while keeping the development of Advanced services in-house. The results help to contextualize the best practices for implementing service business models in MMNEs by detailing which service capabilities should be retained in-house and which should be outsourced to specialized partners in various industrial contexts.

Business model evolution of customer care services

Purpose: Servitization is a rising trend as companies look for new revenue streams. This paper presents a study of customer care business model evolution in the smartphone industry. The paper identifies key changes in the business models during recent years and their implications for companies seeking after-sales service excellence and new revenue sources.Design/methodology/approach: The research approach is built on the literature of product-service offerings, servitization, and business models. The empirical part is based on a multiple case study of former Nokia mobile phone business, the Apple iPhone, and Google Android.Findings: Three different customer care business models and an analysis of the changes in the smartphone industry are presented. This paper demonstrates how after-sales services have become increasingly important in generating new revenue. Moreover, the nature of after-sales services has fundamentally changed in the industry.Research limitations/implications: Due to the careful selection of the cases that represent the studied industry well, the results provide valuable insights for practitioners and researchers involved in developing after-sales service offerings in the mobile industry. However, a case study research approach may not offer a generalized picture of this phenomenon in other industries.Originality/value: A novel analysis of customer care evolution in the smartphone industry is presented. In addition, the study demonstrates that applying the concept of business models to after-sales services provides new insights into these services and their roles in business.

A Fuzzy Decision Support Approach for Modularization Scheme Selection of Product-Service Offerings

Many manufacturers today are striving to offer high value-added product-service offerings (PSO) due to increasing competitions and environmental concerns. Modularization of PSO can improve design efficiency and quickly response to customer’s personalized requirements. However, research has rarely been conducted on the PSO modularization schemes evaluation which is critical to the success of the whole modularization. There are also no proper evaluation criteria for such heterogeneous form of hybrid solution. Therefore, in order to select reasonable modularization scheme of PSO, an approach based on fuzzy TOPSIS with integrated weights is proposed in this paper. Integration of subjective weight and objective weight helps to avoid underestimating or overestimating weigh of evaluation criteria, while the fuzzy TOPSIS approach provides a structure of multi-criteria decision-making (MCDM) under uncertain environment. A case study of compressor rotor service is used to validate the feasibility and effectiveness of the proposed method.

An Integrated Design Framework for Virtual Enterprise-Based Customer-Oriented Product-Service Systems

Product Service System (PSS) design has been witnessed to achieve tremendous progress in recent years. Researchers and practitioners have proposed many frameworks to deal with variety of challenges along PSS lifecycle. However, despite the common sense of four fundamental constituent components of PSS-products, services, supported network and supported infrastructures, majority of them only focus on collaborative design of products and services, and few of them attach importance to supported network. The framework we proposed in this paper introduces the Three-Dimensional Concurrent Engineering (3DCE), which is widely recognized in product design field, into PSS design, in order to achieve the integrated product service offerings, processes and supported network design, hoping to bridge the gap of supported network design in a PSS. Meanwhile, this framework adopts Virtual Enterprise (VE) as a manifestation of supported network in order to provide the system with variety of skills, resources and supported infrastructures in an effective and dynamic way. What’s more, due to the increasing significances of customers, this framework takes both customers’ requirements and providers’ requirements into consideration, and is dedicated to address a win-win solution for both with the help of PSS design and assessment techniques.

Collaborative on-demand Product-Service Systems customization lifecycle

Product-Service Systems (PSS) are being revolutionized into smart, connected products, which changes the industrial and technological landscape and unlocks unprecedented opportunities. The intelligence that smart, connected products embed paves the way for more sophisticated data gathering and analytics capabilities ushering in tandem a new era of smarter supply and production chains, smarter production processes, and even end-to-end connected manufacturing ecosystems. This vision imposes a new technology stack and lifecycle models to support and capacitate smart, connected products and services.The main contribution of this article is a novel PSS customization lifecycle methodology with underpinning technological solutions that enable collaborative on-demand PSS customization by supporting companies to evolve their product-service offerings by transforming them into smart, connected products. This is facilitated by the proposed lifecycle through formalized knowledge-intensive structures and associated IT tools that provide the basis for actionable PSS and production “intelligence” and a move toward more fact-based manufacturing decisions. The basic building blocks of the proposed PSS customization lifecycle and its technological stack are implemented in an integrated tool-suite and validated via large-scale industrial case studies. The PSS customization lifecycle described in this paper, paves the way for a new direction in highly-connected, knowledge-enabled smart factories, where devices, production equipment, production processes, and human-operators are connected, offering decision-making support on the basis of production knowledge and data.

Integrated product service offerings – Challenges in setting requirements

The objective of this paper is to explore what challenges exist when setting requirements for an Integrated Product Service Offering (IPSO). An IPSO, sometimes called Product Service System, is a concept with increased interest from manufacturing companies. It consists of a combination of products and services that, based on a life cycle perspective, have been integrated to fit targeted customer needs. In order to achieve a successful IPSO, it is important to collect aspects from many actors, something which sometimes is challenging for companies moving towards providing IPSOs.The four challenges found when setting requirements in IPSO development are; identification and inclusion of relevant aspects from relevant actors throughout the IPSO’s life cycle, understanding of the underlying aspects for all requirements for all elements of the offering, prioritization of requirements, and the difficulty to track how requirements affect each other between different elements in the IPSO.The methodology used to find these challenges was a combination of a structured literature review and an interview study at three manufacturing companies moving towards providing IPSOs.

Guidance on the Conceptual Design of Sustainable Product–Service Systems

The product–service system (PSS) has great potential to promote the circular economy (CE) and sustainability. Recent studies have highlighted the importance of associating social values with sustainable PSS because social actors, including stakeholders, institutions, and communities, are the key to organizational innovation and behavior change. However, it is still not clear how companies can incorporate the social context into service strategies and co-create sustainable value with their stakeholders. Through overall discussions on related studies, this concept paper proposes theoretically based guidance for developing sustainable product–service offerings in the early planning phase. A case scenario of recycling is presented to demonstrate the operation of the proposed approach. The results suggest that companies should expand the scope of their understanding of customer problems beyond the product use. Engaging in social issues such as skill empowerment and job creation can generate long-term benefits and strengthen the brand image. In addition, working with communities and other enterprises via incentives or interactive activities can foster open innovation for CE. The proposed approach serves to assist designers in handling more comprehensive contexts of sustainability and allow better preparations for resource integration in the early PSS design phase.

Service Differentiation and Capacity Strategy for Joint Product-Service Offerings

Several firms offer associated services along with their products. A question facing such firms is whether vertical differentiation in their product line should be extended to associated services. The marketing view encourages service differentiation (lower cannibalization), whereas the operations view favors integration of services (economies of scale). We offer insight into this tradeoff along two dimensions: Complexity involved in serving multiple segments together, and cannibalization potential. We consider a firm whose customers vary in their willingness-to-pay (WTP) for product quality and their sensitivity to service levels and can self-select across two products. We find that even when there is no complexity involved in serving multiple segments, the differentiated service strategy may be preferred purely to prevent cannibalization. With high complexity the implications are subtle---cannibalization may increase or decrease the firm's preference for the differentiated service strategy depending on the demand mix of higher and lower WTP customers. Cannibalization also makes the role of total demand in the service strategy decision more pronounced. Specifically, changes in key parameters such as capacity cost and product differentiation may make the differentiated service strategy more or less attractive depending on the total demand size as well as the demand mix.

Design for product-service systems: a procedure to enhance functional integration of product-service offerings

Design and development of an integrated Product-Service System (PSS) aims at replacing stand-alone products or services with a functional offering. However, issues regarding this transition are dissimilar and differentiated. This study discusses the importance of PSSs analysing the theoretical studies accomplished in the extent of their design and development processes. Based on this, a novel procedure, built on the Design Science approach, is proposed, where the distinct models from the literature are merged towards a unified structure serving as a robust and generic methodology for designing PSSs. Each stage of this process is then developed to present a comprehensive design procedure, called the Functional Engineered Product-Service System (FEPSS), which is based on morphological thinking to conceptualise PSS offerings. A case study illustrates the use of the proposed framework underlining its effectiveness in merging stakeholders' needs, development activities, as well as products and services elements enclosed in the solution.

Design for product-service systems: a procedure to enhance functional integration of product-service offerings

Design for product-service systems: a procedure to enhance functional integration of product-service offerings

Barriers and conditions of open operation: a customer perspective on value co-creation for integrated product-service solutions

Enabling value co-creation between provider and customer is a key requirement for successful adoption of integrated product-service offerings in a capital good industrial setting. However, little is known about the barriers and conditions explaining customer's willingness to 'open up' their internal processes for value co-creation with providers. Based on a multiple exploratory case studies with four customers and four providers within the manufacturing and process industries, this study identifies three barriers to open operation (operational cultural resistance, loss of operational know-how and risk of operational conflict) which may restrict the potential for increased value co-creation and must be managed to support the adoption of integrated solutions. In addition, we identify two key conditions related to the criticality of the operational process and the state of operational competences as strong influences for which form of open operation engagement would be favoured by customer. The study holds both theoretical and practical implications.