Visnjic - Service Business Model Innovation

Question 1

Three levels of servitization

Answer 1

1 - product only business model

2 - product orientated business model = PLS

3 - customer orientated business model = adding use- and result orientated services (PSS)

Question 2

Framework

Answer 2

1 - product orientated business model results in higher profit margins compared to product only

2 - customer orientated business model results in higher profit margin compared to product orientated

3 - Interaction of product innovation and product orientated business model is characterized by an inverted U-shape -> when innovations get old, shape goes down

4 - interaction of product innovation and customer orientated business model is linear positive -> not only focused on products but rather customer needs

Question 3

Results & recommendations

Answer 3

1 - product innovation and servitization combined result in long term performance benefit with short term sacrifices
= competing for resources for example HR

2 - strong product innovators should focus on customer orientated business model -> high need for R&D

3 - weak innovators (laggards) shall adopt product orientated first and then switch to customer orientated business models