This paper explains the general structure of a (global) value chain and sets it into the context of product-service systems. Furthermore, it evaluates benefits and disadvantages of product-service systems and their impact on the value creation and on finances, identifying cost savings and inevitable occurring costs.
Nowadays, companies, especially product-grounded companies, face increasing competition. Companies underlay fundamental shifts in the value creation process. In the past, the focus was on the sale of a product or service, whereas today it is the customer with his needs and wishes.
It gets more difficult to differentiate products from the products of one’s competitors, as anyone can build products with comparably good quality. Therefore, the commodity trap appears, meaning that the customer’s perceive products as exchangeable. Hence, companies need to reconsider their business models and react to the inevitable competition. A possible solution is to rethink their business models and implement a more service-oriented perspective in their range of products.
Table of Contents
1 Introduction
2 Value Chain
2.1 Corporate Value Chain
2.2 Global Value Chain
3 Product-service systems
3.1 Classification of Product-Service Systems
3.2 Servitization and Product-Service Systems
3.3 Value Creation of Product-Service Systems
3.4 The shift of the Value Chain – from a Product Driven to an Open Services Value Chain
4 Financial Impacts
4.1 General Cost Drivers in a Value Chain
4.2 Costs-Consideration on Value Chains of Product Service Systems
5 Conclusion
Objectives and Topics
The primary objective of this work is to analyze the fundamental shift from traditional product-driven business models to service-oriented product-service systems, evaluating the resulting implications for value creation, corporate finance, and competitive strategy.
- Examination of corporate and global value chain structures
- Classification and analysis of product-service systems
- Evaluation of servitization as a driver for business model innovation
- Analysis of cost drivers and the financial impact of transitioning to service-based models
Excerpt from the Book
3.1 Classification of Product-Service Systems
To have a more differentiated view on product-service systems, the following figure illustrates the three main categories of Product-Service Systems:
The first main category is product-oriented services. The product itself has a dominant role here and furthermore some additional services are offered.
Use-oriented services represent the second main category. Again, the product has an important role and its ownership remains with the provider. Therefore the provider can offer the product in different variations to several customers.
Finally, the last main category is result-oriented services. There is no predetermined product involved. Furthermore the provider and customer agree on a specific result.
Summary of Chapters
1 Introduction: This chapter highlights the increasing competition faced by companies and introduces the necessity of transitioning from product-focused to service-oriented business models.
2 Value Chain: It defines the core management concept of the value chain and explores its evolution from a corporate, internal perspective to a global, cross-company model.
3 Product-service systems: This section classifies various product-service systems and explains the mechanism of servitization, detailing the shift in value creation from value-in-exchange to value-in-use.
4 Financial Impacts: This chapter provides an analysis of cost drivers within value chains and assesses the economic advantages and disadvantages of implementing service-oriented business models.
5 Conclusion: The final chapter summarizes the inevitability of the transition for product-grounded companies and emphasizes the need for synchronizing global value chains in the future.
Keywords
Value Chain, Product-Service Systems, Servitization, Value Creation, Global Value Chain, Competitive Advantage, Cost Drivers, Business Models, Eco-efficiency, Open Services Value Chain, Customer Co-creation, Financial Impacts, Innovation, Strategy, Sustainability.
Frequently Asked Questions
What is the core focus of this publication?
This work examines the transition of companies from traditional product-focused business models to service-oriented models, specifically addressing how this shift impacts value creation and financial structures.
What are the central themes discussed in the paper?
The central themes include the structure of value chains, the definition and classification of product-service systems (PSS), the concept of servitization, and the financial consequences of shifting business models.
What is the primary objective of the research?
The objective is to understand how product-service systems can regain competitiveness and to identify the benefits and disadvantages of this transition on a company's value creation process and overall finances.
Which methodology is applied in this analysis?
The author uses a theoretical approach, analyzing established management models such as Michael Porter's Value Chain and evaluating them against contemporary service-oriented frameworks and research literature.
What topics are covered in the main section of the book?
The main sections cover the evolution of corporate and global value chains, the classification of product-service systems, the role of servitization, and detailed cost considerations including ten specific cost drivers.
Which keywords best describe the research?
Key terms include Value Chain, Servitization, Product-Service Systems, Financial Impacts, Value-in-use, and Open Services Value Chain.
How does the transition to service-oriented models impact material use?
The publication notes that service-orientation supports eco-efficiency, leading to dematerialized services, extended material life, and reduced resource consumption in production and logistics.
Why is the "Open Services Value Chain" considered important?
It represents an evolution where inputs and outputs involve external partners, open innovation, and customer co-creation, enabling companies to move beyond being a cost center to becoming a service-driven competitive entity.
What are the potential financial risks of this transition?
Companies may face increasing costs in Research & Development, organizational restructuring, management, and the high transaction costs associated with building new networks and cooperatives.
- Arbeit zitieren
- Elena Ristova (Autor:in), 2017, The Value Chain in Product Service Systems, München, GRIN Verlag, https://www.hausarbeiten.de/document/703076
