A study in product-service systems strategies

Abstract

What are examples of successful companies innovating in services to create Product- Service Systems that can command a price that exceeds the cost of capital and enhance, protect, or replace the core products? After a brief literature review and discussion of the challenges of classifying and defining services and how they are related to products, this thesis provides a series of brief case studies looking at how companies construct a services strategy that complements, strengthens, or replaces their product strategy. Service-centric offerings are categorized into three primary types: product-based (e.g. customization or repair), information-based (e.g. telematics), and value-based (e.g. financing, leasing, or utilities). The thesis focuses on positive examples, but some negative examples are also presented. Summary conclusions on the nature and elements of successful product-services strategy are also presented. Primary research tools are corporate annual reports, SEC 10-K (and other) filings, corporate websites, the Internet, and business research tools like Orvis, Hoovers, and Lexis-Nexis. The thesis studies mainly (but not exclusively) publically traded US-based companies with a strong emphasis on the automotive, heavy machinery, and information technology sectors.