۱- Introduction

۲- Theoretical background

۳- Materials and methods

۴- Findings and discussion

۵- Conclusions

References

Abstract

For many companies, the servitization of business grounded on Product Service Systems is proving to be a winning value proposition based as it is on a distinctive mix of economically, socially and environmentally sustainable solutions aimed at satisfying customer’s needs. This research investigates the conjoint effect of three potential sources of PSS’s competitive advantage: the type of PSS, i.e. a value proposition directed at a market segment based on specific customer behaviour, the core resources, competences and organizational processes on which the PSS’s business model is based and their level of protection from competitor’s replication. We adopted a multiple case study methodology to take into account the complex interrelation of the variables characterizing the phenomenon investigated by sampling 10 companies and collecting data by means of semi-structured interviews. Results of within- and cross-case analysis reveal that Use-Oriented PSS business models gain a competitive advantage from physical resources and organizational processes, whether protected against replication threat or not, while Result-Oriented PSS business models from people competences. Human capital is fundamental also for ProductOriented PSS business models, but companies can reach a competitive advantage only if protected against replication threat from competitors. The paper contributes to the expanding PSS literature by identifying potentially distinctive factors of the PSS business model and by providing useful considerations on PSS competitive and strategic potential, with an in-depth analysis of success elements.

Introduction

The Servitization of business refers to a shift from an exclusive focus on products or an exclusive focus on services toward integrated systems or bundles of products and services, with services playing an ever more relevant role as compared with products (Vandermerwe and Rada, 1988). Servitization can be based on a Product Service System, “a business model focused toward the provision of a marketable set of products and services, designed to be economically, socially and environmentally sustainable, with the final aim of fulfilling customer’s needs” (Annarelli et al., 2016: 1017). The integration of products and services can bring a non-negligible innovative potential, securing competitiveness while at the same time allowing companies to address environmental concerns and provide more sustainable offerings on the market. Indeed, PSS brings within it an incentive for companies to prolong the useful products’ life cycle, so as to ensure a better exploitation of physical resources and offering customers a more satisfactory experience (Tukker, 2015). Although there has been substantial research into Servitization and PSS for more than 20 years, there are still some important gaps concerning the analysis of the strategic value of PSS and its ability to constitute a value proposition (Baines et al., 2017; Kuijken et al., 2017). It is essential to investigate the current role of PSS as a value proposition and, to this end, evaluate the competitive advantage obtained by firms thanks to PSS implementation (Lightfoot et al., 2013). In their review, Annarelli et al. (2016) show that only a small number of papers (if compared to the total academic production on PSS) (~10%) have provided an analysis of PSS’s competitive potential. A considerable amount of contributions investigated the sustainability potential. Baines et al. (2007) underlined the impact of PSS on environmental dimension of sustainability: the reduction of consumption of inputs, of waste production and of public pressure on environmental issues. Lee et al. (2012) highlighted that PSS can impact positively on social sustainability by improving customers’ quality of life, comfortability of living environment, income level and health status. As regards the empirical base, some authors have focused on manufacturing firms. Azarenko et al. (2009) conducted a demonstration case study to investigate the feasibility of PSS for machine tool providers operating in a B2B context. Rese et al.