Analysis and Design of Service Business Models

Service has an enormous importance for many economies. In Germany in 2012, more than 73% of the population was employed in the service sector (The Federal Statistical Office 2014). Services are omnipresent and can have a variety of instantiations, from a more traditional and ordinary service, such as a haircut, to innovative and highly complex information technology services. From a corporate perspective, developing business with service is a key goal and a substantial challenge for many companies in today’s markets (Eggert et al. 2014). Drivers such as global competition, advances in technology, and attractive new market opportunities foster a process of servitization and thus motivate the search for innovative service business models (Buhl et al. 2008; Neu & Brown 2008). This change has also spawned interest in business model research in a service context (Chesbrough & Spohrer 2006; Zott et al. 2011; Fielt 2012). In contrast with traditional innovations that comprise mostly product development or traditional research and development (Sawhney et al. 2006), the transformation to a customer-centric mindset leads to innovative business models. These innovations focus on new possibilities for value creation for the customer and thus often emphasize service (Fielt 2012). Ideally, robust research should underpin conceptual foundations and the design of methods for the analysis and design of business models in the service context. Such methods shape our understanding of markets and offerings and thus influence decisions made in enterprises (Nenonen & Storbacka 2010; Zott & Amit 2010). This thesis focuses on business models and co-creation in service environments. Because of the substantial shift that emphasizes value creation as service logic, this thesis centers on the development of a service-specific business model representation that enables academics and professionals to understand, analyze, and design the business logic of a service in a comprehensive way. Rooted in a cumulative research design this thesis contributes to the fields of business model research, service research, and design science research. First, this thesis contributes to business model research by proposing a business model representation for service. Within this contribution, knowledge from service logic is connected to the core elements of the business logic that is represented with business models. Moreover, an evaluation method is designed to help successfully develop new business model representations. Second, this thesis proposes a way to translate and operationalize co-creation. To do so, business model thinking helps delineate co-creation of value as part of a general business logic. In addition, service research supplements several examples for an ongoing fundamental, service-driven shift in the business logic of many industries. Third, a cumulative research was conducted. In doing so, an example of cumulative research in and a slight extension of the DSRP tool set is given. The central contribution of the dialogue between business model research and service science—two previously unconnected research streams—is the SBMC. The SBMC aims for an extensive expansion of the BMC (Osterwalder & Pigneur 2010) to a service-specific perspective. Identified service-specific characteristics, such as co-creation, interaction, and relationship, determine important attributes of a service logic. These attributes must be considered during the analysis, representation, and development of service business models.