How implementing a Product-Service System can improve a company's value proposition : A case study

Traditionally, many firms had to focus on the price of their products, as there was a constant threat that companies from low-cost labor countries would steal their work if not. Thus, there was a realization that services needed to be integrated with the products to enhance the value and become more competitive, which became known as a Product-Service System. This means that the customer finds value in the use of the product, rather than in the product itself. In this thesis, the purpose is to find out how a company can improve their value proposition by implementing a Product-Service System, but also what benefits they will receive from that, and what barriers are needed to overcome.Gaining an understanding for the value proposition within the business model, and also the Product-Service System, helped facilitate the execution of this thesis. By studying theoretical information, along with conducting two case studies at a case company and a benchmarked company, data could be collected. The benchmarked company is Product-Service System oriented, and hence it added empirical evidence to the theoretical information. The theoretical information was gathered through books and articles, and therefore a deductive approach was used for that.Findings in this thesis are that in order to improve the value proposition, but also gain and retain customers, a company needs to focus greatly on integrating services with products. This means offering more comprehensive product/service solutions, by getting to know the customers and find out how to satisfy their needs. This requires a closer relationship between the two parties, and is more time consuming. The organizational structure and culture will also need to change in order to accommodate the new offerings and way of doing business, along with coming up with a new pricing strategy since more value-added services are included with the products. This will, potentially, result in enhanced value for the customers, and the company can gain a sustainable competitive advantage.Validerat; 20130609 (global_studentproject_submitter