In response to competitive and economic pressures, an increasing number of manufacturing firms are adding services to their traditional product offerings. However, companies are confronted with an arduous undertaking, and find it difficult to servitize successfully and profitably. This thesis investigates the transformation that traditional manufacturers undergo to become providers of integrated products and services, a phenomenon known as servitization. Servitization is considered a strategic re-direction of the manufacturing organisation and a major challenge for senior management. The purpose of this study is to provide better understanding of the change that occurs when a manufacturer attempts servitization. The study adopts a qualitative theory building approach to investigate an under-researched phenomenon and a major managerial challenge. It follows a strategy of engaged scholarship to understand a complex organisational problem. The research utilised multiple case studies, action research, and focus groups to tackle a problem with significance to industry. The findings reveal the nature of servitization as a complex transformative change which exposes the manufacturing company to its environment in new ways, and closely interlinks the organisation with a network of stakeholders through new dependencies. The transformation of traditional manufacturers towards servitized organisations is multi-dimensional and goes through eleven dimensions of transformation across the organisation and its network. In addition, thirty nine forces of change were found to influence the outcome of servitization, and were categorised into three sets of change drivers for servitization. The results of the study led to the formation of a model for transformation towards a servitized organisation for use by industry practitioners to roadmap and facilitate their organisation‟s shift towards services. The model represents a novel approach to managing servitization. This research has addressed a literature gap and met an industrial need, and has made a significant contribution to knowledge about the change that traditional manufacturers experience to become servitized organisations.

This research aims to explore and propose a more effective management of rail and road infrastructure and the possibility of a more resource-efficient road and rail infrastructure by applying business models based on performance and a life-cycle perspective. There is a lack of efficiency in the Swedish rail and road infrastructure industries - at the same time as the availability of the rail tracks and roads is essential. Rail and road infrastructure have long lifetimes, around 40-60 years, and during these decades regular maintenance and reconstruction are needed to ensure proper function. Large amounts of resources are required to construct the infrastructure, and the overall environmental pressure depends substantially on this. This research is largely based on interviews conducted with the buyer, contractors and design consultants for rail and road infrastructure in Sweden. Literature reviews have been conducted to develop the framework needed to analyze the empirical findings. This research contributes by building on theory in areas such as Integrated Product Service Offerings (IPSOs) and eco-design, and this abstract presents a brief summary of the overall conclusions. Several challenges for rail and road infrastructure in Sweden have been identified, such as the lack of information and knowledge transfer between different projects and actors. This is due to e.g. the use of traditional short-term contracts and conservative cooperate cultures, creating sub-optimizations in management. Increased collaboration, through e.g. partnering, seems to be a promising way to increase the information and knowledge transfer between actors by increasing trust and interaction. In this way, management would be more effective, and by involving contractors in the design phase, more efficient technical solutions could be developed and used. Additionally, increased involvement by the design consultants and an iterative information loop between design, construction and maintenance could also be beneficial. The research indicates that increased cooperation increases trust. In this way, there is a possibility to remove the detailed requirements that prevent new ways of working. Rail and road infrastructure have characteristics, such as the resources used and the importance of availability, that are well-suited for IPSOs. This performance-based business model with a life-cycle perspective provides incentives to optimize the use of resources and provide a holistic view for management that is lacking today for rail and road infrastructure. However, a long-term contract such as an IPSO creates uncertainties. The actors are risk-averse, which is an obstacle in the development of new business models and contract forms. Most of the risks and uncertainties identified are due to lack of experience. This implies that an implementation of IPSOs will have a steep learning curve. Additionally, risk allocation between the actors is important for effective management: too much risk for the suppliers will make them reluctant in developing new solutions, and they will use a risk premium to cover up for the risk.

Modern lifestyles in the developed regions of the world operate beyond our planet's resource capacity. Over-consumption has not only proven detrimental for the environment, but has also undermined our capacity to achieve deep life satisfaction and societal well-being. Embracing more sustainable ways of consuming and producing is key in order to foster the conditions for humanity to flourish. Strategies for disrupting the dominant consumption patterns lie within the next challenges, as adoption of sustainable innovation is still disappointingly low and needs to be accelerated. Design for Sustainability has contributed important technological advances to improve production and life cycle efficiency (i.e. eco design, cradle to cradle). However, it is increasingly recognised that sustainability is not just a technical matter, but ultimately a cultural issue. One of the problems is that people perceive sustainability as a loss, rather than a gain. Therefore, to drive demand, there is urgency to better understand users aspirations and expectations, i.e. the cultural and socio-symbolic aspects of consumption that influence decision-making. This thesis argues that the perceived value of sustainable innovations can be enhanced by paying more attention to the elaboration of meanings or symbolic value they bring to bear for the user, which can be achieved by strategically framing innovations using high-value contextual signifiers (cultural codes). Drawing on cognitive science, cultural studies and applied semiotics, this research contributes a theoretical framework and case studies of how these theories can support the design process in mapping sociocultural contexts, in order to elaborate sustainable innovations that are perceived as aspirational and relevant. The theory is applied to the case of sustainable Product-Service Systems (PPS bottom-up social innovations) due to the opportunities these pose for systemic disruption, and the cultural barriers for adoption. Through a series of Participatory Action Research interventions, the investigation developed three case studies of how of the framework may benefit sustainable PSS value proposition framing and design, with one application in the context of design education to support the development of designers critical and sociocultural deconstruction capacity and skills. Finally, in exploring the potential that cultural codes offer to improve the design and value proposition of sustainable innovations, this thesis contributes and advances a new perspective for understanding symbolic aspects of consumption, and highlights opportunities for sustainable design to have greater influence in societal transformation.

abstract: Most advanced economies have evolved into service economies with the majority of their activity and jobs being in the service sector. The manufacturing sector is also going through a similar shift towards services. Manufacturers are increasingly complementing their products with new services in order to satisfy a broader array of customer needs and increase the value of their offerings. This shift has offered significant opportunities to the sector and the success of major firms such as IBM, Caterpillar, and Rolls-Royce in competing through services has been remarkable. Despite the increased importance of services in the manufacturing sector, the academic literature is yet to investigate the many questions that arise under this new manufacturing paradigm. Perhaps for the same reason study of servitization is listed as a research priority in recent publications both in the field of service operations management and in the field services marketing. This dissertation covers three essays aimed at disentangling multiple aspects of the role of services in the manufacturing sector. The literature on the drivers and implications of transition towards services in manufacturing firms is limited. The three studies in this dissertation aim at shedding light on this issue. Specifically, the first essay looks at the innovation benefits of service transactions with customers. This paper demonstrate the value of services in getting manufacturers closer to customers and allowing them glean useful information from their service interactions. The second essay investigates the antecedents of service strategy adoption. We suggest that the extant diversification theory does not fully explain servitization and this phenomenon represents a unique type of diversification, which is likely driven by different factors. Through econometric analysis of financial data over a 27-year period, this study explores characteristics of product, firm resources, competition, and industry that encourage adoption of service strategies in manufacturing sector. Finally, the third essay takes a deeper dive and focuses on dealerships, as service centers, in the automobile industry. It investigates the role of dealerships in the success of automakers and explores dealership traits that are critical for market success of an automobile brand. / Dissertation/Thesis / Doctoral Dissertation Business Administration 2018

Background: Service industries have grown extensively over the past few decades on the back of globalized business trends. With increasing competition, product firms are struggling on product sales alone. Hence, both products and services are being bundled into what is known as offerings. Moreover, firms are looking into how they can improve their offerings to meet customer needs with the help of smart products. Smart products are described as products able to communicate and interact with other electronic devices as well as being self aware. One of these examples is conditional monitoring whereby the product is houses built in sensors to communicate with a back end ERP system providing the supplier a transparent view and real-time update into the status and service needs for both the product and customer. Purpose: The aim of this thesis is to explore how smart products can help leverage services for product firms moving towards a service focus. Method: In addressing the purpose a case study strategy was applied. An inductive approach was used, and interviews were conducted with two Swedish manufacturers, SKF and Atlas Copco. SAP, a software provider was also interviewed. Lastly, a qualitative approach was used and secondary data was collected through annual reports, as well as public company information. Conclusions: Smart products show the capability of being able to record, transmit and act upon their behavior and usage. One major finding from the thesis is that smart products enable product firms to extend their service portfolios from a transactional to a relational standpoint through real time information feeds. This includes asset maintenance as well as monitoring and visibility into client operations. In addition, traditional product firms help product firm’s move towards a service strategy. Another finding of the thesis is that information visibility shows a positive co-relation with the service provider’s ability to take on more risk increasing service revenues and customer lock in and increase value co-creation. On the other hand smart products show to be challenging to product firms new to service development. These challenges include increasing initial infrastructure costs and high level of maintenance and complexity of the smart products.

In recent years, the consumption of clothes has increased extensively due to diminishing quality and low prices of garments along with ever-faster changing fashion trends. The linear business model results in products with a short lifespan and clutter of idle goods. With the growing awareness of environmental and social impact among the consumers; alternative business models (rental/lease, swap, resale) designed to intensify the utilization of clothes and enable sharing activities and collaborative consumption are emerging. However, the market share of these models is still low. This study aims to understand what are the barriers that hurdle; motivations that drive consumers’ adoption to collaborative fashion consumption; and how companies create and configure values to encourage consumers to partake in these innovative business models. Through a systematic literature review of 41 peer-reviewed articles, we found that the drivers for consumers towards collaborative consumption models are steered by economic factors, emotional factors, social factors, and sustainability values. While consumer barriers are namely, financial risk, arrangement, performance risk, social risk, psychological risk/lack of ownership, and lack of trust and information. It was also discovered that the collaborative fashion consumption models, in particular, rental/lease, swap, and resale are different in nature. Finally, we analyzed the existing literature and identified how companies can create, configure and capture values in these business models. This study is one of the very few to explore the interrelationship of the consumer-related drivers and barriers and business perspective. This paper can contribute relevant knowledge to academia as well as to the fashion industry.

This thesis explores the conditions under which traditional Small and Medium Enterprises (SMEs) can be involved in the design of sustainable Product Service Systems (PSS). The integration between design and Information and Communication Technologies (ICT) in the context of sustainable business development was used to define the space for this exploration. The research was carried out through a case study with a group of Colombian Manufacturing SMEs. As a result of the case study a business framework was developed to guide the design of sustainable PSS. In order to establish the basis of the research a review of the literature on sustainable business development, ICT, design, product service systems and SMEs was carried out. This review brought to light the main features of a sustainable PSS and the challenges associated with its design. These challenges were further investigated in the context of SMEs with a scoping study involving a group of 38 Colombian SMEs. Additionally, 36 PSS already on the market were analysed to identify the possible relationships between design and ICT, and to determine how they could contribute to develop sustainable PSS. The scoping study and the analysis of the 36 PSS gave structure to the case study with a second group of Colombian Manufacturing SMEs. This case study aimed to build understanding of the connection between the characteristics of these SMEs and the main features of a sustainable PSS. As a result of this case study a set of concepts, drivers and barriers to take into account to design sustainable PSS formed the basis of a business framework developed and validated in the final part of the research. The business framework proposed can help to understand the resources and changes needed to develop a sustainable PSS, reducing the uncertainty that it may cause. The integration between product and service design and ICT is used in the framework to outline the areas of opportunity in the design of sustainable PSS. This business framework developed as a result of the research promises to be a helpful tool for organisations working to support the transformation of SMEs toward competitive and sustainable business models using as a basis the integration between product and service design and ICT. Despite the Colombian context the results and outcomes of this research are described in general terms to be applicable in other contexts around the world working with SMEs in the design of sustainable PSS.

There is an intersection of challenges where society’s social and ecological problems coincide with the industrial firm’s challenge to maintain profitability in a globalizing world. Products connect these challenges. The development of these products together with services (product-service systems) therefore provides a critical intervention point to address these challenges. This includes e.g. defining what the products and services are, how they will deliver value to users, and the business models that enable them to be realized, as well as how these can contribute to sustainable development of society. The overarching goal of this research is to contribute to sustainable development of society by better understanding how a strategic sustainable development perspective based on backcasting from basic principles for a sustainable society can be brought into and guide product-service system innovation. Interviews with industry professionals, workshops with both manufacturing companies and within student projects, and industrial cases studies, together with a review of literature and theoretical considerations, provide the methodological basis for this work. This thesis contributes to clarifying theoretical and practical possibilities and limitations for a strategic sustainable development perspective to guide product-service system innovation and provides a basis for the integration of these concepts. The findings indicate that the co-innovation of products and services in product-service systems can contribute to sustainable development of society both by supporting reduced material and energy use and by supporting improved life cycle management of materials. Further, a strategic sustainable development perspective can contribute to the refinement of existing tools and methods in product-service system innovation by providing an operational definition of sustainability articulated in the form of first-order principles that describe the boundary conditions for a sustainable society, and by providing guidelines for how to approach a vision of success inside those boundaries in a strategic way. In order to identify solutions that meet society’s pressing challenges, new solution spaces may need to be identified, and this can be enabled by a shift from product development with service as “add-ons” to their co-innovation in product-service systems. An initial approach for how this could be enabled through bringing together set-based approaches to design product-service systems with a strategic sustainable development perspective is presented.

Problem: Development of a firm’s offering is a vital weapon for competition. Obtaining knowledge on customer expectations and translating those into product development and superior service delivery is surrounded by prioritisation decisions. Industrial vending systems are proven to be a growing field in terms of deployments but have received little academic attention, especially regarding service quality perception to support customer-oriented innovation processes for suppliers, facilitating such decisions. Purpose: To identify key drivers of positive service quality perception and customer satisfaction as well as trust and commitment indicators for business-to-business industrial vending systems. Method: Through an explanatory approach, qualitative data on multiple cases was gathered. 14 in-depth semi-structured interviews were held with customers currently using a specific industrial vending system. Conclusion: Solution characteristics of industrial vending systems impact service quality perception through compliance with customer requirements. A total of 13 customer satisfaction drivers were identified for the investigated industrial vending system, the most important being efficiency, user-friendliness and timeliness. Further, the presence of individual- and company level trust in customer-supplier relationships positively impacts commitment intentions. Contribution: Adds novel knowledge on customer satisfaction for industrial vending systems and contributes with suggestions for managers on how trust and commitment affect customer satisfaction, which can be incorporated into the value promise design, product development and marketing strategies. / ISNET (finansierad av KK-stiftelsen)

Purpose – The purpose of this study is to increase knowledge regarding sustainable product-service systems (SPSS) barriers and solutions for non-assembled products. To answer this purpose, we developed the following research questions: (1) what barriers do providers face when utilizing SPSS in a non-assembled product context and (2) what solutions can be used to overcome these barriers? Method – This study was conducted as an abductive case study within SPSS in the renewable energy industry. We interviewed a total of 20 respondents from 16 different companies operating in China, Cyprus, and Sweden. Each respondent was chosen based on their experience and knowledge within the area. Findings – The findings are summarized in a framework that links the identified barriers with specific solutions. In brief, finding stakeholders for large and long-term investments was identified as a major barrier while educating stakeholders was suggested as a common solution. Theoretical and practical implications – The results disqualify two of the barriers in the existing literature while suggesting that varying market conditions is a new barrier. Furthermore, the study provides new insights to the existing literature and presents a framework that managers can use to matchmake SPSS-barriers with solutions. Limitations and future research – The study is limited to a case study focused on barriers and solutions for SPSS-providers. As a result, future research is suggested to validate the findings in another context and among other stakeholders.