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What Is a Product-Service System

In: Business and Management

Submitted By michaelzpc
Words 2821
Pages 12
Semester 1, 2012

Week 9: Innovation II Product Innovation

Dr Gary Buttriss

9.1 What is a product-service system? What may be the impact on its own sustainability of a corporation currently providing products moving towards a product-service system? (See especially reading 9.1.) Answer • What is a product-service system • “A marketable set of products and services capable of jointly fulfilling a user‟s need. The product/service ratio in this set can vary, either in terms of function fulfillment or economic value. (p.238) • Also a system of products, services, supporting networks and infrastructure designed to be competitive, satisfy customer needs and have a lower environmental impact than traditional business models (p. 239) • Impacts on sustainability of a corporation • Drivers: Can provide access to new strategic markets opportunities, market trends and developments and potentially stay competitive as patterns of production and consumption are transformed. • Barriers: Fundamental cultural shifts are required. Markets and products may be hard to develop, consumers may resist.

MGMT2001 - Corporate Sustainability

2

Context and Characteristics
• Blurring of manufacturing and service: The role of services in providing value is ever more important. Added value is created by technological improvments, intellectual property, product image and brand names, aesthetic design and styling that differentiate and diversify products. Functional economy: Function is the key to customer‟s satisfaction – not products per se. Strategic design: a new approach for businesses in a turbulent market.

• •

MGMT2001 - Corporate Sustainability

3

Benefits for companies - Generally
• • • • • See strategic new market opportunities, trends and developments. Stay competitive and patterns of production and consumption are transformed by environmental...

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