Business Models for Sustainable Product-Service-Systems

Thesis (MA/Guided Research)

Advisor(s): Timo Böttcher

Context

In today's world, everything is connected. Physical products are equipped with sensors, computers, and actuators that collect data and allowing to control or alternate the products’ behavior. This connectivity opens up a world of possibilities for firms to create digital services that extend the value of the product itself. For example, Hewlett Packard offers a digital subscription service analyzing the level of your printer ink and the number of printed pages to automatically send new ink when needed. Such bundles of connected physical products and digital services are called product-service-systems (PSS). Often the digital service creates a new business model opportunity, for example the subscription for printer ink, in addition to the business model of the physical product.

However, if the physical product has little value, the digital service business model becomes a core element of the entire PSS. This is the case for example for sensors. The sensor itself only collects data. The data itself has little to no value. Instead, the value is created when the collected data is processed and analyzed to create digital services. The resulting data-driven business model of this service needs to create, capture, and deliver value including or justifying the cost of the sensors.

Many of such sensor-based PSS are used by firms to optimize efficiency. In need of rapid increase of sustainable operations, these PSS are also used to analyze and optimize the sustainability, for example of production or logistics. In the literature, there is a growing body on the topic of data-driven business models for sustainable PSS. For example, Vezzoli et al. (2014) provide a framework for the analysis and design of business models for digital sustainability services. Additionally, Tukker (2004) discusses the potential for data-driven PSS to create value for customers and firms. These studies suggest that data-driven business models have the potential to enable new value creation opportunities for firms by allowing them to extend the value of their physical products through the creation of PSS.

However, firms still struggle with the design of such a data-driven business model. While general consulting approaches exist on how to design business models (Gassmann, Frankenberger, & Csik, 2014), and research supports the design with several forms of business model patterns (Weking, Stöcker, Kowalkiewicz, Böhm, & Krcmar, 2020), recent research shows that business model design depends on both internal and external factors (Böttcher, Weking, Hein, Böhm, & Krcmar, 2022). Hence, the goal of the thesis is to combine the ecosystem perspective (external) (Riasanow, Jäntgen, Hermes, Böhm, & Krcmar, 2020) and the business model design perspective (internal) to identify business model design patterns and value creation opportunities for digital sustainability services in PSS.

Potential research questions are listed below. Other research questions to be pursued in the thesis can be suggested and discussed:

  • How can digital services be monetized across multiple actors in complex data ecosystems?
  • How can data-driven business models scale across a complex ecosystem and what capabilities are needed to implement such business models?
  • What are benefits of decentralized data ecosystems and how can data be monetized in such decentral approaches?
  • How can data-driven services be used to improve the sustainability of product usage, diffusion, and investment decisions?
  • How can digital services create spill-over effects on cross-selling of digital and physical products?

Task(s)

These are general tasks that we will adapt together to the specific research questions:

  • Conduct a literature review on PSS, data-driven business models, and/or data-driven sustainability
  • Create an ecosystem model for digital service providers by identifying relevant actors, classify these actors, and identify inter-actor value exchanges
  • Develop a business model taxonomy of digital services for sustainability
  • Derive design recommendations for the business model design of a digital sustainability service

Requirements

  • Interest in current topics of data-driven business models, PSS, and sustainability
  • High degree of autonomy and individual responsibility
  • Experience in and willingness to conduct scientific studies
  • Structured, reliable and self-motivated work style

Further Information

The topic can be adopted according to your interests. The thesis can be written in English or German. If you have any further questions, do not hesitate to contact me directly.

Please send your application including our application form, "Notenauszug" from TUMonline, and CV to timo.boettcher@tum.de. Please note that we can only consider applications with complete documents.

References

Böttcher, T. P., Weking, J., Hein, A., Böhm, M., & Krcmar, H. (2022). Pathways to digital business models: The connection of sensing and seizing in business model innovation. The Journal of Strategic Information Systems, 31(4), 101742. doi:https://doi.org/10.1016/j.jsis.2022.101742

Gassmann, O., Frankenberger, K., & Csik, M. (2014). The Business Model Navigator: 55 Models That Will Revolutionise Your Business (Vol. 1). Harlow: Pearson.

Riasanow, T., Jäntgen, L., Hermes, S., Böhm, M., & Krcmar, H. (2020). Core, intertwined, and ecosystem-specific clusters in platform ecosystems: analyzing similarities in the digital transformation of the automotive, blockchain, financial, insurance and IIoT industry. Electronic Markets, 31(1), 89-104. doi:10.1007/s12525-020-00407-6

Tukker, A. (2004). Eight types of product–service system: eight ways to sustainability? Experiences from SusProNet. Business Strategy and the Environment, 13(4), 246-260.

Vezzoli, C., Kohtala, C., Srinivasan, A., Diehl, J. C., Fusakul, S., Liu, X., & Sateesh, D. (2014). Product-Service System Design for Sustainability.

Weking, J., Stöcker, M., Kowalkiewicz, M., Böhm, M., & Krcmar, H. (2020). Leveraging industry 4.0 – A business model pattern framework. International Journal of Production Economics, 225(July 2020), 107588. doi:10.1016/j.ijpe.2019.107588