PSS Strategic Alignment: Linking Service Transition Strategy with PSS Business Model

Abstract

One of the most promising business models towards economic circularity is product-service system (PSS). Despite its great potential benefits, shifting the traditional business model of a manufacturer into PSS business model commonly refers to service transition and triggers inconsistencies between strategic direction and organization arrangement at an operational level. The absence of alignment between the service transition strategy and the PSS business model is greatly emphasized as a crucial enabler, risk factor and key success factor of the service transition. However, limited academic works have concretely contributed to the strategic alignment. Through a systematic literature review, this paper proposes a PSS business alignment that enables the manufacturer to identify the strategic objective of its service transition strategy and align it with PSS business model. The theoretical version of the proposed framework is redefined and redeveloped through two cycles of action research involving 11 Japanese companies.