The three value proposition cycles of equipment-based service

Abstract

This paper contributes to the emerging discipline of service science through an investigation of value and value in use in an empirical setting. The starting point for our research is that service science is an interdisciplinary approach to the study, design, and implementation of service systems, a service system being considered a dynamic configuration of resources (people, technology, organisations and shared information) that create and deliver value between the provider and the customer through service (IfM & IBM, 2008). This paper investigates value delivery in equipment based service. The research addresses the questions of where and how value is delivered in the producer system when value is considered as endogenous. Our qualitative findings show three cycles of value delivery in equipment based service; the Recovery Value Cycle, the Availability Value Cycle and the Outcome Value Cycle. In so doing, showing that when value is considered as endogenous to the providers delivery system, the firm has to operate in such a way to absorb customer variety – in use and in desired outcomes.