Short answer
Design products for longevity, modularity, and ease of service to support a 'product as a service' business model.
- Field
- Innovation & Markets
- Source
- Sustainability (2020)
- Method
- Conceptual and Case Study
- Evidence
- Moderate effect
Shifting from product ownership to service provision, particularly with smart, connected products, allows businesses to manage resources more effectively and adapt to market changes, leading to growth. This innovation & markets research insight is drawn from a 2020 study published in Sustainability. Using Conceptual and case study, researchers explored how this design variable affects real-world outcomes. The key design takeaway: Design products for longevity, modularity, and ease of service to support a 'product as a service' business model.
Product-as-a-Service models increase market competitiveness through resource efficiency
Shifting from product ownership to service provision, particularly with smart, connected products, allows businesses to manage resources more effectively and adapt to market changes, leading to growth.
Sustainability · 2020
Key Findings
- 01The 'product as a service' model is an innovative business model for the circular economy.
- 02Smart connected products (IoT, 5G) enable effective implementation of product-as-a-service.
- 03Key factors for success include cost, convenience, and circular economy benefits for firms, consumers, and the environment.
Application
Design takeaway
Design products for longevity, modularity, and ease of service to support a 'product as a service' business model.
How to apply
Consider offering a subscription or leasing option for a product instead of outright sale, focusing on the value of the service provided.
Project actions
- 01Explore how a product could be offered as a service (e.g., a smart home device on a subscription).
- 02Research the environmental and economic benefits of service-based models compared to traditional sales.
Method & Evidence
Variables
Strengths & Limitations
Strengths
- +Highlights the strategic advantage of service-based business models.
- +Connects technological innovation with economic and environmental benefits.
Limitations
The complexity of managing logistics, maintenance, and customer relationships for a service-based model can be significant.
Reliability & validity
The conceptual nature and single case study limit generalizability, suggesting moderate reliability for broader application without further research across diverse contexts.
Think critically
What are the potential drawbacks or challenges for a small business trying to implement a 'product as a service' model compared to a large corporation like Hyundai?
Design Principles
"Design for serviceability and lifecycle management."
This approach redefines value creation, moving beyond traditional sales to ongoing customer relationships and lifecycle management. It directly addresses resource scarcity and environmental concerns, aligning with global sustainability trends and offering new avenues for market penetration and customer loyalty.
What This Means for Your Design
Instead of selling a product, you rent it out and provide a service for it. This is good for the environment because the product is used more and doesn't get thrown away as quickly, and it can be profitable for the company.
How to use in your project
- 1.Use as a justification for choosing a service-based design approach over a traditional product sale.
- 2.Incorporate into the analysis of market trends and potential business models for a proposed product.
Add to My Project
Quick Cite
Paragraph starter
The 'product as a service' model, as explored in the context of the circular economy, offers a compelling alternative to traditional product sales. By shifting the focus from ownership to access and service, businesses can enhance resource efficiency, reduce waste, and foster customer loyalty. This innovative approach is particularly enabled by advancements in smart technologies, allowing for better product monitoring, maintenance, and lifecycle management, ultimately contributing to both economic viability and environmental sustainability.
Source
Sustainability
Circular Economy Business Models with a Focus on Servitization
journal · 2020
View sourceQuestions About This Research
- What does the research say about product-as-a-service models increase market competitiveness through resource efficiency?
- Design products for longevity, modularity, and ease of service to support a 'product as a service' business model. Evidence: Sustainability (2020).
- Why does "Product-as-a-Service models increase market competitiveness through resource efficiency" matter for design?
- This approach redefines value creation, moving beyond traditional sales to ongoing customer relationships and lifecycle management. It directly addresses resource scarcity and environmental concerns, aligning with global sustainability trends and offering new avenues for market penetration and customer loyalty.
- How can designers apply this research?
- Design products for longevity, modularity, and ease of service to support a 'product as a service' business model.
- What were the main findings?
- The 'product as a service' model is an innovative business model for the circular economy.. Smart connected products (IoT, 5G) enable effective implementation of product-as-a-service.. Key factors for success include cost, convenience, and circular economy benefits for firms, consumers, and the environment.
- What research method was used?
- Conceptual and Case Study.
- How strong is the evidence?
- Evidence strength is rated Moderate effect, based on a 2020 journal from Sustainability.
- What should I do differently in my next project?
- Consider offering a subscription or leasing option for a product instead of outright sale, focusing on the value of the service provided.
- What are the limitations?
- The study's findings are primarily based on a conceptual framework and a single case study, which may limit generalizability to other industries or contexts.