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Solution business models based on functional modularity – the case of complex capital goods

Magnus Hellström (Laboratory of Industrial Management, Åbo Akademi University, Turku, Finland)

Journal of Service Management

ISSN: 1757-5818

Article publication date: 14 October 2014

969

Abstract

Purpose

The purpose of the paper is to outline a business model for product system solutions that is based on functional modularity.

Design/methodology/approach

The paper employs an illustrative case study design. The cases constitute two action research projects in two organisations delivering complex product systems.

Findings

The paper illustrates the viability of a movement towards a solution business model based on the use of modular networks and integrated sub-supplies for complex product systems. It develops the idea of suppliers assuming responsibility for larger functional wholes in the delivery of large capital goods.

Research limitations/implications

Future research should strive to further validate and falsify the proposed model, and for other product systems too, with a particular focus on their operational phases.

Practical implications

The paper outlines a business model based on modularity for both main suppliers and sub-suppliers that wish to extend their scope of delivery and to share responsibility with their networks.

Originality/value

The proposed model is in considerable contrast to conventional models in which the main supplier typically assumes most of the responsibility itself.

Keywords

Acknowledgements

Funding from FIMECC Ltd.'s (Finnish Metals and Engineering Competence Cluster) Innovation & Networks (I&N) programme is gratefully acknowledged. Part of the empirical data was originally collected and analysed in connection to the DENSY programme, funded by the Finnish National Agency of Technology (Tekes). The author also wish to thank the guest editors of this Special Issue and the two anonymous reviewers for their helpful and encouraging comments that certainly improved the quality of the paper. As always, all the remaining mistakes are the authors own.

Citation

Hellström, M. (2014), "Solution business models based on functional modularity – the case of complex capital goods", Journal of Service Management, Vol. 25 No. 5, pp. 654-676. https://doi.org/10.1108/JOSM-07-2013-0198

Publisher

:

Emerald Group Publishing Limited

Copyright © 2014, Emerald Group Publishing Limited

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