The importance of value in services business models
In the context of business model, the most prevalent component is related to the concept of value (Zott et al., 2011). However, a company cannot create value on its own; value is co-created through exchange (Gray and Vander Wal, 2014). Companies can only develop offering(s) – value proposition – but their customers must accept, implement, and use it in order to create value.
Value co-creation requires a relationship, and products on their own play a key role (perhaps as the foundation), but they cannot have relationships. Hence, services become the essence of value co-creation. Services in general, and advanced services in particular, cannot be designed and manufactured in isolation like products.
They are co-created with customers and are interdependent with wider service networks. The role of customers and the ways in which they do business, therefore, becomes essential. Understanding customers’ pains and gains, and the extent to which the service offering can address them is an inevitable element of service development.
Join me at the Advanced Services Global Forum on 26th April at Aston Business School to learn more about how to design a business model around advanced services.