Service science: An analysis of the business system of product service companies

Abstract

The need of businesses that combine products with service has begun to be recognized recently. However, there exist few studies on such businesses, and none that propose corporate strategy for them. Most of the existing service science literature deals with the classification of business types and the methods to evaluate value. This paper explores the product service system with an uncertainty factor and analyzes a case study of the care bed business, expanding rapidly as a result of the growing elderly population in Japan. We also examine the organizational structure of product service companies and offer policy suggestions for managing such companies. The paper concludes with the suggestion that these companies need to integrate and coordinate different activities in the vertical integration value chain, eliminating the uncertainty factor, to maximize performance and efficiency.