From service for free to service for fee: business model innovation in manufacturing firms

Abstract

Purpose

The purpose of the present research is to identify how business model innovation can be used to make the transition from service for free to service for fee. In particular, the focus is on identifying, describing and analysing alternative transition strategies, degree and type of innovation, and how building blocks in the business model change.

Design/methodology/approach

A multiple case study of six manufacturing firms was performed. Data were collected through interviews with CEOs, service managers and sales managers. In addition, two workshops were performed with the participating firms.

Findings

The present research identified eight strategies for transitioning from service for free to service for fee. These strategies represent change in the business model, incremental business model innovation and radical business model innovation. It is suggested to change the content and structure to perform incremental business model innovation and change the governance to perform radical business model innovation.

Originality/value

In most models for service infusion, the change of business model is seen as a necessary step and focus is placed on that a change of business model is needed. The present study elaborates on what approaches manufacturing firms use to make the change from one business model to another.

Citation

Witell, L. and Löfgren, M. (2013), "From service for free to service for fee: business model innovation in manufacturing firms", Journal of Service Management, Vol. 24 No. 5, pp. 520-533. https://doi.org/10.1108/JOSM-04-2013-0103