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Organizational capabilities for pay-per-use services in product-oriented companies

: Gebauer, Heiko; Saul, Caroline Jennings; Haldimann, Mirella; Gustafsson, Anders


International Journal of Production Economics 192 (2017), S.157-168
ISSN: 0925-5273
Fraunhofer IMW ()
pay-per-use service; capability; business model innovation; financing; knowledge-based view of the firm; product usage

Pay-per-use services are an interesting phenomenon, both empirically and theoretically. Despite the alleged benefits, companies still struggle to succeed with pay-per-use services. Theoretically, it is common sense that existing service capabilities cannot easily be converted into organizational capabilities for pay-per-use services. Based on multiple case studies, the present article narrows down the existing empirical and theoretical gaps through an inductive research approach. Our findings make the following contributions to the field of services in product-oriented companies and to the servitization literature. We describe the organizational capabilities necessary for pay-per-use services (e.g., financing such services, aligning costs with equipment usage, and collaborating with custom ers). We reveal that companies should convert these capabilities into three core competencies (strategizing pay-per-use services, utilizing technologies for pay-per-use services, and de-risking pay-per-use services), in order to achieve competitive advantages.