The themes of technological innovation, entrepreneurship, and organizing
Success Factors for the Introduction of PSS
General barriers and design features for the introduction ofPSS are discussed in literature (Baines et al., 2007, Manzini & Velozzi, 2002). For instance, the need of incorporating a multi-stakeholder approach is highlighted, when introducing PSS (Pawar et al., 2009, Huiten et al., 2001, Mazini & Velozzi, 2002). Additionally, being sensitive to the cultural context can be regarded as one of the key success factors for the integration of PSSs (Wong,
2004) . By integrating local and international NGOs in the development of its offering, OSRAM pursued this notion fairly well. However, arguably, OSRAM failed to fully integrate its customer into the development process. One ofthe reasons, why the solution is not adopted by the local population in Kenya so far, can be traced back to its pricing system: OSRAM charges deposit fees to be able to use the system. However, those deposit fees are considerably high, thereby impeding most of the potential customers from purchasing the service. Additionally, the income of local fishermen is highly volatile and thus their need for electricity is equally varying. However, OSRAM’s offer is rather inflexible, as only fully charged batteries are lent at full cost which does not correspond with the fluctuation of local demand for off-grid lighting. This invalidates the general flexibility benefit of the PSS which would allow for a better adjustment to customer needs (Cook et al. 2006).
Ultimately, OSRAM’s PSS is not fully suited to the needs and usage patterns of its target group and, hence, could not fully unveil its sustainability potentials. This emphasizes the importance of integrating customers into the development of PSS as early as possible (Hansen et al., 2009, Manzini et al., 2001, Huiten et al., 2001). The case may further stress the requirement of new methodologies for the design and development of user-tailored PSS (Morelli, 2002, Baines et al., 2007, Manzini & Velozzi, 2002). Further research should look at processes of open innovation and customer integration (e. g. Halila & Horte, 2006; von Hippel, 1988) in order to build more successful PSS.
This chapter emphasized the role of innovation for addressing sustainability as well as the role of sustainability as a source for innovation. Product-
Service System (PSS) represents an important approach for both perspectives. However, as PSSs are combinations of products and services and, as they go beyond product ownership, multiple new hurdles and opportunities emerge. The presented case study showed an example of simultaneous product and PSS innovations and revealed how to assess the various sustainability effects on both levels. Beyond established effects of PSS of saving materials due to fewer products in the market (as the same product is used more often by various customers) the PSS could also be a beneficial innovation strategy for introducing new products/technologies in the market. Future research should emphasize this role of PSS in market entry strategies also in developed nations.
We thank Prof. Stefan Schaltegger, head of the Centre for Sustainability Management (CSM), for providing us with valuable feedback. Furthermore, we thank one unknown reviewer for his/ her constructive suggestions.
