Evaluating the Design of Service-Dominant Business Models: A Qualitative Method

Background: Driven by factors such as digitization and rapid technological change, many contemporary organizations adopt a service orientation to sustain competitiveness and to improve their value propositions to customers. In doing so, organizations typically engage in collaborative service ecosystems to co-create value and exchange services, and conceptualize such collaborations using business models. The resulting models should be evaluated to support the development of service ecosystems and their long-term viability. Despite academic efforts on the evaluation of traditional, organization-centric business models, limited research is present supporting the evaluation of service-dominant business models, taking into account their key characteristics, such as service exchange and value co-creation in business networks.

Methods: Following a design science research methodology, we have iteratively designed a method addressing the qualitative evaluation of service-dominant business models, building on and integrating the theory on service-dominant logic, business model design and business model evaluation. To structure the steps of the design process, we leverage a situational method engineering approach, following a paradigm-based strategy. To evaluate the validity and utility our method, we have applied it to a real-life business case in the mobility domain, involving eight industry stakeholders in the process.

Results: The method constitutes a set of guiding questions and a procedural description of their use, addressing the evaluation concerns of feasibility, viability, structural validity and robustness with respect to the service-dominant business model. The results of the evaluation demonstrate that the use of the method facilitates users to reflect qualitatively on design decision with respect the business model design and offers insights on its expected performance.

Conclusions: This work contributes to extant research on service system engineering and the instantiation of service-dominant logic, clarifying how service ecosystems can be evaluated through the business model concept and explicating how business models are influenced through service-dominant logic.