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Article

The Use of Business Model Canvas in the Design and Classification of Product-Service Systems Design Methods

by
Mariusz Salwin
1,*,
Ilona Jacyna-Gołda
1,
Andrzej Kraslawski
2 and
Aneta Ewa Waszkiewicz
3
1
The Institute of Organization of Production Systems, Faculty of Mechanical and Industrial Engineering, Warsaw University of Technology, 85 Narbutta Street, 02-524 Warsaw, Poland
2
Industrial Engineering and Management, School of Engineering Science, Lappeenranta University of Technology, P.O. Box 20, FI-53581 Lappeenranta, Finland
3
Department of International Finance, SGH Warsaw School of Economics, 02-554 Warsaw, Poland
*
Author to whom correspondence should be addressed.
Sustainability 2022, 14(7), 4283; https://doi.org/10.3390/su14074283
Submission received: 10 February 2022 / Revised: 23 March 2022 / Accepted: 28 March 2022 / Published: 4 April 2022
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Abstract

:
The implementation of Product-Service Systems (PSS) calls for the modification of existing business models. The goal of the paper is to work out an analysis and a classification of PSS design methods used in the development of new business models. Using a systematic review method, we identified 60 PSS design methods. Following the examination of the major business model templates, we selected the Business Canvas Model for further studies. Then, coding rules were adopted to specify what elements of the Business Model Canvas impacts individual PSS design methods and an analysis was performed. In the final stage, methods were broken down by Business Model Canvas domains. Various PSS design methods presented in the literature address different areas of Business Model Canvas. The available PPS methods can be classified into three main groups: Group 1—including infrastructure and offering; Group 2—including infrastructure, offering and customers; and Group 3—including infrastructure, offering, customers and finance. Very few methods consider areas such as Key Partners, Customer Segments, Cost Structure and Revenue Streams. Nevertheless, there is no PPS design method that would address all of Business Model Canvas building blocks. The paper discusses PSS design in business model context. Classification of PSS design methods was proposed together with new possibilities to develop business models based on this classification. The proposed approach illustrates the combination of PSS design methods applied in food processing and agricultural machines industry.

1. Introduction

Nowadays, the market experiences fierce global competition, saturation, and commoditization of the main product markets [1,2,3,4], which negatively impacts the sales of products and business profits [5,6,7]. In addition, customer needs change very quickly while their expectations become increasingly more complex and difficult to be met by products alone [5,6,7,8]. More and more often, customers are interested in product availability, the possibilities it offers and the effects that it produces rather than in the product itself, its purchase or just having it [9,10,11,12]. These factors make companies look for new ways of doing business [13,14]. They are also key driving forces behind the development of PSS business models [15,16]. Seen from this angle, the PSS concept is an alternative for manufacturing companies wishing to introduce innovations, achieve competitive advantages and improve financial performance as, in addition to selling goods, it includes auxiliary services designed to meet customer needs [13,17]. The concept shows how business models have evolved from their traditional form into PSS-based models [17].
An innovative concept, such as the PSS, is receiving increasingly more interest from researchers and practitioners. Benefits triggered by PSS are obvious, and the major ones include better financial performance and environmental benefits [6,17,18]. In literature, the PSS has been investigated from different perspectives, e.g., benefits (Baines et al., 2007), sustainable development aspects [6,19], barriers to its implementation [20,21], PSS modularization [22,23] and PSS design [24,25,26]. PSS design is a new huge challenge to manufacturing companies [27,28]. In this approach, we can see how the perception of products and technologies evolves, often leading to new ways of using them in different stages of their lifecycle. It links with the reorganization of company structure and founding it on new values [29,30]. As a result, the business model of an enterprise is adapted to fully exploit PSS-linked benefits [31].
Relationships between the business model of a company and PSS design have not been widely discussed in the literature [32]. A business model can be defined as a simplified way of explaining how companies create value [33]. This is why they should participate and understand PSS design. In order to take full advantage of companies’ involvement in PSS development, we must examine the available design methods for business models. We are still missing comprehensive analytical assessments of individual design methods which would consider specific elements of the business model. Such analysis would greatly facilitate the replacement of a traditional business model with a PSS-based model and contribute to generating new PSS development paths.
To be able to fully use business models in PSS design we investigated literature and developed a classification of PSS design methods based on Business Model Canvas components and proposed combining them to generate new methods for new industries. The classification represents a different, unprecedented approach to PSS design methods, which incorporates the impact of PSS design on a company. Such an approach was not considered before and is a pioneer effort.
The paper is structured as follows: Its first section is an introduction, followed by a discussion of the research methodology. The third section presents the classification of PSS design methods based on the Business Model Canvas. The next section proposes universal PSS design stages. The fifth section of the paper considers how the proposed classification and universal stages can be used to develop new PSSs, and a case study is presented. The last section of the paper is a discussion.

2. Research Methodology

2.1. Research Aim

The goal of the paper is to examine and classify PSS design methods based on the Business Model Canvas and its adaptation to design new PSS for new industries.
The following research questions have been formulated in the paper:
  • Do PSS design methods available in literature impact all elements of Business Model Canvas?
  • Can we create new PSS models by combining methods already available in literature?
  • How can we create new PSS models for new industries based on the proposed classification?
The classification will also make suggestions as to how the existing methods should be supplemented, if the need arises, by three universal design stages. By investigating the effect of PSS design methods on the business model of a company, we hope to facilitate the development of comprehensive methods that would impact the whole of the Business Model Canvas in new industries.
On top of that, the paper offers other, unprecedented and innovative approaches to the analysis of the proposed PSS design methods.

2.2. Systematic Review

This paper uses a systematic review [34,35,36] to examine papers devoted to PSS design published over the period 2001–2021. The method was selected because it differs from traditional literature reviews by offering a scientific and transparent process which minimizes prejudice by conducting an exhaustive literature search [37].
The review took the form of structured keyword searches using terms such as “Product-Service Systems design” or its synonyms. We searched titles and keywords for the above terms to make a list of papers which directly address methods of PSS design. The following databases were used in literature sources: ProQues, Springler Link, Science Direct, Taylor & Francis Online, EBSCOhost, Scopus, Emerald, Insight, Web of Science, Ingenta, Wilma, IEEE Xplore Digital Library and Google Scholar. These bases include mainly scientific journals related to the subject in question and are excellent tools in searching for digital sources.
We managed to collect 400 works published in English (papers, chapters in books, conference materials and reports). A comprehensive analysis of texts helped in narrowing the selection down to 64 items, including research papers, conference papers, chapters in monographs and books, in which we found 60 PSS design methods.

2.3. Selection of Business Model Canvas

The next step in the research method consisted of the selection of Business Model Canvas. Implementation of PSS triggers business restructuring and proposing a new offer that combines products with ancillary services, which is indicative of the emergence of business models. In the context of PSS design, a business model specifies how a company works before and after PSS has been developed. By superimposing the Business Model Canvas on a given PSS design method, we can say which areas in a company are influenced by available methods, identify their strengths and weaknesses and elements that need to be optimized. The use of a business model helps in transparent classification of available design methods.
To find the best Business Model Canvas to be used for analyzing PSS design methods we started with detailed literature searches in scientific databases to identify business modelling methods. Our searches in this case were centered around the following keywords: business model, value proposition, enterprise architectures, value modeling, innovation and value chain. From among the works which we had read, in total, nine different business modelling methods were selected for the analysis.
Weill and Vitale’s approach is strongly linked with electronic services. It recognizes a business model at the level of networks incorporating e-business model schemes and the role of information technologies. In addition, the model addresses critical success factors for atomic e-business models [38]. Chesbrough seeks to ensure a framework which sequences available business models starting from the very basic (and little valuable) ones to much more advanced (and very valuable) ones. This approach is bound with technology-based innovation and target mature firms deeply rooted in the market. In addition, the approach includes a competitive strategy [39]. E3-value is an ontology of e-business model focused around the primary concept of economic value and demonstrates how economic value is generated, interpreted and exchanged in a multi-party (extended) network of companies and customers. E3-value specifies the components of an e-business model; in particular, it defines, derives and examines relationships between many companies, e-business scenarios and operational requirements at both qualitative and quantitative levels [40]. An entrepreneur’s business model is a framework of a business model which can be used independently of the type of a venture. It includes a strategic component while its unique element makes references to personal/investor factors of an entrepreneur. The authors look at a business model from the point of view of entrepreneurship and deal with areas such as strategy of ventures, architecture and economy [41]. Ballon’s approach is used to develop a business model for services, products and ICT systems. It is consistent with a multi-parameter approach applied to identify four levels at which business models operate and three critical design parameters at each level. They concern not just one company but a network of stakeholders engaged in manufacturing and delivering a particular product, service or system. Its intention is to go beyond a narrow scope observed in many traditional business models [42]. The STOF model is positioned as an approach to service innovation. The approach focuses on business models for services. It offers an understanding of critical design issues and success factors, which are relevant in a real sustainable business model. The STOF model views the definition of service in customer value proposition categories as a starting point for any business model. Service definition is a reference point for other areas. Technology is seen as central, as it is an important factor in increasing customer value from her/his perspective [43]. The Four-Box business model ensures a structure that helps in revealing and categorizing all company domains. It positions business rules, behavioral norms and success metrics among core processes and perceives them as links for business model areas which maintain the model in equilibrium. Thanks to it, the customer value proposition can be delivered in a repeatable and foreseeable manner, meeting the profit formula at the same time [44]. Business Model Canvas can be used to develop new or document the existing business models. By using it, the authors describe a business model to explain how an organization creates, delivers and presents value [45]. Business model roadmapping was developed based on subject-matter literature on business models and technology roadmapping. The advantages of such an approach consist of not only specifying an action plan and proposing changes to a business model but also in identifying and discussing compromises between strategic business model issues and operational activities. Business model roadmapping may help in identifying overlapping paths and points of no return [46].
After having examined business model frameworks (Table 1), we used the Business Model Canvas to classify the impact of PSS design on the business model of a company. Preliminary analyses have shown that this is the most adequate framework because:
  • It is a popular tool which helps practitioners in designing business models [47]. This practical tool rests on a detailed conceptual model which takes account of elements that describe company value, value proposition (offer), infrastructure, customers and finance [45].
  • Business Model Generation, the book which discusses Business Model Canvas and has published more than 100,000 copies, features in many rankings of best-selling business books. In addition to its 2 principal authors, 470 practitioners were engaged in writing it [48].
  • A total of 9291 Google Scholar citations and 3309 Research Gate citations confirm that Business Model Canvas is the most frequently quoted business model framework in the literature.
  • The model is also used by many companies and startups.
  • It is an intuitive model, easy to be discussed and simple in construction.
  • It is a highly flexible approach, which allows using it to describe business models in different industries.
  • It is used as a design tool for innovation.
  • The model shows how an organization creates, delivers and recognizes customer value.
  • It specifies the elements of a business model; in particular, it defines, identifies and analyses relationships between diverse domains of a company.
  • Its next advantage consists of the central location of value proposition. In this approach, an organization’s efforts focus on giving the customer what he really wants or needs, which is closely linked with the PSS and is crucial for it.
  • Current and future performance of a company can be easily compared.
  • It can be used by a team (employees and/or advisors) to understand the relationships and come to an agreement.
  • It provides a useful background for strategic adaptation of the main PSS elements and for allocating them to concrete domains of company operations to which they belong.
  • Canvas ensures a coherent approach and a common language for all PSS design methods. It explains relationships and impact on individual business domains within a company and thus helps in structuring and classifying them.
  • So far, the Business Model Canvas has not been applied in such analyses in PSS design.
The above presented arguments suggest that Business Model Canvas provides the best framework for a business model that can be used in PSS design. The model may help in exploring available methods and generating new PSSs. It can offer support to companies which so far have not used PSS in developing and implementing business models. Business Model Canvas shows how these activities impact individual domains of a company and eliminate or reduce emerging risk. Such an approach allows unveiling and classifying all of the issues one must face before available PSS design methods can be used in a company. This is why we decided to apply the Business Model Canvas to propose the classification of PSS design methods.

2.4. Coding Rules

After the available design methods have been examined and a business model framework has been selected, we encoded the available methods according to the following criteria:
  • Criterion No. 1—coding is based on the Business Model Canvas and stages of PSS design for methods available in literature. Our classification distinguishes between the presence or absence of a given design stage that takes account of or relates to a given building block in the Canvas model.
  • Criterion No. 2—coding is based on the number of Business Model Canvas domains, which consider design methods broken down into three main groups:
    ○
    Infrastructure + offering;
    ○
    Infrastructure + offering + customers;
    ○
    Infrastructure + offering + customers + finance.
  • Criterion No. 3—the third criterion distinguishes between available PSS design methods validated in practice and proposals made by researchers. In addition, we considered the industry to which they are addressed.

3. Canvas Classification

In order to classify the impact of PSS design methods on the business model of a company, we have deployed the Business Model Canvas as a tool. It is a visual chart with elements describing company value, value proposition (offering), infrastructure, customers and finances (Figure 1) [45].
PSS design often implies the change of a business model. It calls for a number of internal and external analyses and involves a huge challenge to entrepreneurs. When analyzing the PSS design methods in the context of the Business Model Canvas. we may realize that each method described in literature impacts three areas of a business model (Figure 1).

3.1. Group 1—IO (Infrastructure + Offering)

The first group is referred to as IO. Methods included in this group impact three building blocks of the business model pursued by a company that wants to apply them. These are: Key Activities, Value Proposition and Key resources (Figure 2).
The IO group covers only a fraction of the Business Model Canvas and includes the least comprehensive methods. Their application in the business practice may involve a lot of risk to a company. Before using them in industrial practice, the methods should be fine-tuned to clearly consider all areas of the Business Model Canvas.
This group includes eight PSS design methods (Table 2). Seven of them have been validated in practice, and one is a researchers’ proposal. Four of the methods in this group are not dedicated to any specific industry. The remaining four have been developed with specific sectors and industries in mind.

3.2. Group 2—IOC (Infrastructure + Offering + Customers)

The second proposed group is the one designated with the IOC (Infrastructure + offering + customers) acronym (Figure 3). Methods within this group represent a wider spectrum of impact on the business model of a company because they also highlight areas connected with customers (Customer Relationships, Channels, Customer Segments). The 33 methods allocated to this group cover in total 7 elements of the business model (Table 3). Yet, when singled out and considered separately, none of them covers all of these seven elements.
This group consists of 33 PSS design methods. Seventeen out of them have been validated in practice, while the validation of one method is still pending. Fifteen methods are researchers’ proposals. Eight methods in this group are not intended for a concrete industry.

3.3. Group 3—IOCF (Infrastructure + Offering + Customers + Finance)

The third group we propose is IOCF (Infrastructure + offering + customers + finance) (Figure 4). Methods assigned to this group impact each of the four main building blocks of the business model. IOCF considers methods, which cover areas such as Cost structure and Revenue streams. Altogether, the 19 methods in this group cover 9 elements of the business model (Table 4). However, none of these methods taken separately covers all of the nine elements. Methods from this group outline the major financial effects of putting the PSS solution in place and ways, in which a company generates revenue from PSS-based operations. These areas are missing in each method included in Groups 1 and 2.
The third group consists of 19 PSS design methods. Out of the total pool, 9 methods have been validated in practice. A further 10 methods are researchers’ proposals. Each method within this group is industry-specific.

4. Universal Product-Service System Design Stage

The classification demonstrates that design methods available in literature take very little account of Key Partners, Customer Segments, Cost Structure, and Revenue Streams (Figure 5). Having examined the PSS development models, we would like to propose three completely new, universal stages which help in developing new, interdisciplinary business models based on PSS.

4.1. Key Partners Stage

The first stage concerning Key Partners should be the initial one creating opportunities to diagnose and select key partners critical for PSS development. In most cases, we can think of banks, suppliers of machinery and materials for production, IT system providers or universities. These are just examples that are worth considering. On top of that, at this stage, we should find answers to the following questions:
  • What partnerships are critical for a new PSS?
  • Who are our critical suppliers in a new PSS?
  • Which of our suppliers and partners receive our critical resources in a new PSS?
  • What kind of partnership meets our needs in a new PSS?
  • What supply chain is the best for a new PSS?
This stage introduces order in the design method and introduces partners crucial for the development of a new PSS.

4.2. Customer Segmentation Stage

The second stage is about Customer Segmentation. In this stage, potential customers of the PSS solution are broken down into groups based on their needs and expectations. This is the stage when the core of the PSS solution is developed with the product and services that accompany it; the solution will be further divided and addressed to different customer groups. The stage helps in visualizing and configuring all of possible PSS targeting concrete market segments. In this stage, the company must provide answers to the following questions:
  • Who are our customers?
  • What is the development potential of our customers?
  • Which customers, or potential customers, of a new PSS are worth receiving most of our time and attention?
  • Why do customers come to use a new PSS?
So far, very few methods offered such possibilities and customers who decided to use a PSS solution have different preferences. For instance, let us take a PSS solution for a vacuum cleaner. Methods available in literature help develop a general PSS solution for a vacuum cleaner, yet we cannot divide it to target diverse market segments, such as, e.g., households, interior design companies or cleaning companies. The stage is intended to assist in diagnosing the customer segments and needs within each segment. We need this stage because, e.g., households have different needs than interior design companies, which, in turn, have different needs than the cleaning companies.

4.3. Financial Analysis

The third stage is devoted to building up a financial model that would take account of costs involved in the development of a PSS solution for a company and estimate revenue streams. This stage may also include valuation of services dedicated to the product within the framework of a PSS model. It is an excellent tool that allows presenting concrete data on future financial results and comparing them with incurred costs. If we add on appropriate variables, for instance, remuneration rates, cost of services or subscription fees, service valuation levels, assumptions about possible failures, maintenance or demurrage periods, we will be able to develop and prepare for PSS design. In this stage, we need to answer the following questions:
  • What will companies be making money on in a new PSS?
  • What are the costs of a new PSS?
  • How can we value services added to the product in a new PSS?
This stage will help in evaluating the profitability of PSS-based solutions and in proposing different price combinations.
The proposed universal stages of PSS design may be applied mainly in methods from Group 3, which have only minor shortcomings regarding elements of the Business Model Canvas. By adding one of the above-mentioned stages, we will make these methods complete are ready to use.

5. How Can the Proposed Classification Be Used in Developing a New Business Model

The combination of different methods may lead to the development of new, sophisticated and innovative solutions addressed to areas that were not considered before.
In order to show how a new interdisciplinary model is built based on the proposed classification, we used the HICS method [63,64] and the method developed by [84] and added the universal stage devoted to financial analysis (Table 5). These methods have been selected for the following reasons:
  • In the available literature, there are no PSS design methods that would target animal feed industry;
  • Taken together, they strongly focus on the upper part of the Business Model Canvas (Infrastructure + offering + customers), and to supplement them, we only need to use the universal stage of financial analysis;
  • The authors of the method targeting agriculture machinery observe, however, that agriculture is a gigantic sector of huge potential [84];
  • The main goal of agriculture is to provide food by cultivating the soil, growing crops and raising livestock [111];
  • HICS method is intended to develop industrialized and sustainable solutions for food and diverse groups of people [63,64];
  • Being one of the main branches of agriculture, raising livestock needs appropriate diet and adequate care for animals;
  • These two methods have been selected because we wanted to provide individual feeding solutions to target groups of livestock breeders wishing to increase their production and ensure the best healthy environment for animals. Target groups include farmers breeding dairy and beef cattle, chicken, goats, etc.;
  • The combination of the two methods allows for exploiting validated design elements from the two industries in a new approach to PSS development in animal feed;
  • This combination may help in reducing waste of feed and agricultural products intended for animals.
These methods may be combined in the following way:
  • Data collection [84];
  • Contextual application/analysis (HICS) [63,64] and PESTEL analysis [84];
  • Partnership network (HICS) [63,64];
  • Solution development/design (HICS) [63,64];
  • Financial analysis (universal stage);
  • Decision making [84].
By combining two incomplete methods and supplementing them with the financial analysis stage, we have arrived at a new and complete PSS design method for a new industry.
In order to check how our proposal works, we conducted a case study on a farm. Our proposal targets feeding farm animals (Figure 6). This is a totally new area for which no PSS solution has been developed so far; this new area emerged as a combination of the two sectors targeted by the two above-mentioned methods. The development of such a method is extremely important from the point of view of both feed manufacturers and breeders.
Feed manufacturer supplies the feed to his customer, in our case, a farmer who breeds animals. We need to start by discussing some aspects, possible additional services and selling services rather than feed. Manufacturer collects a specific fee for results achieved by the farmer. In the analyzed case, for this fee, the manufacturer guarantees the provision of a number of services connected with timely supplies of feed, storing it at customer’s premises, making suggestions about appropriate diet that could produce the best results, veterinary care, as well as all sorts of advice and consultancy in the field of feeding farm animals. We need to stress here that ownership is not transferred to the user but continues to rest with the feed manufacturer. Every farmer wants, above all, to achieve the best possible results in breeding farm animals and cares for keeping his animals in the best shape while he is not interested in owning feed or taking care of a number of issues connected with it.
We need to focus on what is important to a breeder, that is, mainly on effects produced by the feed and services connected with it. In a PSS model, a feed manufacturer may supply a number of services, starting from the supply of feed and its storing at farmer’s premises up to a professional diet in line with effects expected by the breeder and veterinary care services. Such a solution can be valued based on how farmer’s animals perform when it comes to, e.g., milk production, weight, etc.

6. Discussion

6.1. Discussion: The Value of Business Model

The paper provides a review of the existing PSS design methods paying special attention to their impact on the Business Model Canvas. The review covered 60 PSS design methods which we managed to identify. Next, we examined these methods in an innovative and unprecedented manner. The authors’ specified design stages of the available methods which consider and impact individual domains of the business model. Furthermore, methods were broken down into three groups. After the authors have classified and identified business model domains that are little influenced by the available methods, three universal PSS design stages have been proposed.
The paper proposes a completely new classification of PSS design methods. Based on the Business Model Canvas the following three main groups of PSS design methods have been identified:
  • Group 1—IO (Infrastructure + offering);
  • Group 2—IOC (Infrastructure + offering + customers);
  • Group 3—IOCF (Infrastructure + offering+customers + finance).
Having reviewed the potential Business Model Canvas domains, three out of them have been unambiguously found to fit each method. It means that by using these domains, we can split the methods into three separate sets.
The proposed classification has four main advantages. They include support to managers in identifying the domains in a company that are crucial for PSS; support to designers in generating new solutions for new industries; dialogue between PSS design and a company business model; and clear presentation of methods from the least to the most comprehensive.
Most, as many as 42 (groups 1 and 2), of the explored methods cover only fractions of the Business Model Canvas, not its entirety, which is why their repeatable use may be unattainable due to concrete instructions targeting companies which would like to use them. Using methods allocated to this groups may be risky. It is a very imprecise presentation of activities that a company should carry out when developing a new PSS. Further stages of presented methods do not specify who is responsible for performing individual activities and which activities should be carried out by the company. Only general slogans are presented.
The methods included in group 3 draw attention to the major financial consequences of acting within the PSS framework and the way a company can generate revenue from PSS-based activities. Such information was missing in each method from groups 1 and 2. The third group covers all of Business Model Canvas building blocks, however, methods allocated to this group, although being the most comprehensive, do not consider all business model elements and thus have some limitations.
The paper identifies the main gap in PSS design which confirms that none of the available methods that has been singled out and separated as an individual and independent method covers all of nine elements of the Business Model Canvas.
Business Model Canvas-based analysis of PSS design methods is important for companies, which have shifted or want to shift from offering products to offering a combination of products and services. Such classification helps companies in their searches for a design method; it reveals their limitations and defines business model domains which a particular method influences. In addition, it can assist companies which have already worked out a PSS to implement required changes or improve their current performance. Considering the available methods and possibilities of combining them, attention has been drawn to the need to propose universal design stages. These stages offer bigger flexibility in creating new PSS and help in estimating financial performance and improve relationships with customers and business partners. These elements have a valid business potential so far little acknowledged in PSS design.
The most unique aspects of the paper include the analysis of PSS design approaches and their classification from the point of view of the impact on Business Model Canvas. This is how we reflect the impact of PSS design on a company. Universal design stages and the proposal to combine the methods are also innovative. Classification highlights relevant research issues in PSS design and provides a complete overview of methods available in literature viewed from another, previously missing perspective.
How the proposed classification is used is another aspect of value added. The combination of methods based on the Business Model Canvas has not been tried before either in literature or in practice, and it is a new approach to the development of design methods based on known and available approaches. The concept is very intuitive and focused on market and customer needs. If necessary, it allows generating a number of methods for many industries.
In addition, using the classification, the authors have identified only a handful of methods that take account of Key Partners, Customer Segments, Cost Structure and Revenue Streams. Looking at the classification, its main limitation in PSS design may derive from a small number of methods that take account of the above-listed domains. With the above shortage in mind, we have proposed universal stages which can be used in PSS design in available methods, as well as in methods generated from the classification. There is a clear need to put in place universal design stages focused on these domains and economic analysis of PSS due to limited combination possibilities stemming from very limited consideration given to these domains in available methods. By exclusively using methods included in the classification to generate new methods, we would continuously exploit methods that consider these domains. It restricts flexibility and possibilities of generating PSS for new industries. The restriction can be eliminated by proposing universal design stages which fill in elements of the Business Model Canvas ignored in the combination of methods.
Irrespective of the method or industry, classification facilitates decision making in the design stage. Moreover, the classification clearly demonstrates which domains of the company are engaged in the creation of a new PSS.
The innovative nature of classification is expected to expand PSS design possibilities by supporting the integration of product, service and business model components from early design stages. The need to integrate the above constituents is expected to take account of all PSS functions, the perspective of its full life cycle and better coordination of company operations.
The classification expands our view of PSS design, which has so far focused preliminarily on the integration of product design and services linked with the products. Design methods approached in the context of the Business Model Canvas enable recording the impact and organizational changes in different domains of company operations and visualizing processes taking place after the business switches to PSS. Effective integration of these areas unleashes a much bigger potential for developing new PSS. The proposed classification sends a clear message to present and future authors of methods who should take care of the entire business model of a company when generating new approaches.
The perspective of combining the existing methods from individual groups offers an opportunity to create new methods for new industries, which will cover all of the company business model using universal design stages. Such approach helps in finding out where the company obtains its money from, what it sells, to whom and how as well as when it decides its performance is successful. In addition, various types of information omitted in individual methods will be brought together and used to generate better solutions.

6.2. Discussion: Open Business Model with Open Innovation Dynamics

According to Open Innovation, enterprises should not rely only on the results of their research and development works but also use external sources of innovation through cooperation with other entities [112,113,114]. Enterprises using Open Innovation acquire the necessary knowledge and innovations as part of the built network of contacts (specialized research institutions, suppliers, users, customers and competitors) [115,116]. They should also share their inventions, which they do not use, to other entities based on selling licenses, creating consortia or spin-off companies. It is a deliberate flow of knowledge, ideas and technologies that accelerate innovation [112,117].
Open Innovation seems to be a natural direction of changes in the evolution of business models [112,113,115]. It allows for the creation of suitable places for research and development activities and those that attach importance to cooperation and joint value creation [118,119]. The company’s business model determines which external information to use and what internal information to disclose to other entities [120,121]. The use of open innovations in the business model is the company’s openness to knowledge and solutions in its environment to maximize profits for all cooperating entities [114,122,123].
In designing business models, PSS Open Innovation supports exchanging information and collaboration within a team, which any company can adopt to manage the PSS design process. In this context, the use of Open Innovation includes [124,125,126]:
  • Extending the functionality of the product while increasing its value for all parties involved;
  • Generating new ideas and consulting for the best—this guarantees enterprises access to a large number of innovative ideas generated by employees while ensuring a deeper and more complete understanding of the needs of colleagues and customers;
  • Interaction with the client—client involvement and the use of data and information from the client by the company’s employees in the development of new solutions;
  • Joint development of new solutions—consists of the cooperation of various enterprises on new solutions, which means that it is developed as quickly as possible while reducing costs.
The business model describes several value-generating mechanisms essential for a company to profit [127,128]. For the business model to be effective and profitable, its dynamics are crucial. This is especially true for the PSS business models [54,115]. Business Model Dynamics enable the automation of business models and is one of the supporting business models [129,130]. This allows for automatically updating, defining and redefining business processes in the enterprise, which enables continuous updating of the business model that adapts to changes in the enterprise’s environment [131,132,133].
Business Model Dynamics seems to be particularly important from the point of view of PSS business models. The changing needs and requirements of customers require enterprises to develop new solutions. New solutions are related to introducing changes in the enterprise’s business model. In this context, Business Model Dynamics allows you to improve your value proposition by delivering better product-related services, analyzing and improving the value chain and establishing a revenue and cost structure. In this way, it contributes to the introduction of innovation in companies’ business models using PSS.
Both Open Innovation and Business Model Dynamics will increasingly affect the development of PSS business models, the configuration of which will be original, innovative and pioneering. They will help companies develop new solutions and update the value chain architecture. As a result, they will enable them to face the challenges companies face in a changing market.

7. Conclusions

This study aims to highlight the role of PSS design methods and their impact on the business model. The article proposed an innovative way to classify PSS design methods, emphasizing their impact on the Canvas Business Model and presenting the gaps they have and how to fill them. The analysis through the prism of Canvas Business Model is carried out in order to cover the entire scope of the company’s activities. The conducted research indicates that the existing PSS design process presented in the literature does not fully reflect the industrial PSS design practice.
The aim of the paper was to answer the following three research questions:
  • Do PSS design methods available in literature impact all elements of Business Model Canvas?
A literature review indicates that none of the PSS design methods affects all elements of the Canvas Bisness Model. Group 3—IOCF is the most complete group. Incomplete methods containing fragments of the Canvas Bisness Model have been classified in the other two groups.
2.
Can we create new PSS models by combining methods already available in literature?
Combining PSS design methods has not been discussed in the literature so far. Such activities are possible by comparing the appropriate stages of specific design methods based on the Canvas Business Model. This turns out to be a new approach to the development of design methods based on known and available approaches. This concept is very intuitive and oriented towards the needs of the market and the customer. It allows you to generate many methods for many industries depending on whether there is such a need.
3.
How can we create new PSS models for new industries based on the proposed classification?
The developed classification allows for flexible selection and combination of various methods in various ways, ranging from combining methods, through interweaving or crossing their stages, to their extension and supplementation. In some cases, combining the methods may turn out to be insufficient because, even after combining the methods, it may turn out that the newly created method does not contain all areas of the Canvas Bisness Model. It is necessary to extend it with additional steps or modules that will take into account these areas to create new solutions for the industry on the basis of several available methods.
The work also has some limitations. The first is the completeness of the study. It is likely that selecting a different combination of keywords and searching more databases would find more PSS design methods. Another limitation of this work is a single farm case study on feeding farm animals.
Further works will focus on developing a PSS design method based on the Business Model Canvas. That will help in creating a comprehensive approach to PSS design, which covers all of a company and its resources. The method should have theoretical and practical implications. In particular, it could be used as a support tool for designers, managers and marketing professionals. The method should consider customer needs and expectations and be used in different industries in companies of different sizes.

Author Contributions

Conceptualization, M.S. and A.K.; methodology, M.S. and A.K.; formal analysis, M.S.; investigation, M.S. and I.J.-G.; resources, M.S.; data curation, M.S.; writing—original draft preparation, M.S.; writing—review and editing, M.S.; visualization, M.S.; supervision, A.K., I.J.-G. and A.E.W. All authors have read and agreed to the published version of the manuscript.

Funding

Acknowledgments to Ilona Jacyna-Gołda for financial support for publication.

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Not applicable.

Data Availability Statement

Not applicable.

Acknowledgments

Acknowledgments to Ilona Jacyna-Gołda, Andrzej Kraslawski and Aneta Ewa Waszkiewicz for help with the research.

Conflicts of Interest

The authors declare no conflict of interest.

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Figure 1. Elements of Canvas Business Model [45].
Figure 1. Elements of Canvas Business Model [45].
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Figure 2. Elements of Business Model Canvas considered in the PSS design methods from Group 1—IO.
Figure 2. Elements of Business Model Canvas considered in the PSS design methods from Group 1—IO.
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Figure 3. Elements of Canvas Business Model considered in PSS design methods from Group 2—IOC.
Figure 3. Elements of Canvas Business Model considered in PSS design methods from Group 2—IOC.
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Figure 4. Elements of Canvas Business Model considered in PSS design methods from Group 3—IOCF.
Figure 4. Elements of Canvas Business Model considered in PSS design methods from Group 3—IOCF.
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Figure 5. Impact of design methods on areas of Business Model Canvas.
Figure 5. Impact of design methods on areas of Business Model Canvas.
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Figure 6. PSS proposal for feeding farm animals.
Figure 6. PSS proposal for feeding farm animals.
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Table
Table 1. Business module analysis.
Table 1. Business module analysis.
AuthorsWeill and VitaleChesbroughAkkermans and GordijnMorris et al.BallonBouwman et al.JohnsonOsterwalder et al.De Reuver et al.
NameBusiness Model SchematicsTechnology/market mediatione3—value methodologyEntrepreneur’s business modelThe Ballon approachThe STOF modelThe Four-Box Business ModelBusiness Model CanvasBusiness model roadmapping
Source[38][39][40][41][42][43][44][45][46]
Citations—Research Gate15154978103627862514257309291131
Citations—Google Scholar50017466241416152223 330979
E-business/GeneralE-businessGeneralE-businessGeneralGeneralE-businessGeneralGeneralGeneral
ApplicationElectronic servicesOpen innovationE-commerce (dedicated and used in e-commerce)GeneralICT services, products and systemsElectronic services, especially in the field of mobile telephony, ICT, media, energyCompanies entering the ‘white space’It can be used without any restrictionsGeneral
Number of constituents8683 levels and 6 questions4 levels, 3 control parameters at each level449 blocks broken down into 4 pillars2 layers and 4 stages
ConstituentsStrategic objectives, value proposition, revenue sources, success factors, channels, core competencies, customer segments and IT infrastructureValue proposition, target markets, internal value chain structure, cost structure and profit model, value network, competitive strategyActors, market segments, value offering, value activity, stakeholder network, value interfaces, value ports, value exchangesFoundation level (For the foundation level, a well-formulated business model must address six key questions:
  • How do we create value?
  • Who do we create value for?
  • What is our source of competence?
  • How do we competitively position ourselves?
  • How do we make money?
  • What are our time, scope and size ambitions?); Proprietary level, Rules level
A
Value Network Parameters
A1
Combination of Assets
A2
Vertical Integration
A3
Customer Ownership
B
Functional Architecture Parameters
B1
Modularity
B2
Distribution of Intelligence
B3
Interoperability
C
Financial Model Parameters
C1
Cost (Sharing) Model
C2
Revenue Model
C3
Revenue Sharing Model
D
Value Proposition Parameters
D1
Positioning
D2
User Involvement
D3
Intended Value
Service, Technology, Organization, FinanceCustomer Value Proposition (Job-to-be-done, Offering), Profit Formula (Revenue Model, Cost Structure, Target Unit Margin, Resource Velocity), Key Resources, Key Processes (Processes, Business Rules and Success Metrics).Infrastructure (Key Activities, Key, Resources, Partner Network), Offering (Value Propositions), Customers (Customer Segments, Channels, Customer Relationships), Finances (Cost Structure, Revenue Streams)Two layers: the business model layer, which defines the required changes in the business model, and the activities layer, which defines the actual activities to be executed. The process of business model roadmapping involves four core steps: identify the desired change in the business model, analyze how these desired changes impact other business model domains, the translation in executable actions and back-casting transition paths
Focus on value propositionXXXX Considering customer valueXValue placed at the coreRequirement specification
Presentation (visualization) and a comprehensive review of business model designXXMulti-aspect, network-centric approachXClear delineation of the scope of a proposed business model. Multi-parameter approachEach domain must be described in great detailXXPlan that describes intermediary steps and critical decisions
Analysis of differences between the present and future business model XX
Network business modelX X XX Focuses on the internal business model of a single company rather than on a partnership network, yet it considers network elementsMore difficult to be applied in networks for multi-level reasons
Easy to modify XX
Transparency XXX
Takes account of IT roleX X XX
Identification of key weaknesses X XXXX
Identification of key resources XXXX
Identification of key success factorsX X XX
Economic aspectXXExplains how economic value is created XMeasures business model profitabilityXInforms how enterprises generate profit and operational expenditure
Innovation Linked with technology-based innovation Service innovation Design and innovation orientedX
Strategic/operational/tactic level Include competitive strategyDefines e-business strategies and operational requirements at qualitative and quantitative levelsIncludes a strategic element (component 4) Links business strategy and business processesLinks strategic level which attracts most of model thinking with the operational and tactic levels necessary for translating a business model into practical planning
Additional informationSurvey research35 case studiesStrongly stresses the evaluation of profitability and venturesContains a unique element that covers personal/investor factors of an entrepreneur (component 6)Focused mainly on the classification of business models in taxonomy schemesPractical tool derived from research studiesDistinguishes processes and resources as separate elements but claims that they should be considered together as a process–resource couple since there is some synergy between themMost often used in practice—has been used and adapted to concrete business scenarios and applicationsDefining timeline horizon
Table
Table 2. Elements of Business Model Canvas considered in PSS design methods from Group 1—IOC.
Table 2. Elements of Business Model Canvas considered in PSS design methods from Group 1—IOC.
No.The Authors of the MethodSourceKey PartnersKey ActivitiesValue PropositionCustomer RelationshipsCustomer SegmentsKey resourcesChannelsCost StructureRevenue StreamsValidated in PracticeResearchers’ ProposalTarget Industry
1.Engelhardt et al.[49] ++ + + Intersectoral approach, food processing, metal, plastics industry, construction, furniture, repair networks, environmental consultants
2.James et al.[50] ++ + + Electronics and IT sector
3.Abdalla[51] ++ + + No indications—potentially any
4.Weber and Deubel[52] ++ + +No indications—potentially any
5.Van Halen et al.[53] ++ + + No indications—potentially any
6.Tukker and Tischner[54] ++ + + No indications—potentially any
7.Barquet et al.[55] ++ + + Bike sharing system
8.Muto et al.[56] ++ + + Car spare parts—production support
Table
Table 3. Elements of Business Model Canvas considered in PSS design methods from Group 2—IOC.
Table 3. Elements of Business Model Canvas considered in PSS design methods from Group 2—IOC.
No.The Authors of the MethodSourceKey PartnersKey ActivitiesValue PropositionCustomer RelationshipsCustomer SegmentsKey ResourcesChannelsCost StructureRevenue StreamsValidated in PracticeResearchers’ ProposalTarget Industry
1.Morelli[57,58]++++ ++ + Urban telecenter—service offering office space and related premises for short-term rental (from 1 h on)
2.Green and Vergragt[59] +++ ++ + Issues concerning food, accommodation (heating, cooling, house lightening) and clothing
3.Tukker and Van Halen[60]+++++ + + No indications—potentially any
4.Alonso-Rasgado et al.[61,62]+++ +++ +Practically any industry, authors mention, inter alia, aircraft, food processing, machine, tools and medical industry
5.Tukker and Tischner[54] +++ ++ + No indications—potentially any
6.Manzini et al.[63,64]+++++++ + Food
Evans et al.
7.Matzen and McAloone[65] +++ ++ + Shipbuilding (valves, tank gauging systems, configuration services for Danish shipyards)
8.Aurich et al.[66] ++ ++ + Heavy-duty machinery for road construction
9.Morelli[67] ++ ++ +No indications—potentially any
10.Welp et al.[68] +++ + +Micro-production in the field of electroerosion machining
11.Komoto and Tomiyama[69] +++ ++ +IT hardware
12.Rexfelt and Hiort af Ornäs[70] +++ + + No indications—potentially any
13.Maussang et al.[71] +++ ++ +Power industry—electricity transmission in hyperconductive cables, helium-based cooling devices
14.Shimomura et al.[72] +++ + + Lifts
15.Tan et al.[73] +++ ++ +Aircraft industry
16.Kimita et al.[74] +++ + +Services on domestic flights
17.Wood and Tasker[75] ++ ++ + Aircraft
18.Vasantha et al.[76] +++ ++ +Laser systems used in industrial cutting operations
19.Geum and Park[77] ++ ++ +Automotive, water purifiers
20.Marques et al.[78] +++ ++ + Automotive
21.Pezzotta et al. [79] +++ + +No indication—potentially any
22.Pezzotta et al.[80] +++ ++ +Automotive (garage for trucks)
23.Kim et al.[81] +++ ++ + Mobile devices, telecommunication, education (English)
24.Moser et al.[82] +++ + + Automotive—Service Mobil
25.Tran and Park[83] +++ + + Office furniture
26.Ziout and Azab[84] +++ ++ + Agricultural machinery
27.Chiu et al.[85] ++ ++ +Electronics (digital)
28.Trevisan and Brissaud[86] ++ ++ +Pneumatic energy supplies
29.Sassanelli et al.[87] +++ ++ +No indication—potentially any
30.Scherer et al.[88]++++ ++ +No indication—potentially any
31.Andriankaja et al.[89]++++ ++ + Cleaning robot—cleaning services for meat processing industry—Clean Robot, autonomous industrial cleaning services
32.Adrodegari et al.[90] +++ + + CNC machine tools (fast milling machines)
33.Idrissi et al.[91] +++ + + No indication—potentially any, universal method
Table
Table 4. Elements of Business Model Canvas considered in PSS design methods from Group 2—IOCF.
Table 4. Elements of Business Model Canvas considered in PSS design methods from Group 2—IOCF.
No.The Authors of the MethodSourceKey PartnersKey ActivitiesValue PropositionCustomer RelationshipsCustomer SegmentsKey ResourcesChannelsCost StructureRevenue StreamsValidated in PracticeResearchers’ ProposalTarget Industry
1.Brezet et al.[92] ++ +++++ Cars (mobility), home appliances, office furniture
2.Luiten et al.[93]++++ + +++ Transportation—short-distance individual mobility (Mitka vehicle)
3.Maxwell and van der Vorst[94] ++ ++ ++ Electronic car components; PCs and other participating in Environmentally Superior Product program—Ireland
4.Halme et al.[95] +++ + ++ Home appliances, radio and TV equipment
5.Lindahl et al.[96] +++ + ++ +Manufacturing
6.Uchihira et al.[97,98] ++ + + +Video cameras (product-based services)
7.Müller et al.[24] ++ +++ + Micro-energy systems (small decentralized energy conversion units that supply households or small companies; crucial in low income regions where infrastructure is poor)
8.Sundin et al.[99] +++ + ++ Cranes, compactors, washing machines and refrigerators
9.van de Kar[100]++++ ++ + +Mobile services (mobile phones), ICT
10.Lee et al.[101] ++++++++ +Clothing, containers for recycled clothing
11.Kim et al.[102] +++ ++ + +Umbrellas (umbrella rental service at underground stations)
12.Akasaka et al.[103] +++ + ++ +Electronics (facility maintenance service for an electronic substation)
13.Dimache and Roche[104] +++ + ++ +Cooling devices
14.Tran and Park[105] +++ +++ + Industrial and engineering training courses (educational materials). Product and service design (sanitation services, toilets in Ghana)
15.Vezzoli et al.[106] +++ + ++ Automotive
16.Medini and Boucher[107] +++ ++ + +Steel sludge
17.Muto et al.[108] +++ ++ ++ Blocks of flats/condominiums for elderly people combined with services (home appliances manufacturers, construction and ICT service suppliers)
18.Campos et al.[109] +++ + + +Manufacture machinery
19.Chiu et al.[110] +++ + ++ +Clothing and washing machines (laundry units)
Table
Table 5. A combination of PSS design methods and universal PSS design phases taking into account all elements of the Business Model Canvas.
Table 5. A combination of PSS design methods and universal PSS design phases taking into account all elements of the Business Model Canvas.
GroupThe Authors of the MethodSourceKey PartnersKey ActivitiesValue PropositionCustomer RelationshipsCustomer SegmentsKey ResourcesChannelsCost StructureRevenue StreamsTarget Industry
Group 2—IOCManzini et al.[63,64]+++++++ Food
Evans et al.
Group 2—IOCZiout and Azab[84] +++ ++ Agricultural machinery
Universal PSS design stageFinancial analysis—universal stage ++Universal stage
New PSS design method +++++++++Feed for agricultural animals
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Salwin, M.; Jacyna-Gołda, I.; Kraslawski, A.; Waszkiewicz, A.E. The Use of Business Model Canvas in the Design and Classification of Product-Service Systems Design Methods. Sustainability 2022, 14, 4283. https://doi.org/10.3390/su14074283

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Salwin M, Jacyna-Gołda I, Kraslawski A, Waszkiewicz AE. The Use of Business Model Canvas in the Design and Classification of Product-Service Systems Design Methods. Sustainability. 2022; 14(7):4283. https://doi.org/10.3390/su14074283

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Salwin, Mariusz, Ilona Jacyna-Gołda, Andrzej Kraslawski, and Aneta Ewa Waszkiewicz. 2022. "The Use of Business Model Canvas in the Design and Classification of Product-Service Systems Design Methods" Sustainability 14, no. 7: 4283. https://doi.org/10.3390/su14074283

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