Competitive advantage implication of different Product Service System business models: Consequences of ‘not-replicable’ capabilities

For many companies, the servitization of business grounded on Product Service Systems is proving to be a winning value proposition based as it is on a distinctive mix of economically, socially and environmentally sustainable solutions aimed at satisfying customer’s needs. This research investigates the conjoint effect of three potential sources of PSS’s competitive advantage: the type of PSS, i.e. a value proposition directed at a market segment based on specific customer behaviour, the core resources, competences and organizational processes on which the PSS’s business model is based and their level of protection from competitor’s replication. We adopted a multiple case study methodology to take into account the complex interrelation of the variables characterizing the phenomenon investigated by sampling 10 companies and collecting data by means of semi-structured interviews. Results of within- and cross-case analysis reveal that Use-Oriented PSS business models gain a competitive advantage from physical resources and organizational processes, whether protected against replication threat or not, while Result-Oriented PSS business models from people competences. Human capital is fundamental also for Product-Oriented PSS business models, but companies can reach a competitive advantage only if protected against replication threat from competitors. The paper contributes to the expanding PSS literature by identifying potentially distinctive factors of the PSS business model and by providing useful considerations on PSS competitive and strategic potential, with an in-depth analysis of success elements.