Revolutionizing business models – Analysis of product service systems in European bicycle industry

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School of Business | Master's thesis
Degree programme
Management and International Business (MIB)
In this thesis I focused on fulfilling a research gap, which exists in the empirical research of product service systems (PSS) in bicycle industry. The research provides practical examples of PSS in this field, makes the whole concept of PSS easier to understand, and defines the current status of PSS in the European bicycle industry. Moreover, this research studied the strategic ad-vantages and disadvantages of different PSS in bicycle industry on a general level and from a perspective of a Northern European bicycle manufacturer. Several different theoretical models and frameworks of PSS have been created by the academics, but the empirical research and practical examples are lacking behind the theoretical work. In the literature review, I studied the most common theoretical approaches of PSS and selected one model, which supported the research of PSS in the European bicycle industry. The selected model was Tukker’s PSS categorization model. This model provided a systematic approach for the research and presenting findings. Research method for defining current PSS in the European bicycle industry was qualitative archival research, which utilized public information from online sources, mainly company websites, annual reports and other digital publications. The research focused on bicycle manufacturers and service providers. In this research, varying practical examples of PSS were found for all categories of Tukker’s categorization model. Overall, it can be said that the involvement of bicycle manufacturers in service business is still rather limited, but the numerous service providers have made the bicycle industry extremely diverse from a perspective of service supply. The strategic potential of PSS in bicycle industry was researched with a single case study of a Northern European bicycle manufacturing company. This single case study included semi-structured interviews of seven case company representatives, who are professionals in bicycle industry. This research targeted at understanding, how the professionals of bicycle industry see the potential of product service systems, on a general level and especially from a perspective of manufacturer, if they would add certain services to their existing business. Eventually, interviewees were interested mainly in three service types: maintenance, leasing, and second-hand bicycle sales. Of these three, second-hand bicycle sales service stood out as the most potential service.
Thesis advisor
Turunen, Taija
product service system, business model, bicycle industry, servitization
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