Header image

Service B2B 2

Track 3
Saturday, June 18, 2022
1:00 PM - 2:30 PM
Conference Room 1


Agenda Item Image
Professor Jamie Burton
Professor Of Marketing And Head Of Management Sciences And Marketing Division
University of Manchester

Orchestrating complementarity of actor activities in ecosystems to develop capabilities


B2B service research recognizes the need to focus on value outcomes for customers and develop frameworks that help managers to better manage their multi-actor shaped, customer experiences (Witell et al., 2020; Zolkiewski et al., 2017). This necessitates the study of how capabilities are developed in multi-actor ecosystems, rather than focusing on single firms, or dyads (Cova and Salle, 2008; Maglio et al., 2009; Story et al., 2017, Araujo, Gadde & Dubois 2003). Yet the multi-actor perspective remains under-researched (Raddats et al., 2019).
Capability development within ecosystems is complex and can be influenced by the competitive environment (Gebauer, 2008; Turunen and Finne, 2014), market dynamism (Baines et al., 2009) and tensions and territoriality between actors (Burton et al., 2016; Wagstaff et al., 2020). Concurrently, we contend that even where actors strive to work together to co-create value, there can be challenges in realising the efficiencies of such capabilities. Such challenges might arise where a failure to effectively manage and match their capabilities and results in problems in effectively delivering the desired outcomes.
Thus, we argue that both a lack of capability complementarity and the nature of territorial tensions between actors can act as moderators, impacting actors’ ability to effectively develop capabilities that deliver desired customer experiences and outcomes. In scenarios where a focal company strives to act as an orchestrator of other actors in an ecosystem, it is likely that actors’ service processes and systems may vary depending on the degree of complementary (Fang et al., 2008) or contexts. Thus, despite positive intent (Crowley et al., 2018), ecosystems can fail to maximise the effective and efficient delivery of desired capabilities.
Grӧnroos (2012) highlights how activities, resources and actors’ contexts shape customer outcomes. An orchestrator can influence how and when other ecosystem actors deploy their resources and the types of activities they offer. When firms combine physical operand resources it can be straightforward to create physical outputs that work. However, when firms combine operant resources using knowledge and skill (e.g. IT, maintenance, etc.) the effectiveness may depend on the specific contexts of all actors involved. Actors interact at, macro, meso and micro levels and face differing contexts (Story et al., 2021). This complexity can ultimately impact customer experience and the value realised.
Where individual actors in a network focus on their own service delivery activities rather than the overall customer experience realised through managed and coordinated capabilities of multiple actors, service outcomes may be harmed.
Thus, our research question is: How does degree of complementarity between actors (firms, customers and intermediaries) moderate effectiveness of capabilities developed in ecosystems?
This work employs a single case study of multi-actor ecosystem interactions, assessing the complementarity of actor contexts, activities and deployed resources on capability development, taking into account that they interact at different levels (industry [macro], firm, strategic business unit [meso], individual [micro]).
The research contribution lies in identifying the importance of orchestrated complementarity as a means of mediating the effectiveness of ecosystem actor capability development. Findings will be shared at the conference.
Agenda Item Image
Jukka Hemilä
Senior Scientist
VTT Technical Research Centre Of Finland Ltd

Next Generation Industrial Services Based on the Digital Twins


Purpose and motivation for the study
For several years, machine manufacturers have collect data related to their products within different formats and tools. Today, these data constitute Digital Twins. The number of Digital Twins increases continuously, as products of other manufacturers become included in the own one. Thus, hinders for seamless digitalization arise from inhomogeneous ecosystems, semantic transformations needed, problems in extracting useful information, lifecycle dependent issues and open questions on how to monetize Digital Twin information via new service offerings. It is now time to investigate harmonization and usability issues for Digital Twin’s data and develop next generation industrial services based on the available Digital Twin data of the smart connected products.

This study is a part of international project, where consortium aims together research the new opportunities provided by multiple digital twin concepts in purpose of increasing usability and functional upgrading of machines and equipment within the different industrial machine domains. Project includes multiple industrial case studies, supported by Digital Twin ICT services. Additionally, expert groups and facilitated workshops develop topics further. Literature findings and benchmarking studies enriches the findings. Within the study, research will focus on the two main research questions: 1) How Digital Twin can boost value creation in industrial product-service lifecycle, and 2) Which kind of business models are needed in future digitalized industrial context.

Because of the growing volume, complexity, and strategic importance of data, it is no longer desirable or feasible for each function to manage data by itself, build its own data analytics capability, or handle its own data security. To get the most out of the new data resources, many companies should create dedicated data groups that consolidate data collection, aggregation, and analytics, and are responsible for making data and insights available across functions and business units. This means, that digitalization will change organization structures, new competencies are needed, new business strategies should be created and finally, entire new business model is needed for the companies operating in digitalized industries. New performance and value-based revenue models can be formed, based on the Digital Twin data from the operations. Therefore, new earning logics and pricing models within the Digital Twin based services should be innovated.

This study increases the understanding of service business innovations for manufacturing industries by further developing previous conceptual frameworks for service development and management. As a result, study propose new service business development model and methods to support collaborative businesses based on the utilization of Digital Twin for the entire lifecycle of the systems.
Agenda Item Image
Dr Joona Keränen
Associate Professor
RMIT University

Customer acceptance of gain-sharing contracts in B2B markets


Business-to-business (B2B) markets have witnessed a major shift towards a service logic, where suppliers increasingly focus on supporting customers’ value creation (Grönroos & Voima, 2013; Vargo & Lusch, 2016). This shift should logically involve a change from input-based pricing (pricing based on a supplier’s deeds) to outcome-based pricing (pricing based on realized performance gains for a customer) (Ulaga & Reinartz, 2011).

Gain-sharing contracts are a strategic and prevalently used approach through which suppliers attempt to implement customer outcome-based pricing. In gain-sharing contracts, the supplier promises to realize a measurable improvement in the customer’s value process. The realized economic gain is shared between the seller and the buyer. The gain-sharing mechanism thus is supposed to align the interests of the seller and the buyer in the context of pricing (see Hinterhuber, 2015).

Despite the many logical arguments that would support the use of gain-sharing contracts (Keränen et al., 2021), anecdotal evidence indicates that customers often do not accept gain-sharing contracts. Given the lack of academic research on outcome-based pricing in business markets, the reasons behind this customer resistance remain however unclear (Schaefers et al., 2020).

Consequently, the purpose of this study is to examine how suppliers can facilitate customer acceptance of gain-sharing contracts in B2B markets. To do so, we build on dual entitlement theory (Kahneman et al. 1986a, b), to suggest that customers form subjective judgments about the fairness of distributing the economic gains with suppliers. Customers will resist what they perceive as unfair pricing behavior, even choosing to forego economic gains to do so. Thus, in the context of gain-sharing contracts, suppliers need to find ways of maintaining the customer’s sense of fairness in the distribution of economic gains, while ensuring that the supplier captures a meaningful share of the created value to make this pricing instrument economically feasible.

This research builds on a qualitative pre-study with industry experts on gain-sharing contracts and price fairness theory to develop a scenario-based experimental study. We work with a panel provider to gain access to professional purchasers in order to test a research model with three key hypotheses. Firstly, we hypothesize that economically equivalent contracts with different contract elements (i.e., lower/higher gain-sharing ratio and with/without fixed fee) affect customers’ willingness-to-switch to a gain-sharing contract. Secondly, customers’ perceived fairness and perceived risk regarding these contracts explain their willingness-to-switch.

The results of this study contribute to B2B marketing research in the areas of outcome-based pricing, and contemporary buying behavior, where gain-sharing contracts and value-driven buying have remained critical, yet poorly understood issues (ISBM 2018; Schaefers et al., 2020). For managers, this study highlights the contract elements that influence customer´s willingness to accept gain-sharing contracts and suggest ways how suppliers can influence the customer’s willingness to switch.