Definition of solution(s)

The Oxford English Dictionary defines a solution as “a means of solving a problem or dealing with a difficult situation.” Solutions (plural) have been described as “products or services designed to meet a particular need.” In the servitization literature, the term solution has been applied in various ways, and scholars have prefixed the term solution with customer, integrated, or total to highlight the different types of existing solutions (Nordin & Kowalkowski, 2010).

Tuli et al. (2007) use the term customer solution to emphasize that a solution should meet a customer’s particular need. The term integrated solution has been used to emphasize that products and services are combined into a productized package sold to the customer. Authors typically use the term integrated solution to describe a phenomenon where a manufacturer designs a solution for the customer based on key parameters set by the customer. For instance, an airport management company may request a supplier design a solution to move 20,000 passengers inside one terminal as fast as possible each day. Suppliers then design a solution to address their customer’s specific needs, and such a solution might include a range of products, a service contract, or performance guarantees (Davies, Brady & Hobday, 2006; Windahl & Lakemond, 2010). A total solution usually refers to a so-called turnkey solution provided to the customer. This is an attempt to offer customers a one-stop-shopping experience, meaning that a customer can source all the services required from one supplier to reduce its transaction costs. The supplier decides which tasks it will undertake in-house and which it will outsource. For instance, ABB offers total solutions to its customers operating in the oil and gas sectors, which involves taking full responsibility for a plant’s functionality. A total customer solution in contrast refers to a tailored solution provided to a firm’s existing customers. In addition, the terms customized (see Kohtamäki & Partanen, 2016) or tailored solutions have been applied to underline the importance of the knowledge-related work required to modify solutions on a case-by-case basis.

Product-service systems (PSS) are a Scandinavian concept (Baines et al., 2008) and have been used particularly in the manufacturing sector and technical studies to describe the integration of products and services that deliver value in use. For instance, Rolls-Royce’s power-by-the-hour concept or Michelin’s fleet management solution could be illustrations of PSS because the customer pays for the value (flight hours or kilometers driven) and outcomes rather than for pure products or services. On the other hand, these types of examples could be described also as performance-based services, operations, and maintenance (O&M) solutions, or total solutions. Key to the PSS concept is that the supplier is responsible for providing the outcome to the customer. Hence, the supplier takes

the risk (and the possible profits based on the risk-level) of guaranteeing the solution’s functionality.

Other authors use the simple term offerings to refer to value derived from the product/service usage (Gummesson, 2002; Grönroos, 2008). Hybrid offerings (Ulaga & Reinartz, 2011) accords with the integration of products and services into the offerings provided. This term is used to indicate that the value of products and services is greater when bundled than if they were purchased separately. Accordingly, it assumes that one plus one is greater than two. Table 2 presents the most commonly used terms to describe solutions; however, the contents do not form an exhaustive list but cover only the terms that often appear in the servitization literature. In this dissertation, the purest form, solution, is preferred but in the research articles specific terms may have been applied for technical reasons. To wrap up, a solution in this dissertation is defined as a combination of products, services, software, and knowledge provided by the manufacturer that solves specific problems or meets customer-specific needs.

Table 3. Types of solutions

Term Extract Source(s)

Integrated solutions

"The new model is about systems

integration and the provision of services"

"[integrated solutions] combine products and services into a seamless offering that addresses a pressing customer need

Davies, Brady & Hobday, 2006: 40;

Wise & Baumgartner, 1999:

138

Product-service systems (PSS)

"A Product-Service System (PSS) is an integrated combination of products and

services that deliver value in use" Baines et al., 2008: 554 Customer solutions "A solution is a customized and integrated

combination of goods and services for

meeting a customer’s business needs" Tuli et al., 2007: 1 Total solutions

(also turnkey solutions, plug &

play solutions)

"Industrial service providers should offer one-stop-shopping to their clients.

This implies a high degree of

customization and a “proactive” sensing of hardly explicit client specifications"

Antioco et al., 2008;

Matthyssens &

Vandenbempt, 1998: 346

Solutions offerings

"There is no unanimous and rigorous definition of solutions, but rather a number of often broad and generic descriptions that could be applied to a wide array of different offerings, if not generically"

Nordin & Kowalkowski, 2010: 441

Total customer solution

"An intimate and deep customer understanding and relationship that allows us to develop value propositions that bond to each individual customer"

Hax & Wilde, 2001: 382

Offerings "They [offerings] are bought by customers in order to assist them with a service that should create value for them"

Gummesson, 2002;

Grönroos, 2008: 301

Hybrid offerings/solutions

“[hybrid offerings are] one or more goods and one or more services, creating more customer benefits than if the good and service were available separately"

“hybrid solutions are products and services combined into innovative offerings”

Shankar, Berry & Dotzel, 2009: 95;

Ulaga & Reinartz, 2011: 5