Constructing Effective Value Propositions for Stakeholders in Service System Networks

The concept of value co-creation is a fundamental theme of Service-Dominant Logic, which has been an important theme of current research thinking in service science. This concept has become more complex since more and more service systems are configured as service networks with a concomitant increase in the number and interaction of stakeholders. Single provider service systems are becoming more rare as globalization and technological advances are changing revenue sources and business models. The purpose of this research is to develop a conceptual model for constructing effective value propositions for stakeholders in the design of service system networks. This Value Proposition Model (VPM) will take an approach that considers both the stakeholders (esp. the customer) and the provider’s perspectives in value determination. The model will be useful in the development of the business model for a service system in ensuring that the value systems of the stakeholders are taken into consideration. The success of the service system will depend on how this stakeholder perspective is taken from the customer-facing aspect of the front stage to the technical implementation in the back stage. In the following we will develop the model using the customer as the prime stakeholder. The applicability of the model to value propositions for other stakeholders will also be demonstrated.