Purpose -The purpose of this paper is to advance the understanding of product-service systems (PSS). It uses a multiple method approach to analyse literature and cases and synthesise a framework for the understanding and investigation of PSS. It demonstrates the need to consider the "organisation" or network, of firms involved in defining, designing and delivering value through the PSS. This is conceptualised as a product-service-organisation (PSO). Design/methodology/approach -The paper uses three complementary methodologies: a road-mapping analysis, investigating industrial challenges for collaborating enterprises, a multidisciplinary literature review of PSS concepts and analysis of two cases. Findings -The paper finds that value can be most effectively delivered by networks of collaborating firms, integrating the products and services they offer to create the value which customers seek. In short, creating value requires the simultaneous design of product, service and organisation -the PSO triangle.Research limitations/implications -The paper offers a new classification of PSS related literature, drawing on a broad review of research in marketing, design and operations management related to service and PSS. The framework helps researchers understand the organisational challenges of PSS and provides suggested future research directions and questions. Practical implications -The framework provides the foundations for a process to develop PSS. It highlights the organisational challenges and suggests that a systematic yet iterative process can be devised to create and deliver value. This means defining customer value which can be profitably delivered; designing the PSS to create this value and identifying the required capabilities; and finally creating and managing the network of partners responsible for delivering value. Originality/value -The major contribution is a link between the emerging PSS literature and previous research on virtual enterprises and other types of organisational networks. The paper argues that PSS often creates the need to identify and access capabilities through a collaborative network. This is conceptualised in the PSO triangle.

This paper presents results from a project entitled 'MArket Demands that Reward Investment in Design' (MADRID). Among other aims, MADRID seeks to identify the contribution of design and innovation to product competitiveness in different markets.The paper provides a conceptual analysis of the role of design and innovation in product competition. The concepts are employed to conduct an analysis of a sample of new and redesigned products using data from a previous study on the 'Commercial Impacts of Design' (CID). CID was a study of over 220 design and product development projects in British SMEs which had received government financial support for design.The key conclusions from this reanalysis of the CID data are:• In commercially successful product development projects more attention had been paid than in the lossmaking projects to genuine product improvements rather than just styling or costs.• Commercially successful product development projects involved a multidimensional approach to design with a focus on product performance, features and build quality and, where relevant, technical or design innovation. Lossmaking projects tended to involve a narrow, often stylingoriented, approach to design with more attention paid to cost reduction than to performance, quality and innovation.

There is a growing recognition of the opportunities of innovation through experience staging. The literature, however, tends to focus on high-profile examples of firms from largely hedonic sectors, such as entertainment and hospitality. These cases provide vivid and persuasive examples, but they fail to address how firms outside these sectors can join the experience economy-a term coined in 1998 by Pine and Gilmore-by developing new products and services with experiences at their core. The paper reports on two studies undertaken to examine why firms that do not belong to sectors that are largely hedonic innovate through experience staging and how they benefit from doing so. The first study is an in-depth case study of 15 diverse firms, which examines these firms' motives for pursuing innovation through experience staging. The second study is a two-year longitudinal quantitative survey of 131 small-and medium-sized firms (SMEs) to address the question of the benefits that firms that do not have strong brands can gain by from innovation through staging experiences.The first study provides the basis for classifying firms along two dimensions depending on the nature of the new products or services (referred to collectively as offerings) they create. The first dimension has to do with whether new offerings have a functional or experiential core. The second dimension has to do with the degree of experiential augmentation applied to offerings. The first study suggests that firms adopt an experience-staging strategy to innovation based on both outward-facing and inward-facing motives. The outward-facing motives include improving a firm's image in its market, entering new markets, and attracting new customers. The inward-facing motives include improving a firm's attractiveness to employees and increasing profitability.The results of the second study suggest that creating offerings with an experiential core can contribute to success by enhancing a firm's image, its attractiveness to employees, and its ability to enter new markets. Moreover, experiential augmentation contributes to profitability, new customer attraction, and employee attractiveness. This research has important implications for theory and practice. In the first place, this research extends existing theory about experience staging to firms outside sectors that are largely hedonic. In the second place, the managerial implications are that innovation through experience staging can be an effective way for SMEs, even those outside industries, such as entertainment or hospitality, to create competitive advantage.

Purpose The purpose of this paper is to identify service design strategies to improve outcome-oriented services by enhancing consumers’ emotional experience, while overcoming customer variability. Design/methodology/approach An abductive, multiple-case study involves 12 service firms from diverse online and offline service sectors. Findings Overall, six service design strategies represent two overarching themes: customer empowerment can involve design for typical customers, visibility, and community building, while customer accommodation can involve design for personas, invisibility, and relationship building. Using these strategies helps set the stage for a service to offer an emotional experience. Research limitations/implications The study offers a first step toward combining investigations of service experience and user experience. Further research can strengthen these links. Practical implications The six design strategies described using examples from case research offer managerial recommendations. In particular, these strategies can help service managers address the customer-induced variability inherent in services. Originality/value Extant studies of experience staging have focused on particular sectors such as hospitality and leisure; this study contributes by investigating outcome-focused services and identifying strategies to create unique experiences that offset variability. It also represents a rare effort to combine research from service management and interaction design, shedding light on the link between service experience and user experience.

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