Matching value propositions with varied customer needs: The role of service modularity

Abstract

Organizations seek to manage varied customer segments using varied value propositions. The ability of a knowledge‐intensive business service (KIBS) provider to formulate value propositions into attractive offerings to varied customers becomes a competitive advantage. In this specific business based on often highly abstract service offerings, this requires the provider to have a clear overview of its knowledge and resources and how these can be configured to obtain the desired customization of services. Hence, the purpose of this paper is to investigate how a KIBS provider can match value propositions with varied customer needs utilizing service modularity. To accomplish this purpose, a qualitative multiple case study is organized around 5 projects allowing within‐case and cross‐case comparisons. Our findings describe how through the configuration of knowledge and resources a sustainable competitive advantage is created through creating the right kind of value propositions for varied customers with the help of modularity. Understanding gained through this research helps KIBS organizations in their efforts to increase organizational effectiveness through modular services.

Constructing customer knowledge in knowledge‐intensive customer relationships

“…Both case firms emphasized understanding what is relevant for customers and the potential for customization, which are mentioned also in the literature (Heikka et al, 2018; Ritala et al, 2013). This study noted that it is important to make firm‐specific customization according to customer needs based on constructed customer knowledge.…”

“…Most importantly, collaboration alongside increasing customer knowledge capital provides for the firm a more detailed understanding of the customer's needs (Dörner, Gassmann, & Gebauer, 2011), which is particularly important since knowledge‐intensive business services are typically customized to fit the specific needs of the customers (Heikka, Frandsen, & Hsuan, 2018). Since customer knowledge is an important source of competitive advantage, firms should construct valuable customer knowledge to be able to improve their relationship with the customer in every type of customer relationship from new to established ones (Tseng & Wu, 2014) and to customize their offering based on customer needs (Heikka et al, 2018).…”

The role of information systems and knowledge codification for service provision strategies

“…A case research methodology (Yin, 2002) was chosen as the phenomena was to be examined in its natural context (Darke et al , 1998) and where clarification rather than measurement was sought (Riege and O'keeffe, 2007) regarding the nature of standardisation, customisation, modularity and their interaction with technology over time. Case studies are widely used to examine service delivery strategies (Nordin et al , 2011; Heikka et al , 2018; Pohjosenpera et al , 2019), with exploratory case studies for service modularity at an early stage of development (Carlborg and Kindstrom, 2014). Appropriate when examining human action and interpretations around using information systems (Walsham, 1995) cases have been used to explore knowledge codification and dissemination (Hazlett et al , 2008).…”

“…(Silander et al , 2017) chose polar or contrasting cases to discover pertinent conditions in different circumstances. Similarly, Heikka et al (2018) chose extreme project examples to enable a deeper analysis while (Pohjosenpera et al , 2019) examined multiple case studies of four different kinds of hospitals to examine modularity in each. This study chose three contrasting cases of companies involved in each of the three service strategies being investigated (Table 1).…”

The Impact of Coproducing Services with Clients on Knowledge-Intensive Business Services’ Innovativeness

“…(Baltova & Baltov, 2017). It means that KIBS' competitive advantage is strongly connected to their opportunity to develop those service offerings or value propositions that are tailored to the current needs of their customers (Heikka et al, 2018). At the same time, most of the information required for the effective problem solving by KIBS retains by the customer (Mustak, 2019).…”