Product-enabled service development has been identified as one of the potential sources for sustainable growth and competitiveness of firms in advanced economies. Many firms are in the process of shifting their focus from offering standalone products or services towards integrated offerings of products and services to meet specific customer demands, thus generating additional value. This paper examines technology-based start-ups’ attitude towards the development of hybrid offerings as part of their business differentiation and positioning strategies. The main research question is answered within the context of Danish technology-based start-up firms by adopting a case study based qualitative research approach. Five explorative case studies, of in total four different start-ups and one larger firm used as reference case, have been composed to examine the challenges associated with the development of product-enabled services as part of an integrated value proposition. The research findings indicate an insufficient approach towards hybrid offerings where start-ups initially focus on products or services, but not as an integrated hybrid solution. This decoupled approach seems to be linked to the fact that start-ups have limited human and financial resources that is often combined with lacking business and commercialization knowledge. The screening criteria from the new venture funding organisation appear to be very much product focused, as the tangibility of the products, as compared to services, makes it easier to make selection decisions. By basing their selection criteria on a customerdominant logic, the funding organisation can better support start-ups to embark onto the right competitive path from the very beginning. This would help the start-ups in the design and development of integrated hybrid offerings and avoiding the pitfalls of a fragmented “product first and then service” strategy.
Product-enabled services; hybrid solutions; business differentiation
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19th International Product Development Managementnference, 2012