Service System Modelling Workshop, Manchester Business School, 9/20/2011

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Service System Modelling Workshop, Manchester Business School, 9/20/2011

  1. 1. Constructing Effective Value Propositions for Stakeholders in Service System Networks<br />Dr. Stephen K. Kwan<br />Professor, Service Science<br />Management Information Systems<br />College of Business Administration<br />San José State University, CA, USA<br />http://www.sjsu.edu/ssme<br />Contact: stephen.kwan@sjsu.edu<br />MercèMüller-Gorchs<br />Karlsruhe Service Research Institute<br />Karlsruhe Institute of Technology<br />Karlsruhe, Germany<br />Presented at the Service System Modeling Workshop<br />Manchester Business School, September 20th, 2011, Manchester, UK.<br />Download these slides at: http://www.slideshare.net/StephenKwan<br />
  2. 2. Service System Worldview1<br />Service<br />Provider<br />Customer<br />Service<br />Experience<br />A Service System and Its Entities<br />1Kwan, S. K. & Min, J. H. (2008) “An Evolutionary Framework of Service Systems”. <br />Presented at the International Conference on Service Science, Beijing, China, April 17-18.<br />Kwan & Müller-Gorchs 2011<br />2<br />
  3. 3. Service System Worldview<br />Employees &<br />Stockholders<br />Community<br />Service<br />Provider<br />Customer<br />Service<br />Experience<br />Partners<br />Competition<br />Service System<br />Society<br />Kwan & Müller-Gorchs 2011<br />3<br />
  4. 4. Value Co-Creation Through Value Propositions<br /> Value<br />Employees &<br />Stockholders<br />Community<br />Service<br />Provider<br />Customer<br />Value<br />Value<br />Value<br />Service<br />Experience<br />Partners<br />Competition<br />Service System<br />Governance<br />Society<br />Kwan & Müller-Gorchs 2011<br />4<br />
  5. 5. Stages in Customer Empowerment<br />in Value Co-Creation<br />Stage 1: Value Chain<br />Value Proposition<br />Customer<br />Service<br />Provider<br />Focal<br />Relationship<br />Service<br />Experience<br />5 Kwan, S. K. & Yuan, S. T. ”Customer-Driven Value Co-Creation in Service Networks”, to appear in Demirkan, H., Spohrer, J.C. and Krishna, V. ed., The Science of Service Systems, volume in Service Science: Research and Innovation (SSRI) in the Service Economy series, Springer, 2010.<br />Kwan & Müller-Gorchs 2011<br />5<br />
  6. 6. Customer Driven Service Value Network<br />Value Proposition<br />Service<br />Provider<br />Customer<br />Focal<br />Relationship<br />Value Proposition<br />Value Proposition<br />Provider Partner<br />Network<br />Customer’s<br />Social<br />Network<br />Service<br />Experience<br />Kwan & Müller-Gorchs 2011<br />6<br />
  7. 7. 7<br />Kwan & Müller-Gorchs 2011<br />Value Systems and Value Dimensions<br />Provider’s Value System<br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br />Opportunities for<br />Value Co-Creation<br /><br /><br /><br /><br />Customer’s <br />Value System<br />★<br />★<br />★<br />★<br />★<br />★<br />★<br />★<br />His Customer’s Value System<br />
  8. 8. Variety of Value Propositions<br />Maslow’s<br />Hierarchy<br />Of Needs<br />Value Dimensions<br />Service Provider<br />Society<br />Community<br />Employees<br />Stockholders<br />Partners<br />Customers<br />Intrinsic<br />Hedonic<br />Spiritual<br />Corporal<br />Emotional<br />Intellectual<br />Social<br />Societal<br />Environmental<br />Political<br />Stakeholders<br />Economic<br />A point in this 3-D space is a Potential Value Proposition<br />1<br />2<br />4<br />3<br />Stages of Customer Empowerment<br />Kwan & Müller-Gorchs 2011<br />8<br />
  9. 9. Kwan & Müller-Gorchs 2011<br />Maslow’s Hierarchy of Needs<br />Disposable <br />Income &<br />Desire for<br />Services<br />Needs<br />vs.<br />Wants<br />9<br />
  10. 10. 10<br />Kwan & Müller-Gorchs 2011<br />Foundational Premises of Service Dominant Logic<br />Microeconomic<br />Considerations<br />
  11. 11. 11<br />Kwan & Müller-Gorchs 2011<br />Constructing a Value Proposition<br />The Customer have a lot of VP’s to choose from<br />Quality<br />Probability of Success<br />Costs<br />Benefits<br />Service Experience<br />
  12. 12. 12<br />Kwan & Müller-Gorchs 2011<br />A Customer’s Choice of Service<br />A Service Provider’s Promised Value:<br />Based on the Customer’s own expectations<br />A Customer’ Choice Function:<br />
  13. 13. 13<br />Kwan & Müller-Gorchs 2011<br />A Customer’s Realization of Value<br />A Customer’s Realized Value:<br />Co-Production Service Process<br />Co-Creation of Value<br />Service Provider and<br />His Partners’ Contributions<br />Customer’s Contributions<br />
  14. 14. 14<br />Kwan & Müller-Gorchs 2011<br />Constructing Value Propositions:<br />Customers and Service Providers<br />Connecting Components of a Value Proposition to a Service Provider’s KPI’s through Feedback<br />
  15. 15. 15<br />Kwan 2011<br />Value Proposition Model (VPM)<br />Starting with the Service System<br />Service<br />Provider<br />Customer<br />Service<br />Experience<br />
  16. 16. 16<br />Kwan 2011<br />VPM – a common example<br />Service<br />Provider<br />Customer<br />Value Proposition<br />Customer<br />Service<br />Experience<br />Service<br />Experience<br />Customer<br />Service<br />Experience<br />
  17. 17. 17<br />Kwan 2011<br />VPM – individuals and community<br />Service<br />Provider<br />Customer<br />Value Proposition<br />Community/<br />Social<br />Network<br />Customer<br />A Shared<br />Experience<br />Service<br />Experience<br />Service<br />Experience<br />Customer<br />Service<br />Experience<br />
  18. 18. 18<br />Kwan 2011<br />VPM – individuals and Facebook community<br />Service<br />Provider<br />Customer<br />Value Proposition<br />Community/<br />Social<br />Network<br />Customer<br />A Shared<br />Experience<br />Service<br />Experience<br />Service<br />Experience<br />Customer<br />Service<br />Experience<br />
  19. 19. 19<br />Kwan 2011<br />VPM – service provider partners<br />Service<br />Provider<br />Customer<br />Value<br />Proposition<br />Customer<br />Service<br />Experience<br />Service<br />Experience<br />Service<br />Experience<br />Service<br />Experience<br />Vendor<br />Value Proposition<br />
  20. 20. 20<br />Kwan 2011<br />VPM – partner’s acquistion of customer<br />Service<br />Provider<br />Customer<br />Customer<br />Service<br />Experience<br />Service<br />Experience<br />Service<br />Experience<br />Service<br />Experience<br />Vendor<br />Service<br />Experience<br />
  21. 21. 21<br />Kwan 2011<br />Example 1 of 4<br />Service<br />Provider<br />Customer<br />Customer<br />Service<br />Experience<br />Service<br />Experience<br />Service<br />Experience<br />Service<br />Experience<br />Vendor<br />
  22. 22. 22<br />Kwan 2011<br />Example 2 of 4<br />Service<br />Provider<br />Customer<br />Customer<br />Service<br />Experience<br />Service<br />Experience<br />Service<br />Experience<br />Service<br />Experience<br />Service<br />Experience<br />Vendor<br />Vendor<br />Service<br />Experience<br />
  23. 23. 23<br />Kwan 2011<br />Example 3 of 4<br />Service<br />Provider<br />Customer<br />Customer<br />Service<br />Experience<br />Service<br />Experience<br />Service<br />Experience<br />Service<br />Experience<br />Service<br />Experience<br />Vendor<br />Vendor<br />Service<br />Experience<br />
  24. 24. 24<br />Kwan 2011<br />Example 4 of 4<br />Service<br />Provider<br />Customer<br />Customer<br />Service<br />Experience<br />Service<br />Experience<br />Service<br />Experience<br />Service<br />Experience<br />Vendor<br />Service<br />Experience<br />
  25. 25. 25<br />Kwan & Müller-Gorchs 2011<br />Example: E-Commerce<br />Customer<br />Amazon.com<br />Bookcloseout_us<br />theBookGrinder<br />nengland4<br />
  26. 26. VP0<br />SE<br />Se0<br />Amazon.com<br />SP0<br />S0<br />Se1<br />Bookcloseout_us<br />SP1<br />SP4<br />S1<br />S4<br />Customer<br />Se2<br />theBookGrinder<br />SP2<br />S2<br />S5<br />Se3<br />negland4<br />SP3<br />S3<br />S6<br />26<br />Kwan & Müller-Gorchs 2011<br />
  27. 27. 27<br />Kwan & Müller-Gorchs 2011<br />Example: Social Service<br />London Borough of Sutton<br />Service Provider<br />Customer<br />Safer Sutton<br />Service<br />Partnership<br />LBS<br />Community<br />VP0<br />Quality of Life<br />Improvement<br />Service<br />Service Experience<br />
  28. 28. 28<br />Kwan & Müller-Gorchs 2011<br />Example: Social Service<br />London Borough of Sutton<br />SSPS – Coordinator Role<br />LBS Council<br />MPS<br />Fairer<br />Service<br />Components<br />Quality of Life<br />Improvement<br />Service<br />Customer<br />VP0<br />Partners<br />LBS<br />Community:<br />Residents &<br />Businesses<br />VP1<br />Greener<br />Service<br />Components<br />Sutton Police<br />Partnership<br />VP2<br />Safer <br />Transport<br />Team<br />Safer<br />Service<br />Components:<br />Prevent<br />Assist<br />Reduce<br />Improve<br />Partnership<br />VP3<br />Safer Park<br />Teams<br />Partnership<br />VP4<br />Safer<br />Neighborhood<br />Teams<br />Partnership<br />VP5<br />Sutton<br />Neighborhood<br />Watch<br />Association<br />Partnership<br />
  29. 29. 29<br />Kwan & Müller-Gorchs 2011<br />Future Directions<br /><ul><li>More on development of Value Dimensions and Measurement
  30. 30. More on connecting VPM with Service Provider’s KPI
  31. 31. More on Quality Dimensions and Measurement
  32. 32. Integrate VPM with Service System Design
  33. 33. Integrate VPM with Service System Prototyping</li></ul>Framework Service System <br />& Networks<br />Foresight and Innovation Method<br />Value Propositions<br />& Service Patterns<br />© Cockayne and Carleton<br />29<br />Kwan & Müller-Gorchs 2011<br />
  34. 34. Constructing Effective Value Propositions for Stakeholders in Service System Networks<br />Dr. Stephen K. Kwan<br />Professor, Service Science<br />Management Information Systems<br />College of Business Administration<br />San José State University, CA, USA<br />http://www.sjsu.edu/ssme<br />Contact: stephen.kwan@sjsu.edu<br />MercèMüller-Gorchs<br />Karlsruhe Service Research Institute<br />Karlsruhe Institute of Technology<br />Karlsruhe, Germany<br />End<br />Presented at the Service System Modeling Workshop<br />Manchester Business School, September 20th, 2011, Manchester, UK.<br />Download these slides at: http://www.slideshare.net/StephenKwan<br />
  35. 35. Kwan & Müller-Gorchs 2011<br />31<br />
  36. 36. 32<br />Stages in Customer Empowerment<br />in Value Co-Creation<br />Stage 1: Value Chain<br />Value Proposition<br />Customer<br />Service<br />Provider<br />Focal<br />Relationship<br />Service<br />Experience<br />5 Kwan, S. K. & Yuan, S. T. ”Customer-Driven Value Co-Creation in Service Networks”, to appear in Demirkan, H., Spohrer, J.C. and Krishna, V. ed., The Science of Service Systems, volume in Service Science: Research and Innovation (SSRI) in the Service Economy series, Springer, 2010.<br />Kwan 2011<br />
  37. 37. 33<br />Stage 2: Traditional Service Value Network<br />Value Proposition<br />Customer<br />Service<br />Provider<br />Focal<br />Relationship<br />Provider Partner<br />Network<br />Service<br />Experience<br />Value Proposition<br />cf. ICT-enabled service networks,<br />mobile applications, etc.<br />Kwan 2011<br />
  38. 38. Stage 3 – Improved Value Chain<br />Value Proposition<br />Customer<br />Service<br />Provider<br />Focal<br />Relationship<br />Value Proposition<br />Customer’s<br />Social<br />Network<br />Service<br />Experience<br />Kwan 2011<br />
  39. 39. Stage 4: Customer Driven Service Value Network<br />Value Proposition<br />Service<br />Provider<br />Customer<br />Focal<br />Relationship<br />Value Proposition<br />Value Proposition<br />Provider Partner<br />Network<br />Customer’s<br />Social<br />Network<br />Service<br />Experience<br />cf. “Resource Integrators” in Service Dominant Logic literature<br />Kwan 2011<br />
  40. 40. 36<br />Kwan & Müller-Gorchs 2011<br />Illustration of Service Co-production<br />Customer<br />Service Components<br />Co-produced by<br />Customer<br />Service Experience<br />Made up of<br />Observable or<br />Evidential<br />Components<br />S1 =<br />S2 =<br />Service Components<br />Co-produced by<br />Service Provider<br />Service<br />Provider<br />
  41. 41. 37<br />Kwan & Müller-Gorchs 2011<br />Illustration of Value Co-creation<br />Customer<br />Value<br />/ c1<br />V = Σ<br />+<br />/ c2<br />+<br />Value<br />Service<br />Provider<br />
  42. 42. 38<br />Kwan & Müller-Gorchs 2011<br />Service Pattern 1 – Single Service Episode<br />Customer<br />Instantiation<br />of the Service<br />Experience at a<br />particular point <br />In time<br />VP0<br />SE0<br />Focal<br />Relationship<br />Time<br />SP0<br />SE0 = Service Experience provided by SP0<br />SP0 = Service Provider of the Focal Relationship<br /> (the basis of the Value Proposition from Kwan & Yuan 2011)<br />VP0 = Value Proposition offered by SP0 to Customer for SE0<br />
  43. 43. 39<br />Kwan & Müller-Gorchs 2011<br />Pattern 2 – Continuous Service over a Period of Time<br />Customer<br />VP0<br />SE0<br />Time<br />SP0<br />
  44. 44. 40<br />Kwan & Müller-Gorchs 2011<br />Service Pattern 3 – Service in Parallel<br />Customer<br />VP0<br />Se0<br />Se1<br />Se2<br />Time<br />SP2<br />SP1<br />SP0<br />Instantiation of the Service<br />Experience at a particular point <br />In time<br />
  45. 45. 41<br />Kwan & Müller-Gorchs 2011<br />Pattern 3 – Continuous Service with Occasional Service Episodes<br />Customer<br />VP0<br />Se2<br />Se1<br />Se0<br />Time<br />SP0<br />
  46. 46. 42<br />Kwan & Müller-Gorchs 2011<br />Pattern 4 – Service provided by more than one Partner Service Providers<br />Customer<br />VP0<br />SE2<br />SE1<br />SE3<br />SE0<br />Time<br />SP3<br />SP1<br />SP2<br />SP0<br />VP1<br />SE4<br />VP3<br />SE6<br />VP2<br />SE5<br />

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