Some Thoughts on Value Propositions and Service Patterns

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For Visitors from Korea to IBM Almaden Lab October 19th, 2011

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Some Thoughts on Value Propositions and Service Patterns

  1. 1. Some Thoughts on Value Propositions<br />and Service Patterns<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 />For Discussion with Visitors from Korea at IBM Almaden<br />October 19, 2011<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. 4<br />Kwan & Müller-Gorchs 2011<br />Service System Worldview<br />Service Management<br />Fitzsimmons & Fitzsimmons<br />Employees &<br />Stockholders<br />Capacity<br />& Manpower<br />Planning,<br />Training <br />Community<br />Service<br />Provider<br />Customer<br />Facility<br />Location<br />& Design<br />Service<br />Experience<br />Partners<br />Social<br />Networking<br />Competition<br />Competitive<br />Strategy<br />Service<br />Concept<br />Realized<br />Customer<br />Flow &<br />Service<br />Delivery<br />Market<br />Segmentation<br />Operating<br />Strategy<br />Society<br />4<br />
  5. 5. 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 />5<br />
  6. 6. 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 />* Should be accompanied by a “Schema & Rules ” – behavior expectations<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 />6<br />
  7. 7. 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 />7<br />
  8. 8. 8<br />Kwan & Müller-Gorchs 2011<br />Foundational Premises of Service Dominant Logic<br />Microeconomic<br />Considerations<br />
  9. 9. 9<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 />FP8<br />His Customer’s Value System<br />
  10. 10. 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 />Cultural<br />Corporal<br />Emotional<br />Intellectual<br />Familial….<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 />FP10<br />Kwan & Müller-Gorchs 2011<br />10<br />
  11. 11. 11<br />Kwan & Müller-Gorchs 2011<br />Constructing a Value Proposition<br /> Metrics<br /> Rules<br /> Schema<br />Quality<br />Probability of Success<br />Costs<br />Benefits<br />Service Experience<br />The Customer have a lot of VP’s to choose from<br />Service Level Agreement?<br />FP7<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 />An Example<br />FP6<br />Service Provider and<br />His Partners’ Contributions<br />Customer’s Contributions<br />FP9<br />
  14. 14. 14<br />Kwan & Müller-Gorchs 2011<br />Constructing Value Propositions:<br />Customers and Service Providers<br />Sc,R,M<br />too<br />Connecting Components of a Value Proposition to a Service Provider’s KPI’s through Feedback<br />
  15. 15. Kwan & Müller-Gorchs 2011<br />Example: Social Network<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 />15<br />
  16. 16. 16<br />Kwan & Müller-Gorchs 2011<br />Example: E-Commerce<br />Customer<br />Amazon.com<br />Bookcloseout_us<br />theBookGrinder<br />nengland4<br />
  17. 17. 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 />17<br />Kwan & Müller-Gorchs 2011<br />
  18. 18. 18<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 />
  19. 19. 19<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 />
  20. 20. 20<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 />
  21. 21. 21<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 />
  22. 22. 22<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 />
  23. 23. 23<br />Kwan & Müller-Gorchs 2011<br />Future Directions<br /><ul><li> More on development of Value Dimensions and Measurement
  24. 24. More on connecting VPM with Service Provider’s KPI
  25. 25. More on Quality Dimensions and Measurement
  26. 26. Integrate VPM with Service System Design and Prototyping</li></ul>Integrate with<br />Foresight and Innovation Method<br />© Cockayne and Carleton<br />23<br />Kwan & Müller-Gorchs 2011<br />
  27. 27. Kwan & Müller-Gorchs 2011<br />Service System Framework<br />& Service System Networks<br />Foresight and Innovation Method<br />Value Propositions<br />& Service Patterns<br />© Cockayne and Carleton<br />Kwan & Müller-Gorchs 2011<br />24<br />
  28. 28. 25<br />Kwan & Müller-Gorchs 2011<br />Service System Framework<br />& Service System Networks<br />Foresight and Innovation Method<br />© Cockayne and Carleton<br />Process<br />Chain<br />Network<br />Diagram<br />UI Prototyping<br />UML – Use Cases<br />Value Propositions<br />& Service Patterns<br />BPMN<br />Work<br />System<br />MANGA <br />Service Blueprint<br />Story Boards<br />25<br />Kwan & Müller-Gorchs 2011<br />
  29. 29. Some Thoughts on Value Propositions<br />and Service Patterns<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 />For Discussion with Visitors from Korea at IBM Almaden<br />October 19, 2011<br />Download these slides at: http://www.slideshare.net/StephenKwan<br />

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