Value Cocreation in Service Platform Business Models

Abstract

This conceptual paper aims to connect the concept of service platform business models to current theories in service science. The paper does this by first dividing the business models into four types according to their combinations of investments in front-end information and communications technology (ICT) and in interfirm collaboration, and second, by introducing a model of capability-based value cocreation. The model serves to explain the value creation logics of different service platform business models. Based on the service cases, the causal mechanisms between the core actors in value cocreation are explicated. It furthermore becomes clear that banking and retail services have gone through a transformation from a customer service platform business model towards closed and open models. The case drawn from the video game industry illustrates value cocreation in a service platform complementor model. The results suggest that an open service platform business model involves high levels of interaction among the actors in the value system, and that the locus of value creation lies with the end user, enabled by flexible front-end ICT. One managerial implication of this is that the capability-based value cocreation model can be used as a tool to gather and classify information on the basis of which new services can be designed.

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