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School of Business | Department of Management and International Business | Organization and Management | 2013
Thesis number: 13397
Business models for product life extension
Author: Määttä, Marika
Title: Business models for product life extension
Year: 2013  Language: eng
Department: Department of Management and International Business
Academic subject: Organization and Management
Index terms: organisaatio; organization; johtaminen; management; liiketalous; business economics; mallit; models; tuotteet; products; ikä; age; elinkaari; life cycle; suunnittelu; planning; palvelut; service
Pages: 84
Full text:
» hse_ethesis_13397.pdf pdf  size:2 MB (1803755)
Key terms: business models; product life extension; planned obsolescence
Products are being used for shorter and shorter times, which causes environmental degradation and an increasing scarcity of natural resources. On the other hand, businesses face pressure to succeed in the highly competed global market. This master's thesis aims to show, how businesses could manufacture or use longer lasting products and be profitable at the same time - the objective of this thesis is to find out, how business models could enable the extension of product lifespans.

The literature review of this thesis presents the background of planned obsolescence, a phenomenon which has led people to ask, why products no longer last. Whether it is physical or technological obsolescence, consumers can or will not use products as long as they used to. Also previous research around the business model concept and sustainable business models is discussed. The reasoning behind what makes a business model a good unit for analyzing product life extension is explained in the methodology section. The empirical part of this thesis focuses especially on what the characteristics of such business models are that have made product life extension possible.

This research is conducted as a multiple case study, in which altogether five different business models from different industries act as the case studies. The data is collected from multiple sources: two semi-structured interviews are conducted, and secondary data from e.g. company websites, newspapers and government institutions' websites is collected. The data is analyzed according to three business model features: value proposition, revenue model and customer interface. Afterwards the features of the case business models are compared to those of their competitors.

The research indicates that there are numerous factors that influence the success of business models which extend product lifespans. On the basis of the case study it can be concluded that such factors as ageless and aesthetic product design, efficiency and experience in running a service supply chain, offering a service instead of a product (servitization), powerful brand stories, reuse and recycling of products and materials, and warranty as a quality promise can help companies in producing and using longer lasting products, as well as in profiting from them. Nevertheless, the suitability of these factors may be industry and even business specific.

Moving to a more service-centered way of consumption could offer a solution to the environmental problems and scarcity of resources we are facing on the planet. Servitization seems to work especially for B2B types of companies, but product-service systems for consumers seem to be more difficult to achieve. The cooperation of businesses, consumers and governments is needed in order to be able to use and produce longer lasting products.
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