Universidad Torcuato di Tella Mid Sweden University The Service Ecosystem S-D Logic Reflections upon Systems Theories and Service Research Robert F. Lusch Muzzy Chair in Entrepreneurship & Innovation University of Arizona Stephen L. Vargo Shidler Distinguished Professor of Marketing University of Hawaii June 9, 2010 Naples, Italy Università di Cassino Exchange Systems … G-D Logic: A Logic of Separation S-D Logic Producer Knowledgeable Innovative and Creative Produces /Creates Value Separation Experienced Consumer Inexperienced Unknowledgeable Passive/Dull Consumes/Destroys Value S-D Logic: A Logic of Togetherness S-D Logic Firm Cocreating Customer Sensing & Experiencing Sensing & Experiencing Creating Creating Integrating Resources Integrating Resources Learning Learning Cocreating Evolving Marketing Thought S-D Logic To Market Web Plumbing Marketing To Web 1.0 Retrieve & Read Marketing With Web 2.0 Co-Create Alexa Global Traffic Rankings S-D Logic Rank 2005 2008 2010 1 Yahoo.com Yahoo.com Google.com 2 Msn.com Google.com Facebook.com 3 Google.com Youtube.com Youtube.com 4 Ebay.com Live.com Yahoo.com 5 Amazon.com Facebook.com Live.com 6 Microsoft.com Msn.com Wikipedia.com 7 Myspace.com Myspace.com Baidu.com 8 Google.co.uk Wikipedia.org Blogger.com 9 Aol.com Blogger.com Msn.com 10 Go.com hi5.com qq.Com Ranking as of: (1) 12/31/05; (2) 11/24/08; (3) 5/16/10 Source: Alexa Global Traffic Rankings Emergent, Co-created, Resource Integrating, Dynamic S-D Logic WEB 1.0 WEB 2.0 Speak to Customer Conversation with Customer Customer is Passive Customer is Experiencing Customers Locate Content Customers Offered Service Push Messages Out Pull Customers In Standardized Mass Produced Messages Customized and Relevant Exchange of Messages Seller Control Ecosystem Control Service Ecosystems S-D Logic A service ecosystem is a spontaneously sensing and responding spatial and temporal structure of largely loosely coupled value proposing resource integrating social and economic actors interacting through institutions, technology and language to: Co-produce service offerings Exchange service offerings Co-create value EMERGENCE OF INTERNET S-D Logic Phase Transition S-D Logic A phase transition is a process where the characteristics of a given medium with given properties is transformed into a medium with new properties. PHASE TRANSITION LONG AND SMALL VIEW Universe expanding from an extremely dense and hot state. CAMBRIAN EXPLOSION HUMAN ARTIFACTS INTERNET Driving the Phase Transition Specialization Modula rization Communication Interactivity Transport Exchange Phase Transition to Ecosystems S-D Logic States Hierarchical Control Rigid Structures Centralized Management Defined Boundaries Secretive Closed Systems Produce & Store Optimizing Planning Flows Grounded Control Flexible Structure Distributed Management Fuzzy Boundaries Transparent Open System On-Demand Adaptive & Learning Improvising Phase Transition S-D Logic Market Conversation Place Dialogue STATES FLOWS Organization Ecosystem Phase Transition PUSH PULL Market Conversation Place Dialogue STATES FLOWS Organization GOODS Ecosystem SERVICE Phase Transition to Ecosystems: What it Means for Organizations Old Bureaucracy New Learning Factory Production Co-creation Platforms Innovation Platforms Integration Platforms R&D Labs Marketing Channels Pull and S-D logic Push and G-D logic S-D Logic No B2B, B2C, C2B, etc….. S-D Logic Resource Integrating Actor Resource Integrating Actor Resource Integrating Actors (RIA) S-D Logic Coordinate RIA Communicate Calculate Resource Integration & 3 C’s Calculation Language Behavior Coordination Meaning Thoughts Source: Loebler & Lusch Communication Signs Signifiers Resource Integrating Platforms Unified Communication Platforms Coordination Platforms RI Platforms Mobility Platforms Cloud Computing Platforms Universidad Torcuato di Tella S-D Logic Mid Sweden University Thank You! For More Information on S-D Logic visit: sdlogic.net We encourage your comments and input. Will also post: • Working papers • Teaching material • Related Links Steve Vargo: [email protected] Bob Lusch: [email protected] Some Definitions S-D Logic System = set of interacting or interdependent entities forming an integrated whole. Service = application of resources for the benefit of another actor (Vargo and Lusch 2004) Service System = A dynamic value co-creation configuration of resources, including people, organizations, shared information (language, laws, measures, methods) and technology, all connected internally and externally to other service systems by value propositions. (Spohrer et al.2007) Ecosystem = a system formed by the interaction of a community of actors in an environment that these actors through interaction create.