The Service Dominant Business Model:
A Service Focused Conceptualization
Egon Lüftenegger, Marco Comuzzi, Paul Grefen, Caren Weisleder
Beta Working Paper series 402
BETA publicatie
ISBN
ISSN
NUR
Eindhoven
WP 402 (working
paper)
982
January 2013
The Service Dominant Business Model:
A Service Focused Conceptualization
Egon Lüftenegger1 , Marco Comuzzi1 , Paul Grefen1 , and Caren Weisleder2
1 School
of Industrial Engineering , Eindhoven University of Technology
2 De Lage Landen International B.V.
Eindhoven, The Netherlands, January, 2013
Abstract
Existing approaches on business model tools are constrained by the goods
dominant way of doing business. Nowadays, the shift from goods based approaches towards a service dominant strategy requires novel business model
tools specially focused for service business. In this report we present the service dominant business model: a business model conceptualization and tool to
design and analyze business models for the service dominant business landscape.
1
Contents
1 Introduction
1.1 Context . . .
1.2 Contribution
1.3 Approach . .
1.4 Structure . .
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2 Business model conceptualizations
2.1 The business model concept across different academic research
areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.2 Business model representations as ontologies . . . . . . . . . . .
2
2
4
4
5
6
6
7
3 The Business Model Ontology
9
3.1 The Business Model Ontology as a tool: The business model canvas 9
3.2 Business Model Ontology and its construction method . . . . . . 10
4 Pillars of the Service Dominant Business Model
13
4.1 Pillars Construction Process . . . . . . . . . . . . . . . . . . . . . 13
4.2 Application of the Pillar Construction Process . . . . . . . . . . . 14
5 Elements of the Service Dominant Business Model
17
5.1 Elements Construction Process . . . . . . . . . . . . . . . . . . . 17
5.2 Application of the Elements Construction Process . . . . . . . . 18
6 The Service Dominant Business Model
29
6.1 Presenting the Service Dominant Business Model . . . . . . . . . 29
6.2 Key questions of the Service Dominant Business Model . . . . . 30
7 Visualizing the Service Dominant Business Model as a Radar
31
7.1 Visualization Approach . . . . . . . . . . . . . . . . . . . . . . . . 31
7.2 Visualizing the SDBM Pillars . . . . . . . . . . . . . . . . . . . . . 32
8 Using the Radar to analyze Spotify
34
9 Conclusions
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Introduction
The world is becoming service dominant because of the increasing importance
of services in the world’s most advanced economies. The service sector is
becoming the dominant economic activity in advanced countries by accomplishing more than the 70% of their gross domestic product (GDP). However,
most of our knowledge has been developed by a manufacturing based economy. Moreover, this economic shift is pushing academic world and industry to
know more about services [1].
The service dominance in the economic activity is being known in the literature as the service economy. The service economy can be seen as a result of the
advancement on Information and Communication Technologies (ICT) by enabling solutions that were not possible before. In this scenario goods are still
relevant, however the value focuses on the usage of the good and the benefits
that provides: the service [2], [3].
In many disciplines researches are reframing towards service to fill the
knowledge gap. Our interest is on reframing the business model concept into
the service context due to the increasing importance of service businesses and
the raise of the service economy. Furthermore, business models based on service are important to let goods-dominant organizations evolve into servicedominant enterprises. However, the appropriate business models tools focused
on service do not exist today. Moreover, business practitioners use goods based
frameworks that are not specifically designed for the service domain [1], [2].
In this report we focus on reframing the business model concept in the
service domain as the Service Dominant Business Model. We contribute to the
business model research and the development of Service Science by integrating
the service dominant and business model perspectives.
1.1
Context
Service science, management, engineering and design (SSMED) known as Service Science is an interdisciplinary field to foster service innovation.
Our interdisciplinary vision in Service Science is being developed by the
Service Dominant Business framework. The framework integrates the component based approach of business services and their composition with business
models and business strategy.
SD business S •  strategy SD business BM •  models Service SC •  composi9ons •  Business BS services Figure 1: The Service Dominant Business Framework
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In Figure 1, we present the Service Dominant Business framework as a four
layer approach: Service Dominant Strategy, Service Dominant Business Models, Service Compositions, and Business Services. In [4], we present the Service
Dominant Strategy Canvas [5] as the outcome of the first layer: the strategy.
In this report, we focus on the development of the second layer: the business
model.
Business Models Service Science Value Appropia)on Value Crea)on Service Systems Figure 2: Relationship between Business Models and Service Science
In this report we explore the intersection between business model research
and Service Science for the development of the Service Dominant Business
Model concept. The interdisciplinary perspective between Service Science and
business models is given by the value creation concept present in both academic fields. In Figure 2, we visualize this intersection between business model
research and Service Science. Firstly, within the left circle we illustrate the
business model research as being focused on value appropriation and value
creation concepts. Secondly, on the right side circle, we represent Service Science research as focused on value creation and Service Systems. Service Systems are defined as co-production configurations of people, technology and
other internal and external service systems and shared information. The recursive definition of Service Systems highlights the internal and external infrastructure where participants co-produce value with other service systems [6].
As shown in Figure 2, the intersection point between the business model
concept and Service Science is on value creation. We take the innovating perspective on value from Service Science which is based on Service Systems. This
intersection of concepts is done at syntactical level only, because in Service Science the notion of value differs from the traditional value creation perspective.
Value creation in business model literature usually is related with manufacturing process, where the firms create value (in an economic sense) when
the good is sold to the customer. In this traditional sense, after value is created
and represented as a good (like a car), value can be added as services (like car
maintenance). This value-added perspective on services is explained by the
value chain approach. For example in the Porter’s value chain approach first
the raw materials come into the company from key partners, then activities
are performed by the company to create value. This value is distributed as a
good and services become an after-sell process where value can be added to the
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goods-based value. However, in Service Science value is created collaboratively
with the user: co-created. In this view value is not created by the company is
co-created by the usage of the good: the benefits. Hence, we use value-in-use
as the value approach in the business model conceptualization within Service
Science.
By following a Service Dominant strategy we need to think about specific
business aspects such as competences on collaboration and value, endogenous
and exogenous relationships, and the role of actors and infrastructures resources [5], [4]. Furthermore, strategy has an impact on how we design business models. Hence, by following a Service Dominant Strategy we need to
reframe the the business model concept for the service context.
Service specific business models tools are gaining attention in Service Science research driven by the Service Dominant Logic. However, most approaches
try to modify the visual representation of existing business models tools such
as the business model canvas. By modifying the visual representation of the
business model and not at the foundations level results in a simplified version
of the business model canvas (as seen in [7]) that does not include the service dominant elements. This approach is not enough, because the resulting
simplified business model canvas is not constructed by following the service
dominant aspects.
1.2
Contribution
In this report we contribute to the development of Service Science by framing
the business model concept in Service.
Business models are relevant mostly to Chief Officers such as Chief Operating Officers (COOs), Chief Technology Officers (CTOs) and Chief Executive Officers (CEOs) [8]. Furthermore, business executives from start-ups and established companies can use the our approach to design Service Dominant Business Models. Firstly, business executives from start-ups or innovation departments can design their new to the market Service Dominant Business Model.
Secondly, business executives from traditional companies, usually Vice Presidents and business envelopment executes, can rethink their business model to
transition from a the goods-based business model towards a service-based one.
1.3
Approach
The Service Dominant Business Model is being develop through the following
steps:
1. Study on the business model concept
2. Analyze the construction process of a reference Business Model conceptualization
3. Use the identified construction process to build the Service Dominant
Business Model
4. Visualize the Service Dominant Business model
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Structure
In Section 2, we study business model conceptualizations to select a reference
business model concept. In Section 3, we analyze the construction method of
our reference business model concept. In Section 4, we construct the pillars of
our Service Dominant Business Model by using the analysis of our reference
concept. In Section 5, we use the defined pillars to build the elements of the
service dominant business model concept. In Section 6, we present the Service
Dominant Business Model. In Section 7, we visualize our conceptualization at
pillar level of granularity. In Section 8, we show an example on how to use
the tool to analyze the music service business of Spotify. Finally, we end this
report with conclusions.
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Business model conceptualizations
In this section we explore the business model concept. Firstly, in section 2.1,
we introduce the business model concept and its study in different academic
research areas. Secondly, in section 2.2, we focus on how the concept has been
developed by e-business researches and their impact to business practitioners.
2.1
The business model concept across different academic research areas
This section is based on a literature review on business models that covers
many research areas into one unified perspective [8], [9].
The traditional business model concept promotes a dual focus on value creation and value capture. Firstly, value creation is about how the company create value for the customer. Secondly, the value capture is about what the company captures for itself form this value creation process. The business model
concept has been explored by different academics where numerous definitions
has been developed. Furthermore, the business model concept has been developed by different academic areas such as strategy, e-business and, innovation
and technology management.
Firstly, the business model concept has been studied in strategy to explain
activity-based and networked-based mechanisms of value creation. Secondly,
in e-business, the concept has been used to explain internet-based organizations and the firm’s new role within its ecosystem. Thirdly, the concept has
been studied in innovation and technology management fields, the concept
helps to understand networked modes of innovation and how technology is
converted into profitable business.
Regarding the different development areas on business model research, the
following aspects are identified by Zott [8], [9] as an important catalyst for
an unified study of business models: Firstly, the business model is a concept
by its own that is centered on the focal company with boundaries beyond the
organization. Secondly, the business model is at the system level on how companies do business. Thirdly, organizational activities are key in the proposed
business model conceptualizations. Fourthly, business models aims to explain
value creation and value capture. In Table 1, we present four aspects identified
in [9] as a catalyst of the unified business model research.
BM Aspects
Cross-organizational
System-based
Activity -based
Value-based
Description
Centered on the focal company with boundaries
beyond the organization
Offers a system level view on how companies do
business.
Activities are key in the business model concept
The business model studies value creation and appropriation
Table 1: Towards a common business model understanding
In this section we presented an overview of the business model research
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and the resulting directions for business model research. In the next section,
we will focus on business models as ontology representations.
2.2
Business model representations as ontologies
Business models representations has been developed as a textual, verbal and
graphical representations [8]. However, until the formal representation of a
business model by using ontologies there was no common understanding what
is clearly a business model. Moreover, the formalization as an ontology into
elements and relationships helps to define a knowledge domain like business
models.
“Ontologies are content theories about the sorts of objects, properties of objects, and relations between objects that are possible in a specified domain of
knowledge” [10]. Ontologies help us describing our knowledge about a knowledge domain. In this case, the business model knowledge domain.
There are two research works on business model representation by using
ontologies: e3Value and Business Model Ontology (BMO) [8]. E3value [11] has
their roots in requirement engineering and attempts to do a feasibility study
of the new business model. BMO [12] aims to identify the building blocks of a
business model to define the concept.
In BMO, a business model is “understood as a conceptual tool that contains a set of elements and their relationships and allows expressing the business logic of a specific firm”. The BMO focuses on the value a company offers
(what?) to one or several segments of customers (who?) and the architecture
of the firm and its network of partners for creating, marketing and delivering
this value and relationship capital (how?), in order to generate profitable and
sustainable revenue streams (how much?) [13].
In e3value, a business model is “seen as a constellation of enterprises and
final customers that jointly create, distribute and consume things of economic
value. This conceptualization allows to reason about well-formed constellations and to reason about expected profitability for each enterprise involved”.
[13]. However, this conceptualization is focused on the exchange between the
parties as objects and the profitability analysis. This tool is not in line with
our purposes to provide tools where business people can design their business
models by their own. The e3value approach due to the focus on exchange between parties and the complex approach on this tool in the analysis of ideas is
not appropriate for us to take it as a reference model to construct our own tool.
The e3value research established the direction on using ontologies in the
business model domain, specifically in e-commerce. However, the tool and ontology was designed to evaluate innovative e-commerce ideas and then evaluate them in economic terms in line with cash-flow analysis. This approach
lacks a common understanding of the business model and focuses on the value
exchanged between parities.
The BMO use the ontology approach to build an ontology of business models by focusing on the elements and their relationships in a conceptual approach rather than economic evaluations. Moreover, the BMO is focused on
conceptual aspects on the revenue and cost, rather than the profitability analysis of e3value.
As Information Systems scholars we found the ontology approach as a validated construction method to conceptualize the business model as a reference
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Criteria
Organizational focus
Construction
Value
Analysis
Tool
Usage Adoption
e3value
Constellation-centred
Ontology
Economic exchange
Profitability
Value model
Low
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BMO
Firm-centred
Ontology
Value Proposition
Concept
Canvas
High
Table 2: Ontolgy driven Business Model tools
meta-model. Modern Ontology definitions emphasize that must be an agreement of the conceptualization that is being specified: “An Ontology is formal
specification of a shared conceptualization” [14]. Moreover, the BMO is a business model ontology that defines the business model elements and their relationships.
We aim to further develop the business model concept by taking shared language as a foundation and reach practitioners and their shared understanding
on business models. To achieve this goal, we take the BMO as our reference
construction mechanism for our conceptualization of the business model in
service. Moreover, business people associate the business model concept with
the derived work of the business model ontology, known by practitioners as the
business model canvas. This derived work evolved from the ontology towards
a visual representation of the concept as a tool to facilitate the communication
of business model concepts at high level of detail.
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The Business Model Ontology
In this section, we study our reference business model conceptualization: the
business model ontology.The Business Model Ontology has its roots in the Information System domain as a Ph.D thesis. The model after several iterations
led to the development of a simplified tool that we known today as the business
model canvas. Firstly, we present the tool known within practitioners as the
business model canvas. Secondly, we present the scientific foundations known
in the academic world as the business model ontology.
3.1
The Business Model Ontology as a tool: The business model
canvas
The BMC is a tool to design and analyze business models. The BMC describes a
business model through nine basic building blocks that show the logic of how
a company intends to make money. The visual representation of the business
model canvas is shown in Figure 3.
Figure 3: Business model canvas [15]
As presented in [15], the building blocks are:
– Customer segments: “defines different groups of people or organizations
an enterprise aims to reach and serve”.
– Value propositions: “describes the bundle of products or services that
create value for a specific customer segment”.
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– Channels: “describes how a company communicates with and reaches
its customer segments to deliver a value proposition”.
– Customer relationships: “describes the types of relationships a company
establishes with specific customer segments”.
– Revenue streams: “represents the cash a company generates from each
customer segment” .
– Key resources: “describes the most important assets required to make a
business model work”.
– Key activities: “describes the most important things a company must do
to make its business model work”.
– Key partnerships: “describe the network of suppliers and partners that
make the business model work”.
– Cost structure: “describes all cost incurred to operate a business model”.
In section 3.2, we analyze the construction process and academic foundations of the business model canvas driven by the business model ontology. The
business model elements from the BMC and the BMO are slightly different.
We take the elements business model canvas due to the practical relevance acquired within business practitioners. However, we take the original construction process of the ontology due to the defined approach on how to define a
business model ontology.
3.2
Business Model Ontology and its construction method
The business model concept development in Information Systems is based on
design science to construct artifacts. As described in section 3.1, the Business
Model Canvas was developed as a Business Model Ontology (BMO). The BMO
is a set of elements and their relationships to describe the money earning logic
of a firm. The BMO contains nine business model building blocks, also called
as business model elements [12].
In this section, we describe the reference business model ontology construction method described in Ostelwader’s PhD thesis [16]. This Ph.D thesis is the
academic foundation of the BMC in which we can distinguish its pillars and
its elements. Firstly, in section 3.2.1, we describe how the BMO pillars are constructed. Secondly, in section 3.2.2, we describe how the BMO elements are
constructed.
3.2.1
Pillars Construction
The BMO is constructed around four pillars: Product, Customer Interface, Infrastructure Management and Financial aspects. Firstly, the Product pillar has
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one building block element the value proposition. Secondly, The Customer Interface pillar has three building blocks: Target Customer, Distribution Channel
and Relationship. Thirdly, the Infrastructure Management has three building
blocks: Value Configuration, Capability and Partnership. Finally, the Financial
Aspects pillar has two building blocks elements: Cost Structure and Revenue
Models.
In Table 3, we present the pillar construction method of the BMO. Firstly,
in the first column we have the fundamental questions of the SDBM pillars.
Secondly, in the second column we have the BSC perspective associated with
the pillar. Finally, in the third pillar we have the associated question to the
pillar and BSC perspective.
Pillar
BMO [12]
Product
Customer
Infrastructure
Management
Financial
Aspects
Associated
Question [17],
[12]
What?
Who?
How?
BSC Perspective [18]
How much?
Financial Perspective
Innovation and Learning Perspective
Customer perspective
Internal Business Perspective
Table 3: Business Model Canvas Pillars (Adapted from [12])
3.2.2
Elements Construction
The BMC is an evolution of the BMO, the BMO elements are constructed by
defining an ontology to describe the business model knowledge domain as elements and relationships. As shown in Table 4, the elements of the ontology
and their relationships are described with a business model element and its
properties.
The properties of a business model element are presented in Table 4 and
described as follows: Firstly, the “definition” field is used to describe the business model element. Secondly, we use the “Related to” field to establish the
relationship of the element with the business model pillar from section 3.2.1.
Thirdly, we use the “Related to” field to describe relationship of the current
element with other elements of the ontology. Fourthly, some business model
element be decomposed into sub-elements which are described in the “Set of”
field. Fifthly, the “attributes” flied the values and occurrences of each element
are described. Finally, the last column is used to indicate references from the
literature associated with the business model element.
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Name of BM element
Definition
Part of
Related to
Set of
Cardinaility
Atributes
References
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NAME
Gives a precise description of the business model
element.
Defines to which pillar of the ontology the element
belongs to or of whichelement it is a sub-element.
Describes to which other elements of the ontology an
element is related to.
Indicates into which sub-elements an element can be
decomposed.
Defines the number of allowed occurrences of an element
or sub-element inside
the ontology.
Lists the attributes of the element or sub-element. The
allowed values of an attribute are indicated between
accolades {VALUE1, VALUE2}. Their occurrences are
indicated in brackets (e.g. 1-n).
Each element and sub-element has two standard
attributes which are NAME and DESCRIPTION that
contain a chain of characters {abc}.
Indicates the main references related to the business
model element.
Table 4: Business Model Ontology Element [12]
The BMO elements were renamed in the BMC to appeal the business audience. For each BMO pillar we identify the renamed elements into the BMC
as follows: Firstly, in the BMO product pillar, the Value proposition keeps its
name in the BMC. Secondly, in the BMO Customer Interface pillar, the Target
Customer element is renamed to Customer Segments, the Distribution Channel is named to just Channels, and the Relationship element is renamed to
Customer Relationships. Finally, in the Infrastructure Management, the Value
Configuration is replaced by the sub-element Activity, becoming Key Activities
in the BMC. The Capability element of the BMO is replaced by the Resource
sub-element of the BMO, becoming Key Resources in the BMC. At last, the
Partnership element becomes Key Partners in the BMC.
In sections 4 and 5, we use the BMC elements derived from the BMO and
the construction process of the BMO to build our ontology on service dominant
business models. Firstly, in Section 4, we construct the pillars of the Service
Dominant Business Model. Secondly, in Section 5, we construct the elements
associated with each pillar of the Service Dominant Business Model.
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Pillars of the Service Dominant Business Model
In this section, we start the development of the SDBM by confronting the Service Dominant Strategy Canvas with the Business Model Canvas. Firstly, in
Section 4.1 we describe the construction process of our pillars. Secondly, in
Section 4.2, we apply the described process to build the pillars.
4.1
Pillars Construction Process
The elements in the Service Dominant Strategy Canvas are sorted through the
traditional strategic lens to communicate the service dominant strategy. These
pillars are based on traditional strategic approaches: business competences,
business resources and market relationships. Moreover, the goal of these pillars is to establish a strategic bridge between the traditional strategic concepts
and the service dominant strategy [4].
In this document, our goal is to build the Service Dominant Business Model
concept. We start from the Service Dominant Strategy as our foundation. However, the pillars in the construction of the SDBM play a different role. They are
the guideline of our development by bringing different perspectives together.
Match
How? Who? How much? Clustered Service Dominant Strategy Elements Identify
Identify
Clustered Service Dominant Strategy Elements Identify
Clustered Service Dominant Strategy Elements Identify
Clustered Service Dominant Strategy Elements Match
What? Match
Match
Service Dominant Strategy Elements SDBM Pillar SDBM Pillar SDBM Pillar SDBM Pillar Figure 4: SDBM Pillar level construction process description
The proposed construction process of the SDBM pillars is shown in Figure 4. Firstly, the large rectangle represents the Service Dominant Strategy
elements as our foundation to generate the Service Dominant Business Model
Pillars. Secondly, a matching process, represented as an arrow, is applied to the
strategic elements by using the questions of the BMO ontology pillars (What?
How? Who? and How much?) represented by a circle over the arrow. Thirdly,
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the boxes after the matching process represent the resulting clustered elements
of the Service Dominant Strategy. Fourthly, the arrow below each box represent the pillar identification process. Finally, the rectangles at the bottom of
the figure represent each resulting pillar from the whole process.
4.2
Application of the Pillar Construction Process
In Figure 5, we illustrate the application of the pillar construction process depicted in section 4.1 (see Figure 4).
Match
Match
Match
Match
Service Dominant Strategy Elements What? How? Who? How much? Clustered Service Dominant Strategy Elements Clustered Service Dominant Strategy Elements Clustered Service Dominant Strategy Elements Clustered Service Dominant Strategy Elements SDBM Pillar: Service SDBM Pillar: SDBM Pillar: Management Actors SDBM Pillar: Cost-­‐Benefit Figure 5: SDBM Pillar level construction process application
As shown in Figure 5, in the first row, we have the Service Dominant Strategy elements. These elements are classified by matching them with the the associated questions of the BMC’s pillars (What? How? Who? and How much?)
represented in the circle over the arrow.
The resulting clustered elements are presented inside a rectangle after the
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matching process (represented by the arrow with a circle in Figure 5). The
matching process is described as follows: the SDSC element that matches the
What question is co-creation. This match is explained due the co-creation element is about what we are focusing on the business: the co-creation of value
by use. Secondly, the Customer, Partners and Employees elements are related
to who participates in the business. Thirdly, the elements that match the How
question are co-production, flexible borders, contextually individuated, Empowerment, Bidirectional, Service Flows, Information Technologies and Service Integration. All these elements are related on how we establish our relationships and how we do business. Finally, the Ethical Mutual Benefit, Riskbased Pricing and Knowledge Sharing elements match the How question by
establishing How much we get from the business.
The unbalance between the number of elements within each category is
explained by the purpose of the Service Dominant Strategy. The Service Dominant Strategy focuses in communicating a new way of doing business as valuein-use represented by the What question. However, this new way of doing
business requires numerous changes on how we collaborate with others at
strategic level. These numerous changes are explained by the eight elements
that match this criteria to achieve one value-in-use shift presented by the How
question. Moreover, this collaboration is also present in the How much question by establishing a guideline on how we share our benefits with our collaborators clustered within the Who question.
As a result of the clustering process we have created the pillars of our
SDBM: Service, Actors, Management and Cost-Benefit. Each SDBM pillar is
explained as follows:
Service: This first pillar establishes our special focus in on service rather than
the traditional approach of product and services. Moreover, service is about
the benefit. Furthermore, this benefit is derived form the co-creation element
which is about value-in-use. Hence, we establish Service as the pillar under
the What question.
Actors: As the second pillar we establish Actors instead of Customers under
the Who question. By choosing actors, we emphasize the collaborative nature of the Service Dominant Strategy. Moreover, by grouping all the actors
in under the same group we establish the active role of all the business actors
involved. Hence, we establish Actors as the pillar behind the Who question.
Management: The collaborative nature of the Service Dominant Strategy requires to look beyond the Infrastructure Management. We need to manage
the relationships with the actors in the business as well the service infrastructure with the technological aspects involved. Firstly, the relationship between
actors is represented by elements such as Flexible Borders that enable collaboration beyond the boundaries of the company. Secondly, the management
of Service Flows and its integration. Hence, we establish management as our
third pillar and answer to the How question.
Cost-Benefit: A business model should include the financial perspective as
stated by the How much question. However, the costs and benefits can be not
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only financial within a business driven by a Service Dominant Strategy. Moreover, the financial perspective from the traditional business model approach
should be extend to other kind of costs and benefits such as knowledge. Hence,
we establish Cost-Benefit as the fourth pillar and answer how much question.
As shown in Table 5, the adoption of the service dominant strategy affects
the business model layer by changing the focus from product towards service,
from Customers to Actors, from Infrastructure Management to Management,
from Financial aspects to Benefits.
Pillar
question
BMO
What?
Who?
How?
How much?
Product
SDBM
Service
Customer
Interface
Actor
Infrastructure
Management
Management
Financial
Aspects
Cost-Benefit
Table 5: BMO and SDBM pillars comparison
The four pillars of the SDBM facilitate the element construction process by
providing a guideline. This guideline is founded on the four questions: What
is the service? Who are the actors? How do we manage the business relations
and service infrastructure? and How much cost and benefit actors incur and
gain respectively from the business collaboration?
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5
BETA Working Paper Series
Elements of the Service Dominant Business Model
In this section, we build the elements of the Service Dominant Business Model
Firstly, in Section 5.1 we describe the construction process of our elements.
Secondly, in Section 5.2, we apply the described process to each of the pillars (
previously defined in Section 4.2 ).
5.1
Elements Construction Process
The proposed construction process of the SDBM Elements is illustrated in Figure 6.
Management BMC elements BMC elements SDBM Pillar Confront
Confront
Clustered Service Dominant Strategy Elements Clustered Service Dominant Strategy Elements Clustered Service Dominant Strategy Elements Intermediate Service SDBM Elements Intermediate Actors SDBM Elements Intermediate Management SDBM Elements Check
Check
Check
Confront
BMC elements Match
Match
Actors SDBM Pillar Benefits SDBM Pillar BMC elements Confront
Match
Service SDBM Pillar Clustered Service Dominant Strategy Elements Intermediate Benefits SDBM Elements Check
Match
Business Model Canvas Elements BM Aspects checking BM Aspects checking BM Aspects checking BM Aspects checking Final Service SDBM Elements Final Actors SDBM Elements Final Management SDBM Elements Final Benefits SDBM Elements Figure 6: Service Dominant Business Model Elements process
As shown in Figure6, firstly, we start with the business model canvas elements as input described in section 3.1. These elements are matched with
each identified pillar of our SDBM (represented by the first arrow and circle).
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The resulting BMC elements are confronted with the clustered elements of the
Service Dominant Strategy canvas form Section 4.2 (represented by the second
arrow and circle). After this step, we have intermediate SDBM elements. A last
check is needed, to be aligned with the aspects of a unified business model research identified in Table 1 (see section 2.1).The outcome of this whole process
are the final SDBM elements for each category illustrated at the bottom of the
figure as rectangles.
Each new element is defined by using an adaptation of the BMO element
description (See Table in Section 3.2.2). The template definition of each SDBM
element is shown in Table 6.
Name of the SDBM
Element
Definition
Part-of
Related to SDSC
Related to BMC
Set of
Cardinality
Name of the element
Description of the element
Defines to which SDBM pillar the element belongs
Defines to which element of the Service Dominant Strategy Canvas is related
Defines to which element of the Service Dominant Strategy Canvas is related
Indicates into which sub-elements the element
can be decomposed
Defines the number of occurrences of an element inside the SDBM.
Table 6: Reference Table for a SDBM element
5.2
Application of the Elements Construction Process
In this section, we apply the process described in Section 5.1 for each SDBM
Pillar: Service, Management, Actors, and Benefit.
5.2.1
Service Pillar elements
As show in Figure 7, the BMC elements that match the Service pillar are value
proposition and Channels. They are related to what service experience we are
offering. These elements are aligned with the co-creation element of the SDSC
that is about co-creation value through use: value-in-use.
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The Service Dominant Business Model
Key Partners Business Model Canvas Elements Key Ac,vi,es Value proposi,on Key Resources Channels Customer Rela,onships Revenue Stream Customer Segments Match
Cost Structure BETA Working Paper Series
Service SDBM Pillar What is the service?
Filtered elements Channels Confront
Value proposi,on Clustered Service Dominant Strategy Elements Service SDBM Elements Touch points Check
Value-­‐in-­‐use proposi,on BM Aspects checking Final Service SDBM Elements Value -­‐based Value -­‐based Value-­‐in-­‐use proposi,on Touch points Figure 7: SDBM Service pillar elements
Value-in-use Proposition: By confronting the Value Proposition element of
the BMC with the co-creation element of the SDSC we have the focused value
proposition in the service context: the value-in-use-proposition. Hence, the
value-in-use proposition is about the benefits in the usage of the offer. The
SDBM element Value-in-use proposition is described in Table 7.
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The Service Dominant Business Model
Name of the SDBM
Element
Definition
Part-of
Related to SDBM
Related to SDSC
Related to BMC
Set-of
Cardinality
Attributes
BETA Working Paper Series
Value-in-use Proposition
A Value Proposition specified as the benefits for
the user in usage terms
SERVICE
Customer
Co-creation
Value Proposition
User beneftis
1..n
-
Table 7: SDBM element: Value-in-use proposition
Touch-points: The Service Dominant Strategy establishes that Value is cocreated with the customer through an interaction process. In this perspective,
the goods are just a mechanism for service provision: the benefit. Hence, we
need interaction channels where value is co-created. In line with the Service
Marketing and Service Design literature ( [19], [20]), we define as touch-points
our interaction channels that enable value co-creation. The SDBM element
Value-in-use proposition is described in Table 8
Name of the SDBM
Element
Definition
Part-of
Related to SDBM
Related to SDSC
Related to BMC
Set-of
Cardinality
Attributes
Touch-points
A touch-point enables access the benefits of the
value-in-use proposition through interaction
SERVICE
Customer
Co-creation, Co-production, Empowerment
Value Proposition
1..n
-
Table 8: SDBM element: touch-points
5.2.2
Actors Pillar elements
As shown in Figure 8, the BMC elements that match the Actors pillar are Customer Segments and Key Partners. These elements are related to who participates in the business model. Moreover, after we project these elements to
toward the SDSC elements we have the customer and partners. However, we
don’t have a match with employees, this is explained due that in the SDMC
they are seen as an internal resource of the company. In our case, we are aiming towards a more systemic view, then we need to establish the role of the
company this systemic view. Therefore, we need to include a role of the company in the system within the literature related with the advancement of the
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business model concept.
Key Partners Cost Structure Key Ac1vi1es Value proposi1on Key Resources Channels Customer Rela1onships Revenue Stream Customer Segments Match
Business Model Canvas Elements Actors SDBM Pillar Key Partners Customer Segments Confront
Filtered elements Who are the actors?
Clustered Service Dominant Strategy Elements Partners Customer Company Check
Intermediate Service SDBM Elements BM Aspects System -­‐based Final Service SDBM Elements Customer Cross-­‐
organiza1onal Cross-­‐
organiza1onal System-­‐based System-­‐based Partners Company Figure 8: Service Dominant Business Model Elements process
Customer: By looking the customer segments through the active role of the
customer stated in the Service Dominant Strategy we have a prosumer. The
result of this confrontation is the Customer element. We use this element to
identify who are the different kind of customers that are accessing to the service.
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The Service Dominant Business Model
Name of the SDBM
Element
Definition
Part-of
Related to SDSC
Related to BMC
Set-of
Cardinality
Attributes
BETA Working Paper Series
Customer
Defines the role of the actor as a customer in
the business
ACTORS
Customer
Customer Segments
1..n
-
Table 9: Customer Element of the SD BMO
Partner: Partners are a key component on the business model concept. By
confronting the Key Partners element of the BMC with the Partners element
of the SDSC we have the common Partner element for the SDBM. Partners
participate in the business by bringing resources or activities into the business
collaboration. The Partner element is designed for recognizing who are the
partners that are participating in the business model.
Name of the SDBM
Element
Definition
Part-of
Related to SDSC
Related to BMC
Set-of
Cardinality
Attributes
Partner
Defines the role of the actor participating in the
business as a partner in the business
ACTORS
Partners
Key Partners
0..n
-
Table 10: Towards a common business model understanding
Company: This systemic view requires the inclusion of focal company that is
behind the business model. As established by the cross-organizational aspect
in Table 1 (See section 2.1) we need to be focused on the company. In the Service Dominant Business Model, the orchestration of the service is done by the
company. However, we need to achieve this system aspect on how companies
do business. Hence, we include the company as an actor of the system. By
using this element we identify who is the focal company behind the business
model.
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Name of the SDBM
Element
Definition
Part-of
Related to SDSC
Related to BMC
Set-of
Cardinality
Attributes
BETA Working Paper Series
Company
Describe the actor role as the company behind
the business model
SERVICE
Employees
1
-
Table 11: Towards a common business model understanding
5.2.3
Management Pillars Elements
As shown in Figure 9, the BMC elements that match the How questions are Key
Activities, Key Resources and Customer Relationships. The SDSC elements
that are related with the How questions in Key Activities are Service Flows,
Co-Production and Service Integration. However, Service Integration is an activity performed by the focal company, Service Flows are the Activities performed by Partners and Co-production represent a collaborative production
effort between the different actors, which is organized by the focal company.
The customer relationships that match the SDSC elements are contextually
individuated, empowerment and Bidirectional. However, the SDSC elements
contains relationships that can be applied beyond the customer to other actors:
Flexible borders and empowerment. The flexible borders is the extension of the
activities of the company beyond the corporate borders. This lack of one-byone match signals us to extend the customer relationships to other actors of
the system. Hence, we name our element as Relationships.
The match between Key Resources of the BMC and the SDSC is made with
the Information Technologies element. However, we use the resources naming
to represent the resources of internal and external actors of the business model.
By confronting the Key Activities element of the BMC with specific activities of the SDSC we observe the following: the service integration activity is
a capability that need to be developed by the focal company as well the coproduction. However, these activities are only analyzed form the focal company. In the business model level we need to be able to capture activities performed by various actors and have enough flexibility to include different kinds
of activities.
By confronting the Key Resources element of the BMC with the resources
established in the SDSC we can observe that Information Technologies only
offer and internal perspective for the focal company. However, we can not
match the resources element with aspects of unified BM research. This mismatch is explained due to the activity-based focus that requires the evolution
of the business model concept. Moreover, the resources are encapsulated as
activities.
The Customer Relationships element of the BMC only offers one relationship perspective. However, the collaborative approach driven by the Service
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The Service Dominant Business Model
Key Ac1vi1es Value proposi1on Key Resources Channels Key Partners Cost Structure Customer Rela1onships Revenue Stream Customer Segments Match
Business Model Canvas Elements BETA Working Paper Series
Managem
ent SDBM Pillar Key Resources Customer Rela1onships Resources Rela1onships Key Ac1vi1es Confront
Filtered elements How do we manage the business relationships
and service infrastructure?
Clustered Service Dominant Strategy Elements Ac1vi1es Check
Intermediate Service SDBM Elements BM Aspects checking Final Service SDBM Elements Ac1vity-­‐based Cross-­‐organiza1onal Cross-­‐organiza1onal System-­‐based System-­‐based Ac1vi1es Rela1onships Figure 9: Service Dominant Business Model Elements process for the Management pillar
Dominant Strategy requires to establish relationships with different actors in
the business. Hence, we conceptualize these different relationships under the
Relationship element.
In a nutshell, we need to establish a system perspective regarding the activities, resources and relationships from each actor in the business model.
Hence, we need to define these elements in a way that we can capture different
business scenarios. We summarize each of these elements as follows:
Activities: This element is key in the business model concept. Moreover, the
service dominant strategy is about the service flows that correspond to the tra-
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ditional activities carried by different actors in the collaboration. However, we
use the activity naming to include a wider options of activities that can be performed by different actors in the business like a customer activity for instance.
We use this element to identify the activities performed by the business model
actors.
Some actors participating in the business can be asset oriented. Hence, we
need to model what resources they bring into the business collaboration. However, we model this as the activity associated to the resource, that the resource
for its own. We use this element to identify the resources performed by the
business model actors.
Name of the SDBM
Element
Definition
Part-of
Related to SDSC
Related to BMC
Set-of
Cardinality
Attributes
Activities
Describes the activities that each actor perform
in the business
MANAGEMENT
Service Flows, Service Integration, Coproduction
Key Activities
0..n
Table 12: Activities
Relationships: Different kind of relationships are established with the business collaborators. The relationship element goes beyond the traditional customer relationship to establish the relationships at system level by including
all the actors in the business model. We use this element to identify the relationship of the actor within the system view of the business model.
Name of the SDBM
Element
Definition
Part-of
Related to SDBM
Related to SDSC
Related to BMC
Set-of
Cardinality
Attributes
Relationships
Describes how the actor relates with the business
MANAGEMENT
Customer, Partner, Company
Flexible Borders, Contextually Individuated,
Bidirectional, Empowerment
Customer Relationships
0..n
Empowered, Individuated
Table 13: Activities
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5.2.4
BETA Working Paper Series
Cost-Benefit Pillar elements
As show in Figure 10, we select the Cost Structure and Revenue stream elements from the BMC. They are related with the How much question. The SDSC
elements from this pillar are Risk-based pricing, Knowledge sharing and Ethical Mutual Benefit. The Risk-based pricing establishes that we need to consider
a multi-party strategy in the Value-in-use Proposition. This multi-party pricing scheme needs to consider the cost and revenue for each party. Hence, we
need the Financial Cost and Financial Revenue for each actor in the business
model.
Key Partners Cost Structure Key Ac1vi1es Value proposi1on Key Resources Channels Customer Rela1onships Revenue Stream Customer Segments Match
Business Model Canvas Elements Cost-­‐ Benefits SDBM Pillar How much cost and benefit actors incur and gain
respectively from the business collaboration?
Revenue Stream Cost Structure Confront
Filtered elements Clustered Service Dominant Strategy Elements Financial Cost Financial Revenue Non-­‐financial Cost Non-­‐financial Revenue Check
Intermediate Service SDBM Elements BM Aspects Final Service SDBM Elements Value-­‐
based Financial Cost Value-­‐
based Financial Revenue Value-­‐
based Value-­‐based Non-­‐financial Cost Non-­‐financial Revenue Figure 10: Service Dominant Business Model Elements process
As show in Figure 10, the Knowledge Sharing element of the SDSC, establishes knowledge as a benefit to be shared among partners is the business.
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Hence, we need to model benefits that are not measurable in financial terms.
We define these benefits as the Non-financial Revenue. Ethical Mutual Benefit
elements of the Service Dominant Strategy establishes the sharing of benefits
to the actors participating in the collaboration. However, since we are modelling the Non-financial Revenue, we need to include the non-financial cost to
track the cost and revenue of the different actors in the business.
Moreover, the business model concept is about value creation and value
capture. However, the Value perspective in the service dominant strategy is
about the benefit, hence we need to include these benefits that go beyond financial ones. Hence, we decompose the cost and revenue into financial and
non-financial. The elements associated with this pillar can be defined as follows:
Financial: This element represent the financial cost associated with the actor
in the business collaboration. By taking into account the associated cost in the
collaboration, we are able to share the financial revenue among the business
actors. This element represent the financial revenue associated with the actor
in the business collaboration. This element helps the business model designer
to capture the financial revenues for each actor in the business model.
Name of the SDBM
Element
Definition
Part-of
Related to SDSC
Related to BMC
Set-of
Cardinality
Attributes
Financial
Financial cost and revenues of each actors participating in the business
BENEFIT
Risk-based Pricing
Cost Structure, Revenue Stream
Costs or Revenues
0..n
Financial Cost, Financial Revenue
Table 14: Financial SDBM Element
Non-financial : This element represent the non-financial cost and revenues
associated with the actor in the business collaboration. By tracking the nonfinancial costs in the collaboration, we can observe why a certain actor would
not like to participate in the business collaboration. In some cases, business
actors participate in the collaboration to gain benefits that can not be captured
in traditional financial revenue. This element enables the business model designer to incorporate costs and revenues that can not be captured in financial
terms.
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The Service Dominant Business Model
Name of the SDBM
Element
Definition
Part-of
Related to SDSC
Related to BMC
Set-of
Cardinality
Attributes
BETA Working Paper Series
Non-financial
Non-financial cost and revenues of each actors
participating in the business
BENEFIT
Knowledge Sharing, Ethical Mutual Benefit
Cost Structure, Revenue Stream
Non-Financial Cost or Non-Financial Revenue
0..n
Non-Financial Cost, Non-Financial Revenue
Table 15: Non-Financial SDBM Element
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6
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The Service Dominant Business Model
Firstly, In Section 6.1, we present the resulting Service Dominant Business
Model. Then, in Section 6.2, we present the the associated questions.
6.1
Presenting the Service Dominant Business Model
The SDBM is presented in two tables. Firstly, Table 16 shows the pillars and its
description. Secondly, Table 17 shows the SDBM pillars with its elements and
its description.
SDBM Pillar
Service
Actors
Management
Cost-Benefit
Description
Defines what is the service for the user
Defines who are the actors participating in the business
Defines how we generate the service
Defines how much cost and benefits the actor get or incur
Table 16: Service Dominant Business Model Pillars description
SDBM
Pillar
Service
SDBM element
SDBM element description
Value-in-use
proposition
Touch-points
Actors
Customer
A Value Proposition specified as the benefits for the user in usage terms
A touch-point enables access the benefits of
the value-in-use proposition through interaction
Defines the role of the actor as a customer
in the business
Defines the role of the actor participating
in the business as a partner in the business
Describe the actor role as the company behind the business model
Describes the activities that each actor perform in the business
Describes how the actor relates with the
business
Describes the financial cost of each actors
participating in the business
Describes the financial benefit of each actor
participating in the business
Describes the non-financial benefit of each
actor participating in the business
Describes the non-financial cost of each actor participating in the business
Partner
Company
Management
Activities
Relationships
CostBenefit
Financial cost
Financial benefit
Non-financial
benefit
Non-financial
cost
Table 17: Service Dominant Business Model Elements descriptions
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6.2
BETA Working Paper Series
Key questions of the Service Dominant Business Model
The questions for each pillar and element are intended to facilitate the use of
the SDBM in practice.Firstly, Table 18 shows the pillars and its description.
Secondly, Table 19 shows the SDBM pillars with its elements and its description.
SDBM Pillar
Service
Actors
Management
Cost-Benefit
SDBM Pillar key question
what is the value-in-use for the user?
Who are the actors participating in the business?
How the actors participate in the business?
How much cost and benefits the actors obtain or incur
within the business?
Table 18: Key questions for the Service Dominant Business Model Pillars
SDBM Pillar
Service
Actors
Management
SDBM element
Value-in-use
proposition
Touch-points
Customer
Partner
Company
Activities
Relationships
Cost-Benefit
Financial cost
Financial benefit
Non-financial
benefit
Non-financial
cost
SDBM Element key question
What is the value for the user?
What are the interaction points between the user and the service?
Who is the customer?
Who is our partner?
Who is the focal company?
What are the activities related with
each actor?
What are the relationships with each
actor?
What is the financial cost for each actor?
What is the financial benefit for each
actor?
What is the non-financial benefit for
each actor ?
What is the non-financial cost for
each actor
Table 19: Key questions for Service Dominant Business Model Elements
In this section we presented the SDBM by integrating the pillars and their
elements. In Section 7, we develop a preliminary visualisation of the SDBM.
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Visualizing the Service Dominant Business Model
as a Radar
In this Section, we visualize the Service Dominant Business Model by using
the pillars and elements constructed in Section 4 and 5 respectively. In Section
7.1,we discuss our visualization approach and we develop it further in Section
7.2
7.1
Visualization Approach
In Figure 11 we illustrate the value chain (a) and the linear approach followed
in the business model canvas (b). The linear structure of the value chain emphasizes the value flow moving from the company towards the customer. As
shown in Figure 11 (b), the cost is represented on the left side and the revenue on the right side. However, this approach is right for value chain based
business models, where the product is targeted to a customer segment. Furthermore, this structure does not let us explore business scenarios that require
more interaction and collaboration with the different actors involve in the collaboration. Hence, we need to explore a different foundational structure for
our Service Dominant Business Model.
Key Ac-vi-es Key Partners Firm infrastructure
gi
ar
M
Human Resources
n
Technology Development
Customer Rela-onships Value Proposi-ons Key Resources Channels cost revenue Customer Segments Outbound
Logistics
Marketing
and
Sales
Service
gi
Operations
M
ar
Inbound
Logistics
n
Procurement
From the company to the customer (a)
(b)
Figure 11: The Value Chain Approach of the Business Model Canvas
In the Service Dominant Business Model we depart from the value chain
approach towards the value network. Value networks are usually represented
as nodes and arrows [21]. However, this representation without any boundaries to represent specific nodes can lead to increased complexity to users (like
in e3value). One visualization approach that takes concentric circles to represent specific nodes on the value networks is shown in Figure 12(a). In this
approach we have concentric circles to represent different aspects. As shown
in Figure 12(b), we take the concentric approach to represent the four pillars
of the Service Dominant Business Model. Moreover, The value network selection approach is founded on the Service Dominant Logic that suggest to switch
from the value chain towards the value network. Furthermore, the value network has been recognized as one of the topics of study where the business
model concept can evolve.
Our Service Dominant Business Model requires a network representation
and the simplicity of use of the BMC. The strength of the BMC is on the different areas where the users can represent the values inside the rectangles in the
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value chain. These areas are useful to guide the user in the design or analysis of
a business model. In our approach, we can use concentric circles to represent
areas of the network where users can represent values in a guided manner.
Benefit
Management
Providers
Service
Company
2
1
4
3
1
Customers
Ac
tor
5
Ac
tor
(a)
or 2
Act
3
(b)
Figure 12: The Value Network Approach of the Service Dominant Business
Model
7.2
Visualizing the SDBM Pillars
The visualization of the pillars of the SDBM is suitable for idea brainstorming
or high level business model analysis. The SDBM visualization foundation
with the questions are illustrated in Figure 14.
The nesting order of the SDBM is give by the central aspect on service: the
value-in-use proposition that is delivered across different touch-points to the
service user. The second inner circle represents how the service is managed by
co-producing the value-in-use with different actors. The management pillar
include the activities, resources and relationships with different actors. The
third concentric circle is about the cost-benefit, actor has a cost-benefit that
motivate each party to participate in the business. At last, outside the circles
we represent the actors. These actors have an element value on the Management and Cost-benefit pillars.
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Cost-Benefit
How much cost and revenue they
get
form the business?
Management
tor
Ac
How they participate in
the business ?
Actor
5
N
Service
What is the business
Value-in-use Proposition?
Who are the
actors
participating
in the
business?
tor
Ac
to
Ac
r1
What are the
service touch-points?
4
Ac
to
or 2
Act
r3
Figure 13: Visualizing the Service Dominant Business Model
Actors (Who?) Obtain/incur
Cost-­‐benefit ( How Much?) Management (How?) Service (What?) Generated from
Enables
Figure 14: Nesting the SDBM pillars
In this section we visualized the Service Dominant Business Model Pillars
as a radar. In our next work we will include the elements of our approach to
further develop the radar.
In Section 8, we use the visualization approach depicted in this section to
analyze the music streaming business of Spotify.
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Using the Radar to analyze Spotify
In this section we analyze at high level two business models of Spofity by using
the visualization of the SDBM presented in Section 7. As shown in Figure 15(a),
in the Service SDBM pillar located at the centre we answer: what is the valuein-use? In the Spotify music streaming service scenario, the value-in-use can
be described as music listening experience for free in Figure 15(a) and music
listening experience unlimited in Figure 15(b).
Benefit
Benefit
Management
P
Cu aying
sto
me
r
Management
Service
Ad
ve
Playlist
sharing
$0 per month
Free access
Advertising
listening and
interruptions
Music Streaming
Playlist
sharing
er
rtis
Music
Library
Access
Re
c
Lab ord
el
Song
Streaming
Revenue
Song
Streaming
Cost
Advertising
Revenue
Spo
Unlimited
Music listening
experience
r
Playlist
listening
F
Cu ree
sto
me
Playlist
sharing
Advertising
media
Advertising
Distribution
cost
Service
Playlist
listening
Playlist
sharing
Free
Music listening
experience
Advertising
Distribution
cost
$5 per month
Advertising
free
Re
c
Lab ord
el
tify
(a)
Music
Library
Access
Song
Streaming
Revenue
Music Streaming
Song
Streaming
Cost
Subscription
Revenue
Spo
tify
(b)
Figure 15: SDBM Radar for Spotify free and Spotify Unlimited
The actors of the Spotify free SDBM can be identifying by asking the question: Who are the actors participating in the business? Firstly, as shown in
Figure 15(a), we identify the Free Customer, the Record Label and the Advertiser.
By answering the question associated with the management aspect: How
the actors participate in the business? we can identify that the Free Customer
participates into the business by sharing and listening playlist. The service is
owned by the Spotify actor that requires the Music Library access from Record
Label actor for music streaming. As shown in Figure 15(a), Spotify participates
in the business by enabling the streaming music. The Record Label participates
by offering access to their large music library
How much cost and benefits the actors get from the business? We can identify that the Free customers pays nothing each month obtaining a free access.
Spotify needs to pay per song streamed to the Record Label. This represent
a song streaming revenue for the Record label and a song streaming cost for
Spotify
The actors of the Spotify unlimited SDBM can be identifying by asking the
question: Who are the actors participating in the business? Firstly, as shown in
Figure 15(a), we identify the Paying Customer, the Record Label and Spotify.
By answering the question associated with the management aspect: How
the actors participate in the business? we can identify that the Paying Customer participates into the business by sharing and listening playlist. The service is owned by the Spotify actor that requires the Music Library access from
Record Label actor for music streaming. As shown in Figure 15(b), Spotify par34
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ticipates in the business by enabling the streaming music. The Record Label
participates by offering access to their large music library
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Conclusions
In this document we conceptualized the Service Dominant Business Model
(SDBM). Frirsfly, We presented a business model conceptualization driven by
a Service Dominant Strategy. Secondly, we presented a high level view representation on the SDBM to provide quick analysis and idea conceptualization
around the value-in-use.
The presented SDBM conceptualization covers the four aspects needed for
a common business model understanding: Firstly, the actors bring the crossorganisational aspect. Secondly, the system-based approach is fulfilled by providing a system level view on the business focused on the business of the focal
company. Thirdly, the activity-based perspective is achieved by the emphasize
on service and the management aspects needed to make it happen. Finally, the
value-based perspective is covered in the benefits for the actors participating
in the business.
The presented visualisation of the SDBM as a radar is our first step towards
an operational model usable by users. As our next step, we will continue the
development of the SDBM Radar by including the elements of the SDBM rather
than just the pillars of our model.
As future work, we will study the how different SDBM Radars interact to
have complementary business models reinforcing each others. As shown in
Figure 16, two or more business models can be projected on each other to study
their inter-relationships. This kind of study is highly relevant in cases of two
different users group like free users from Spotify free and paying users from
Spotify premium.
SDBM Radar 1: Spo.fy free SDBM Radar 2: Spo.fy unlimited Figure 16: Inter-relationship of SDBM Radars
36
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Title
The Service Dominant Business Model: A Service Focused
Conceptualization
Relationship between freight accessibility and logistics
employment in US counties
Author(s)
Egon Lüftenegger, Marco Comuzzi, Paul
Grefen, Caren Weisleder
Frank P. van den Heuvel, Liliana Rivera,
Karel H. van Donselaar, Ad de Jong,
Yossi Sheffi, Peter W. de Langen, Jan C.
Fransoo
A Condition-Based Maintenance Policy for Multi-Component Qiushi Zhu, Hao Peng, Geert-Jan van
Systems with a High Maintenance Setup Cost
Houtum
A flexible iterative improvement heuristic to support creation
of feasible shift rosters in self-rostering
Scheduled Service Network Design with Synchronization and
Transshipment Constraints for Intermodal Container
Transportation Networks
Destocking, the bullwhip effect, and the credit crisis:
empirical modeling of supply chain dynamics
Vehicle routing with restricted loading capacities
E. van der Veen, J.L. Hurink, J.M.J.
Schutten, S.T. Uijland
K. Sharypova, T.G. Crainic, T. van
Woensel, J.C. Fransoo
Maximiliano Udenio, Jan C. Fransoo,
Robert Peels
J. Gromicho, J.J. van Hoorn, A.L. Kok,
J.M.J. Schutten
Service differentiation through selective lateral
E.M. Alvarez, M.C. van der Heijden,
transshipments
I.M.H. Vliegen, W.H.M. Zijm
A Generalized Simulation Model of an Integrated Emergency Martijn Mes, Manon Bruens
Post
Business Process Technology and the Cloud: defining a
Vassil Stoitsev, Paul Grefen
Business Process Cloud Platform
Vehicle Routing with Soft Time Windows and Stochastic
D. Tas, M. Gendreau, N. Dellaert, T. van
Travel Times: A Column Generation and Branch-and-Price
Woensel, A.G. de Kok
Solution Approach
Improve OR-Schedule to Reduce Number of Required Beds
J. Theresia van Essen, Joël M. Bosch,
Erwin W. Hans, Mark van Houdenhoven,
Johann L. Hurink
How does development lead time affect performance over
Andreas Pufall, Jan C. Fransoo, Ad de
the ramp-up lifecycle? Evidence from the consumer
Jong, A.G. (Ton) de Kok
electronics industry
The Impact of Product Complexity on Ramp-Up Performance Andreas Pufall, Jan C. Fransoo, Ad de
Jong, A.G. (Ton) de Kok
Co-location synergies: specialized versus diverse logistics
Frank P. van den Heuvel, Peter W. de
concentration areas
Langen, Karel H. van Donselaar, Jan C.
Fransoo
Proximity matters: Synergies through co-location of logistics Frank P. van den Heuvel, Peter W. de
establishments
Langen, Karel H. van Donselaar, Jan C.
Fransoo
Spatial concentration and location dynamics in logistics: the Frank P. van den Heuvel, Peter W. de
case of a Dutch province
Langen, Karel H. van Donselaar, Jan C.
Fransoo
FNet: An Index for Advanced Business Process Querying
Zhiqiang Yan, Remco Dijkman, Paul
Grefen
Defining Various Pathway Terms
W.R. Dalinghaus, P.M.E. Van Gorp
The Service Dominant Strategy Canvas: Defining and
Egon Lüftenegger, Paul Grefen, Caren
Visualizing a Service Dominant Strategy through the
Weisleder
Traditional Strategic Lens
A Stochastic Variable Size Bin Packing Problem with Time
Stefano Fazi, Tom van Woensel, Jan C.
Constraints
Fransoo
Coordination and Analysis of Barge Container Hinterland
K. Sharypova, T. van Woensel, J.C.
Networks
Fransoo
Proximity matters: Synergies through co-location of logistics Frank P. van den Heuvel, Peter W. de
establishments
Langen, Karel H. van Donselaar, Jan C.
Fransoo
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Albert Douma, Martijn Mes
374
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Strategies for dynamic appointment making by container
terminals
MyPHRMachines: Lifelong Personal Health Records in the
Cloud
Service differentiation in spare parts supply through
dedicated stocks
Spare parts inventory pooling: how to share the benefits?
371
2012
Condition based spare parts supply
370
2012
369
2012
Using Simulation to Assess the Opportunities of Dynamic
Waste Collection
Aggregate overhaul and supply chain planning for rotables
X. Lin, R.J.I. Basten, A.A. Kranenburg,
G.J. van Houtum
Martijn Mes
368
2012
Operating Room Rescheduling
367
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Spatial concentration and location dynamics in logistics: the
case of a Dutch province
354
2011
Identification of Employment Concentration Areas
Title
A literature review in process harmonization: a conceptual
framework
A Generic Material Flow Control Model for Two Different
Industries
Dynamic demand fulfillment in spare parts networks with
multiple customer classes
Author(s)
Heidi Romero, Remco Dijkman, Paul
Grefen, Arjan van Weele
S.W.A. Haneyah, J.M.J. Schutten, P.C.
Schuur, W.H.M. Zijm
H.G.H. Tiemessen, M. Fleischmann, G.J.
van Houtum, J.A.E.E. van Nunen, E.
Pratsini
K. Fikse, S.W.A. Haneyah, J.M.J. Schutten
Pieter van Gorp, Marco Comuzzi
E.M. Alvarez, M.C. van der Heijden,
W.H.M. Zijm
Frank Karsten, Rob Basten
J. Arts, S.D. Flapper, K. Vernooij
J.T. van Essen, J.L. Hurink, W. Hartholt,
B.J. van den Akker
Switching Transport Modes to Meet Voluntary Carbon
Kristel M.R. Hoen, Tarkan Tan, Jan C.
Emission Targets
Fransoo, Geert-Jan van Houtum
On two-echelon inventory systems with Poisson demand and Elisa Alvarez, Matthieu van der Heijden
lost sales
Minimizing the Waiting Time for Emergency Surgery
J.T. van Essen, E.W. Hans, J.L. Hurink, A.
Oversberg
Vehicle Routing Problem with Stochastic Travel Times
Duygu Tas, Nico Dellaert, Tom van
Including Soft Time Windows and Service Costs
Woensel, Ton de Kok
A New Approximate Evaluation Method for Two-Echelon
Erhun Özkan, Geert-Jan van Houtum,
Inventory Systems with Emergency Shipments
Yasemin Serin
Approximating Multi-Objective Time-Dependent
Optimization Problems
Branch and Cut and Price for the Time Dependent Vehicle
Routing Problem with Time Windows
Analysis of an Assemble-to-Order System with Different
Review Periods
Interval Availability Analysis of a Two-Echelon, Multi-Item
System
Carbon-Optimal and Carbon-Neutral Supply Chains
Generic Planning and Control of Automated Material
Handling Systems: Practical Requirements Versus Existing
Theory
Last time buy decisions for products sold under warranty
Said Dabia, El-Ghazali Talbi, Tom Van
Woensel, Ton de Kok
Said Dabia, Stefan Röpke, Tom Van
Woensel, Ton de Kok
A.G. Karaarslan, G.P. Kiesmüller, A.G. de
Kok
Ahmad Al Hanbali, Matthieu van der
Heijden
Felipe Caro, Charles J. Corbett, Tarkan
Tan, Rob Zuidwijk
Sameh Haneyah, Henk Zijm, Marco
Schutten, Peter Schuur
Matthieu van der Heijden, Bermawi
Iskandar
Frank P. van den Heuvel, Peter W. de
Langen, Karel H. van Donselaar, Jan C.
Fransoo
Frank P. van den Heuvel, Peter W. de
Langen, Karel H. van Donselaar, Jan C.
Fransoo
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Efficiency evaluation for pooling resources in health care
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The Effect of Workload Constraints in Mathematical
Programming Models for Production Planning
Using pipeline information in a multi-echelon spare parts
inventory system
Reducing costs of repairable spare parts supply systems via
dynamic scheduling
Identification of Employment Concentration and
Specialization Areas: Theory and Application
327
2010
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Title
BPMN 2.0 Execution Semantics Formalized as Graph Rewrite
Rules: extended version
Resource pooling and cost allocation among independent
service providers
A Framework for Business Innovation Directions
Author(s)
Pieter van Gorp, Remco Dijkman
The Road to a Business Process Architecture: An Overview of
Approaches and their Use
Effect of carbon emission regulations on transport mode
selection under stochastic demand
An improved MIP-based combinatorial approach for a multiskill workforce scheduling problem
An approximate approach for the joint problem of level of
repair analysis and spare parts stocking
Joint optimization of level of repair analysis and spare parts
stocks
Inventory control with manufacturing lead time flexibility
Remco Dijkman, Irene Vanderfeesten,
Hajo A. Reijers
K.M.R. Hoen, T. Tan, J.C. Fransoo, G.J.
van Houtum
Murat Firat, Cor Hurkens
Analysis of resource pooling games via a new extension of
the Erlang loss function
Vehicle refueling with limited resources
Frank Karsten, Marco Slikker, Geert-Jan
van Houtum
Murat Firat, C.A.J. Hurkens, Gerhard J.
Woeginger
Bilge Atasoy, Refik Güllü, Tarkan Tan
Optimal Inventory Policies with Non-stationary Supply
Disruptions and Advance Supply Information
Redundancy Optimization for Critical Components in HighAvailability Capital Goods
Making Decision Process Knowledge Explicit Using the
Product Data Model
Analysis of a two-echelon inventory system with two supply
modes
Analysis of the dial-a-ride problem of Hunsaker and
Savelsbergh
Attaining stability in multi-skill workforce scheduling
Flexible Heuristics Miner (FHM)
An exact approach for relating recovering surgical patient
workload to the master surgical schedule
Frank Karsten, Marco Slikker, Geert-Jan
van Houtum
E. Lüftenegger, S. Angelov, P. Grefen
R.J.I. Basten, M.C. van der Heijden,
J.M.J. Schutten
R.J.I. Basten, M.C. van der Heijden,
J.M.J. Schutten
Ton G. de Kok
Kurtulus Baris Öner, Alan Scheller-Wolf,
Geert-Jan van Houtum
Razvan Petrusel, Irene Vanderfeesten,
Cristina Claudia Dolean, Daniel Mican
Joachim Arts, Gudrun Kiesmüller
Murat Firat, Gerhard J. Woeginger
Murat Firat, Cor Hurkens
A.J.M.M. Weijters, J.T.S. Ribeiro
P.T. Vanberkel, R.J. Boucherie, E.W.
Hans, J.L. Hurink, W.A.M. van Lent, W.H.
van Harten
Peter T. Vanberkel, Richard J. Boucherie,
Erwin W. Hans, Johann L. Hurink, Nelly
Litvak
M.M. Jansen, A.G. de Kok, I.J.B.F. Adan
Christian Howard, Ingrid Reijnen, Johan
Marklund, Tarkan Tan
H.G.H. Tiemessen, G.J. van Houtum
Frank P. van den Heuvel, Peter W. de
Langen, Karel H. van Donselaar, Jan C.
Fransoo
A combinatorial approach to multi-skill workforce scheduling M. Firat, C. Hurkens
Stability in multi-skill workforce scheduling
M. Firat, C. Hurkens, A. Laugier
Maintenance spare parts planning and control: A framework M.A. Driessen, J.J. Arts, G.J. van
for control and agenda for future research
Houtum, W.D. Rustenburg, B. Huisman
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Title
Near-optimal heuristics to set base stock levels in a twoechelon distribution network
Inventory reduction in spare part networks by selective
throughput time reduction
The selective use of emergency shipments for servicecontract differentiation
Heuristics for Multi-Item Two-Echelon Spare Parts Inventory
Control Problem with Batch Ordering in the Central
Warehouse
Preventing or escaping the suppression mechanism:
intervention conditions
Hospital admission planning to optimize major resources
utilization under uncertainty
Minimal Protocol Adaptors for Interacting Services
Teaching Retail Operations in Business and Engineering
Schools
Design for Availability: Creating Value for Manufacturers and
Customers
Transforming Process Models: executable rewrite rules
versus a formalized Java program
Working paper 314 is no longer available
A Dynamic Programming Approach to Multi-Objective TimeDependent Capacitated Single Vehicle Routing Problems with
Time Windows
Tales of a So(u)rcerer: Optimal Sourcing Decisions Under
Alternative Capacitated Suppliers and General Cost
Structures
In-store replenishment procedures for perishable inventory
in a retail environment with handling costs and storage
constraints
The state of the art of innovation-driven business models in
the financial services industry
Design of Complex Architectures Using a Three Dimension
Approach: the CrossWork Case
Effect of carbon emission regulations on transport mode
selection in supply chains
Interaction between intelligent agent strategies for real-time
transportation planning
Internal Slackening Scoring Methods
Vehicle Routing with Traffic Congestion and Drivers' Driving
and Working Rules
Practical extensions to the level of repair analysis
Ocean Container Transport: An Underestimated and Critical
Link in Global Supply Chain Performance
Capacity reservation and utilization for a manufacturer with
uncertain capacity and demand
Spare parts inventory pooling games
Capacity flexibility allocation in an outsourced supply chain
with reservation
An optimal approach for the joint problem of level of repair
analysis and spare parts stocking
Responding to the Lehman Wave: Sales Forecasting and
Supply Management during the Credit Crisis
Author(s)
R.J.I. Basten, G.J. van Houtum
M.C. van der Heijden, E.M. Alvarez,
J.M.J. Schutten
E.M. Alvarez, M.C. van der Heijden,
W.H.M. Zijm
Engin Topan, Z. Pelin Bayindir, Tarkan
Tan
Bob Walrave, Kim E. van Oorschot, A.
Georges L. Romme
Nico Dellaert, Jully Jeunet
R. Seguel, R. Eshuis, P. Grefen
Tom Van Woensel, Marshall L. Fisher,
Jan C. Fransoo
Lydie P.M. Smets, Geert-Jan van
Houtum, Fred Langerak
Pieter van Gorp, Rik Eshuis
---S. Dabia, T. van Woensel, A.G. de Kok
Osman Alp, Tarkan Tan
R.A.C.M. Broekmeulen, C.H.M. Bakx
E. Lüftenegger, S. Angelov, E. van der
Linden, P. Grefen
R. Seguel, P. Grefen, R. Eshuis
K.M.R. Hoen, T. Tan, J.C. Fransoo, G.J.
van Houtum
Martijn Mes, Matthieu van der Heijden,
Peter Schuur
Marco Slikker, Peter Borm, René van
den Brink
A.L. Kok, E.W. Hans, J.M.J. Schutten,
W.H.M. Zijm
R.J.I. Basten, M.C. van der Heijden,
J.M.J. Schutten
Jan C. Fransoo, Chung-Yee Lee
Y. Boulaksil; J.C. Fransoo; T. Tan
F.J.P. Karsten; M. Slikker; G.J. van
Houtum
Y. Boulaksil, M. Grunow, J.C. Fransoo
R.J.I. Basten, M.C. van der Heijden,
J.M.J. Schutten
Robert Peels, Maximiliano Udenio, Jan
C. Fransoo, Marcel Wolfs, Tom Hendrikx
Nr.
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Title
An exact approach for relating recovering surgical patient
workload to the master surgical schedule
295
2009
An iterative method for the simultaneous optimization of
repair decisions and spare parts stocks
294
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Fujaba hits the Wall(-e)
293
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Lead time anticipation in Supply Chain Operations Planning
287
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Inventory Models with Lateral Transshipments: A Review
286
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Efficiency evaluation for pooling resources in health care
285
2009
284
2009
A Survey of Health Care Models that Encompass Multiple
Departments
Supporting Process Control in Business Collaborations
283
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2009
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2009
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279
2009
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2010
277
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Toward Meso-level Product-Market Network Indices for
B. Vermeulen, A.G. de Kok
Strategic Product Selection and (Re)Design Guidelines over
the Product Life-Cycle
An Efficient Method to Construct Minimal Protocol Adaptors R. Seguel, R. Eshuis, P. Grefen
276
2009
Coordinating Supply Chains: a Bilevel Programming Approach Ton G. de Kok, Gabriella Muratore
275
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G.P. Kiesmuller, S. Minner
274
2009
273
2009
272
2009
Inventory redistribution for fashion products under demand
parameter update
Comparing Markov chains: Combining aggregation and
precedence relations applied to sets of states
Separate tools or tool kits: an exploratory study of engineers'
preferences
An Exact Solution Procedure for Multi-Item Two-Echelon
Spare Parts Inventory Control Problem with Batch Ordering
271
2009
Distributed Decision Making in Combined Vehicle Routing
and Break Scheduling
C.M. Meyer, H. Kopfer, A.L. Kok, M.
Schutten
Author(s)
Peter T. Vanberkel, Richard J. Boucherie,
Erwin W. Hans, Johann L. Hurink,
Wineke A.M. van Lent, Wim H. van
Harten
R.J.I. Basten, M.C. van der Heijden,
J.M.J. Schutten
Pieter van Gorp, Ruben Jubeh, Bernhard
Grusie, Anne Keller
Implementation of a Healthcare Process in Four Different
R.S. Mans, W.M.P. van der Aalst, N.C.
Workflow Systems
Russell, P.J.M. Bakker
Business Process Model Repositories - Framework and
Zhiqiang Yan, Remco Dijkman, Paul
Survey
Grefen
Efficient Optimization of the Dual-Index Policy Using Markov Joachim Arts, Marcel van Vuuren,
Chains
Gudrun Kiesmuller
Hierarchical Knowledge-Gradient for Sequential Sampling
Martijn R.K. Mes; Warren B. Powell;
Peter I. Frazier
Analyzing combined vehicle routing and break scheduling
C.M. Meyer; A.L. Kok; H. Kopfer; J.M.J.
from a distributed decision making perspective
Schutten
Inventory Control with Partial Batch Ordering
Translating Safe Petri Nets to Statecharts in a StructurePreserving Way
The link between product data model and process model
Inventory planning for spare parts networks with delivery
time requirements
Co-Evolution of Demand and Supply under Competition
Michiel Jansen; Ton G. de Kok; Jan C.
Fransoo
Colin Paterson; Gudrun Kiesmuller;
Ruud Teunter; Kevin Glazebrook
P.T. Vanberkel; R.J. Boucherie; E.W.
Hans; J.L. Hurink; N. Litvak
P.T. Vanberkel; R.J. Boucherie; E.W.
Hans; J.L. Hurink; N. Litvak
S. Angelov; K. Vidyasankar; J. Vonk; P.
Grefen
O. Alp; W.T. Huh; T. Tan
R. Eshuis
J.J.C.L. Vogelaar; H.A. Reijers
I.C. Reijnen; T. Tan; G.J. van Houtum
B. Vermeulen; A.G. de Kok
A. Busic, I.M.H. Vliegen, A. Scheller-Wolf
I.M.H. Vliegen, P.A.M. Kleingeld, G.J. van
Houtum
Nr.
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Title
Dynamic Programming Algorithm for the Vehicle Routing
Problem with Time Windows and EC Social Legislation
269
2009
267
2009
266
2009
Similarity of Business Process Models: Metics and Evaluation Remco Dijkman, Marlon Dumas,
Boudewijn van Dongen, Reina Kaarik,
Jan Mendling
Vehicle routing under time-dependent travel times: the
A.L. Kok, E.W. Hans, J.M.J. Schutten
impact of congestion avoidance
Restricted dynamic programming: a flexible framework for
J. Gromicho; J.J. van Hoorn; A.L. Kok;
solving realistic VRPs
J.M.J. Schutten;
Author(s)
A.L. Kok, C.M. Meyer, H. Kopfer, J.M.J.
Schutten
Working Papers published before 2009 see: http://beta.ieis.tue.nl