How will services change MNC’s business models under a circular economic background?

University essay from Göteborgs universitet/Graduate School

Abstract: The subject of this research is to find out how the MNCs can change from a traditional product-oriented business to a more service-oriented business. The study discusses and analysis on three types of product-service systems, under the structure of Business Model Canvas, with consideration of the previous studies, and aims at covering the entire MNC value chain. The target is to help the MNCs understand the role of service in achieving a more sustainable and circular business, as well as what aspects would be affected and to take into consideration. The study has adopted a qualitative method, by doing a case study with three MNCs in different industries to make the study more comprehensive. The interviewed companies are Volvo Group, IKEA, and Ericsson. The interviews for all three cases are under a similar structure to be more comparable. The study showed that the most common and developed service model is still the product-oriented one, by adding additional services and activities to the traditional linear model. The usage-oriented model includes renting and sharing activities and is also under most manufacturing companies' scope of consideration, however, the solution-oriented model is more developed only in ICT-related industries. Each of the models are leading to different factors, and although there are similarities between them, they are still differentiated, therefore it needs separate discussion while analysing different types of service-oriented business.

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