Product-service systems and circular business models: a theoretical and empirical contribution

Product-Service System (PSS) is defined as a combination of product and service with the aim of fulfilling customer needs. PSS is described in many studies as one of the main tools to achieve Circular Business Models (CBM), and thus achieving more sustainable practices. The adoption of a servitization approach leads to several advantages and benefits for both, customers and companies. However, companies may face some challenges when they try to switch from a traditional business model to a business model based on services. Thus, after an initial literature review based on the relation between servitization (PSS), circular economy, and the development of CBMs, interviews were carried out with Italian companies that have adopted business models based on servitization. The goal was to understand the importance of switching to a BM based on services and the main challenges that companies face and continue to incur on while they try to innovate and increment their level of circularity and/or servitization.