Development of a two-way framework for the product-service system business model: Focusing on convergence perspective

The convergence of manufacturing and services, commonly referred to as product-service systems (PSS), represents a transformative strategy for businesses aiming to stay competitive and respond to evolving market dynamics. This study addresses the limitations of traditional unidirectional perspectives, such as servitization and productization, by proposing a two-dimensional framework for PSS business models. Using direction (servitization vs. productization) and procedure (internalization vs. externalization) as the key axes, the study categorizes PSS strategies into a two-by-two matrix, providing a comprehensive and practical tool for business model innovation. An inductive approach, grounded in business model cases, highlights the bidirectional nature of manufacturing-service convergence and emphasizes the importance of strategic procedures in internal and external resource integration. This framework offers insights for small and medium-sized enterprises and policymakers aiming to leverage PSS for growth engines and business sustainability. This study contributes to the broader PSS literature and establishes a robust foundation for business applications.