Servitisation

DEFINITION: The servitisation of products describes the strategy of creating value by adding services to products or even replacing a product with a service. This shift in business model is important because it means the interests of clients and providers are much more closely aligned. An example is Rolls-Royce’s airplane engine programme. Customers pay a set amount of money based on the number of hours the airplane is flown. In return, Rolls-Royce will repair, replace broken parts, modify and monitor the engine remotely.

See also: Sharing economy

See also: Circular economy

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