S-D Logic The Service Ecosystem Reflections upon Systems Theories and Service Research Robert F. Lusch Muzzy Chair in Entrepreneurship & Innovation University.

S-D Logic

The Service Ecosystem

Reflections upon Systems Theories and Service Research

Robert F. LuschMuzzy Chair in Entrepreneurship & InnovationUniversity of Arizona

 Stephen L. VargoShidler Distinguished Professor of MarketingUniversity of Hawaii

June 9, 2010Naples, Italy

Università di Cassino

Mid Sweden University

Universidad Torcuato di Tella

Exchange Systems …

S-D Logic

ExperiencedKnowledgea

bleInnovative

and CreativeProduces /Creates Value

Inexperienced

Unknowledgeable

Passive/Dull Consumes/Destroys

Value

G-D Logic: A Logic of Separation

Producer Consumer

Sep

ara

tion

S-D Logic

S-D Logic: A Logic of Togetherness

Sensing & Experiencin

g Creating

Integrating Resources Learning

Sensing & Experiencin

gCreating

Integrating Resources Learning

Cocreating

Cocreating

Firm Customer

S-D Logic

Evolving Marketing Thought

To Market

WebPlumbin

g

Marketing To

Web 1.0Retrieve &

Read

Marketing With

Web 2.0Co-Create

S-D Logic

Alexa Global Traffic Rankings

Rank 2005 2008 2010

1 Yahoo.com Yahoo.com Google.com2 Msn.com Google.com Facebook.com 3 Google.com Youtube.com Youtube.com4 Ebay.com Live.com Yahoo.com 5 Amazon.com Facebook.com Live.com 6 Microsoft.com Msn.com Wikipedia.com7 Myspace.com Myspace.com Baidu.com8 Google.co.uk Wikipedia.org Blogger.com9 Aol.com Blogger.com Msn.com

10 Go.com hi5.com qq.Com

Ranking as of: (1) 12/31/05; (2) 11/24/08; (3) 5/16/10Source: Alexa Global Traffic Rankings

S-D Logic

Emergent, Co-created, Resource Integrating, Dynamic

WEB 1.0 WEB 2.0

Speak to Customer Conversation with Customer

Customer is Passive Customer is Experiencing

Customers Locate Content

Customers Offered Service

Push Messages Out Pull Customers In

Standardized Mass Produced Messages

Customized and Relevant Exchange of Messages

Seller Control Ecosystem Control

S-D Logic

A service ecosystem is a spontaneously sensing and responding spatial and temporal structure of largely loosely coupled value proposing resource integrating social and economic actors interacting through institutions, technology and language to: Co-produce service offerings Exchange service offerings Co-create value

Service Ecosystems

S-D Logic

EMERGENCE OF INTERNET

S-D Logic

Phase Transition

A phase transition is a process where the characteristics of a given medium with given properties is transformed into a medium with new properties.

PHASE TRANSITION

LONG AND SMALL VIEWUniverse expanding from an extremely

dense and hot state.

CAMBRIAN EXPLOSION

HUMAN ARTIFACTSINTERNET

Inter-activity

Special-ization

Modularization

Ex-change

Transport

Commun-ication

Driving the

Phase Transitio

n

S-D Logic

Phase Transition to Ecosystems

States Flows Hierarchical Control Rigid Structures Centralized

Management Defined Boundaries Secretive Closed Systems Produce & Store Optimizing Planning

Grounded Control Flexible Structure Distributed

Management Fuzzy Boundaries Transparent Open System On-Demand Adaptive & Learning Improvising

S-D Logic

Phase Transition

MarketPlace

ConversationDialogue

Organization

Ecosystem

STATES FLOWS

Phase Transition

MarketPlace

ConversationDialogue

Organization

Ecosystem

STATES FLOWS

GOODS

PUSH PULL

SERVICE

S-D Logic

Phase Transition to Ecosystems:What it Means for Organizations

Old New Bureaucracy Learning

Factory Production

Co-creation Platforms

R&D Labs Innovation Platforms

Marketing Channels

Integration Platforms

Push

and

G-D

log

ic P

ull a

nd S

-D lo

gic

S-D Logic

No B2B, B2C, C2B, etc…..

Resource

Integrating Actor

Resource

Integrating Actor

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Resource Integrating Actors (RIA)

Coordinate

Communicate

RIA

Calculate

Coordination

Communication

Calculation

Behavior

Meaning

Thoughts

Signifiers

Signs

Language

Resource Integration & 3

C’s

Source: Loebler & Lusch

RI Platform

s

Unified Communica

tion Platforms

CloudComputing Platforms

Mobility Platform

s

Coordination

Platforms

Resource Integrating Platforms

S-D Logic

For More Information on S-D Logic visit:

sdlogic.net

We encourage your comments and input. Will also post:• Working papers

• Teaching material• Related Links

Steve Vargo: svargo@sdlogic.net Bob Lusch: rlusch@sdlogic.net

Thank You!

Mid Sweden University

Universidad Torcuato di Tella

S-D Logic

Some DefinitionsSystem = set of interacting or interdependent entities forming an integrated whole.

Service = application of resources for the benefit of another actor (Vargo and Lusch 2004)

Service System = A dynamic value co-creation configuration of resources, including people, organizations, shared information (language, laws, measures, methods) and technology, all connected internally and externally to other service systems by value propositions. (Spohrer et al.2007)

Ecosystem = a system formed by the interaction of a community of actors in an environment that these actors through interaction create.