| Summary: | Servitisation is a relatively new concept in the literature of marketing and strategy, in which
products are services are bundled together as a system. Servitisation is said to improve the
firm’s value, customer retention, etc. The output of servitisation is Product-Service Systems,
which are touted as environment-friendly business models. However, not all servitisation
models are environmentally benign. This article, using qualitative system dynamics
methodology and specifically causal loop digrams, argues that certain PSS models such as
product leasing, product renting, pay-per-use/services increase the affordability of the use of
products thereby increasing the overall consumption There are also environmental advantages
of servitisation with respect to the disposal of used products and obsolescence practices that
can be leveraged. This study has both theoretical and practical implication; businesses can
understand the environmental impact of their PSS business models and can plan mitigatory
efforts, policymakers can design appropriate incentives for businesses and consumers based on
environmental impacts of PSS busines models.
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