Linking Service-Dominant Logic and Strategic Business Practice

Abstract

Service-dominant (S-D) logic can function as a strategic business logic that portrays creating superior value in conjunction with—rather than for—customers as a source of competitive advantage for organizations. From this perspective, strategy is about making choices in terms of how to best facilitate and enhance value cocreation for mutual and long-term betterment. While the literature has pointed out the managerial merits of cocreating value, less is known about the organizational capabilities necessary to execute S-D logic in practice. This article devises an S-D orientation, specified as a portfolio of six strategic capabilities, namely individuated, relational, ethical, empowered, developmental, and concerted interaction capability. In combination, these six strategic capabilities constitute a cocreation capability. The authors develop the conceptual model of S-D orientation through (a) an in-depth literature review and (b) input from 21 expert academics. Conceptualizing S-D orientation provides a foundation for bridging S-D logic and strategy research with a more general framework, and for guiding much-needed empirical research that will inform managers. From a managerial point of view, S-D orientation provides a holistic approach to align the organization with its value network partners. The article also sets out an agenda for future research.