Functional Product Business Models: A Review of the Literature and Identification of Operational Tactical Practices

Offering functional products (FP) are beginning to emerge as a growing trend within industrial firms driven by the desire to achieve economic performance and sustainable resource management goals. Nevertheless, our knowledge about how companies can adopt and implement FP has remained limited. In this study, we conduct a systematic literature review related to FP business models and tactical practices to advance the understanding regarding FP implementation. Based on the in-depth analysis of 48 articles, we develop a framework that proposes a link between FP business models and tactics. We further link FP business models to five operational level tactics, which can ensure the degree of their implementation and value generation. The identified tactical sets are contract, marketing, network, product design, and sustainability aspects.