This paper explores different transition paths firms can take to become product service system (PSS) innovators. Applying the dynamic capability theory, we study how three firms, respectively, a product innovator, a service innovator and a new venture, have developed PSS innovations in the mobility sector (car2go by Daimler AG, Hertz on Demand by The Hertz Corporation and Better Place). Based on semi-structured qualitative interviews with project managers, we propose a framework that incorporates three major transition paths. We derive propositions for a necessary capability set and the sequence of necessary capabilities along the innovation process. Our results indicate that the capabilities for developing and operating the technical network infrastructure are particularly relevant for successful PSS innovators, wherefore those firms should internalise these. Moreover, we discuss different types of environmental gains that can be realised from PSS innovations.
Keywords: innovation management, product service system, transition path, sustainable mobility, dynamic capabilities, car-sharing