A Study on Servitization Strategy to cope with Disruptive Innovation: Focus on the Electric Vehicle Battery Lease Policy

The purpose of this study is to propose the framework of service innovation strategy to counteract the emergence of electric vehicle. We conducted a case study on EV lease program which developed and has been implementing lease program for year. We designed and prepared the process, collected and analyzed data for the study. This study suggested a battery lease system and a framework for service innovation required for the rapid diffusion of electric vehicle as followings. First, we suggested a necessity of partitioned price system in order to enjoy the relative advantage of initial purchasing cost in contrast to the internal combustion automobiles. Second, we proposed that the new service strategy should focus on reducing the switching cost. Third, we suggested battery lease system and this contains the orientation to reduce cost factors in order to change to electric vehicle from internal combustion automobile. The suggested framework could practically contribute to the diffusion of electric vehicles. The result of this analysis is expected to provide a strategic guideline for decision makers of firms which have already entered the EVlease market by expanding the concepts from the existing product perspective to a service innovation perspective in explaining the characteristics of electric vehicle.