alternative2: how well the system does its Product-Functions as experienced by Stakeholders.
alternative3: how well the Product-Function performs as experienced by Stakeholders.
Illustration: interactions are everything. We would not even know of an apple, had it not been for the interactions between the apple and us. We see, feel, taste and smell it etc. These interactions between the apple and us, I call interacting Qualities or Product-Values. The Qualities of an apple (or any Product) are what make us appreciate it. It might look-, smell-, feel-, great or less so. It will be healthy or less so. It will store well or rot fast.
We choose to buy and eat one food (or any Product), rather than another, based on the Product-Values that we want. To develop or buy an apple we must understand its Product-Values, the same holds true if we want to successfully develop any Product or Service.