Capabilities for advanced services: A multi-actor perspective

Servitization involves manufacturers developing service offerings to grow revenue and profit. Advanced services, in particular, can facilitate a more service-focused organization and impact customers' business processes significantly. However, approaches to servitization are often discussed solely from the manufacturer's perspective; overlooking the role of other network actors. Adopting a multi-actor perspective, this study investigates manufacturer, intermediary and customer perspectives to identify complementary and competing capabilities within a manufacturer's downstream network, required for advanced services. Interviews were conducted with 24 senior executives in 19 UK-based manufacturers, intermediaries and customers across multiple sectors. The study identified six key business activities, within which advanced services capabilities were grouped. The unique and critical capabilities for advanced services for each actor were identified as follows: manufacturers; the need to balance product and service innovation, developing customer-focused through-life service methodologies and having distinct, yet synergistic product and service cultures; intermediaries, the coordination and integration of third party products/services; customers, co-creating innovation and having processes supporting service outsourcing. The study is unique in highlighting the distinct roles of different actors in the provision of advanced services and shows that they can only be developed and delivered by the combination of complex interconnected capabilities found within a network.     

Digital servitization: Crossing the perspectives of digitization and servitization

For over three decades now, several product companies around the world have been undertaking servitization paths. They have been devoting growing and substantial efforts to expand their service business. Expanding the service business in addition to their traditional core product business secures long-term growth and strengthens competitive advantages in business-to-business marketplaces. Recently, service business expansion has taken up many of the new digital technologies offered through the digital transformation. Thus, the servitization literature has progressed toward a dialogue on digital servitization . Against this background, the present article introduces the reader to this special issue. It first recalls key aspects of the emerging digital servitization discussion, and then depicts, through illustrative case studies, the growth paths utilized by industrial product companies when they take advantage of the digital servitization process. After discussing how the articles included in this special issue advance the literature, the article develops a number of directions for future research on digital servitization.     

Behind the scenes of digital servitization: Actualising IoT-enabled affordances

Manufacturers are increasingly transforming through servitization, and the Internet of Things (IoT) is a crucial enabler of this transformation. Current literature describes the diverse outcomes from IoT that enable servitization but fails to explain the reasons behind the diversity and the processes manufacturers go through to create these outcomes. This study aims to identify these processes by drawing on affordance theory and its core principles of affordance perception (understanding an opportunity provided by technology) and affordance actualisation (taking advantage of an opportunity provided by technology). By using affordance theory to analyse the case scenarios of six manufacturing firms, the study develops a framework to explain the realisation of the opportunities the IoT provides to manufacturers' servitization efforts. The analysis identifies three types of affordances and actualisation processes that help manufacturers realise the opportunities of the IoT. This framework enables manufacturers to systematically manage the contributions from the IoT and the associated actualisation efforts required to advance servitization. The study adds to the understanding of the IoT's role in a manufacturing servitization context.     

Different roads to servitization success – A configurational analysis of financial and non-financial service performance

Much servitization research is ambiguous regarding its conceptualization of servitization success and the results are often inconclusive or even contradictory. The present study argues that this is because servitization success is understood best as a multidimensional, causally complex phenomenon, and adopts a configurational approach. The purpose of this study is to shed light on prominent, but inconclusive success factors, their interdependencies, and their causal role in leading to servitization success. A state-of-the-art fuzzy set qualitative comparative analysis is applied to a sample of 143 German manufacturing companies. The complex relationships between focus of the service offering on services supporting the product and services supporting the clients actions, the existence of a separate service organization, decentralization of decision making, management commitment to services, service orientation of corporate culture, and financial, non-financial, and overall service success are disentangled. A service oriented corporate culture, decentralized decision making, and management commitment to services are identified as necessary for servitization success; 3 configurations as sufficient for servitization success and 3 configurations as sufficient for a lack thereof. These findings paint a more realistic and multifaceted image of the causal relationships underlying servitization success, thus yielding useful suggestions for the management of servitizing businesses.     

Navigating disruptive crises through service-led growth: The impact of COVID-19 on Italian manufacturing firms

This study draws on an extensive survey and interview data collected during the COVID-19 pandemic. The respondents were executives of industrials firms whose factories, warehouses, and headquarters are located in Northern Italy. This is undoubtedly the European region first and most extensively affected by the pandemic, and the government implemented radical lockdown measures, banning nonessential travel and mandating the shutdown of all nonessential businesses. Several major effects on both product and service businesses are highlighted, including the disruption of field-service operations and supply networks. This study also highlights the increased importance of servitization business models and the acceleration of digital transformation and advanced services. To help firms navigate through the crisis and be better positioned after the pandemic, the authors present a four-stage crisis management model (calamity, quick & dirty, restart, and adapt), which provides insights and critical actions that should be taken to cope with the expected short and long-term implications of the crisis. Finally, this study discusses how servitization can enhance resilience for future crises—providing a set of indicators on the presumed role of, and impact on, service operations in relation to what executives expect to be the “next normal.”     

The tribes in the field of servitization: Discovering latent streams across 30 years of research

The servitization domain consists of over three decades of multi-disciplinary research on service activities in industrial contexts. Servitization literature combines different research streams that share a set of critical concepts. Existing meta-analytical studies have organized information content of sub-streams, homogenized theoretical propositions, and concepts to discover shared patterns, and identified an implicit meta-narrative. This study reverses the meta-analysis direction to deconstruct the servitization body of knowledge using the dynamic topic modeling (DTM) methodology to analyze 550 research articles. DTM enables complex forms of content analysis that combine quantitative and qualitative analysis. The analysis demonstrates how these streams have informed the development of the servitization domain and shaped the collective construction of this body of knowledge. The contributions of this study are threefold. First, the study increases understanding of the conceptual dynamics and thematic trends within the servitization research domain and the nuances between the sub-streams. The study offers some strategies for the future development of the field, facilitating the renewal of the servitization-related research agenda. Second, it illustrates the role of DTM as an alternative tool for conducting a literature review. Finally, it supports the development of a common language for the servitization field, thereby reducing the entry barriers for new contributors and favoring the knowledge transfer to professionals.     

How to perform collaborative servitization innovation projects: the role of servitization maturity

Although current literature indicates that openness and collaboration are crucial for success in an innovative servitization solution within interorganisational servitization projects, research is limited compared to that on product and technology innovation projects. Moreover, this emerging servitization literature is limited to the traditional lead-firm perspective within larger consortiums. To help redress the balance, our research studied six collaborative servitization projects in mobile information and communication technologies (mICT) to explore why some open innovation efforts succeed in simultaneous service and product innovation with a market application of innovative solution, while others do not. The study provides empirical evidence that only a small number of projects resulted in an effective servitization innovation solution. This conclusion emphasises the complexity of creating service innovation in the mICT sector. By comparing better performing servitization projects with those that were less successful suggests that higher performance, in terms of novel service development, requires more than mere strong intention, adequate leadership and change management competencies. Rather, it also requires real servitization maturity in terms of a shared servitization framework and market-oriented innovation.     

Internet of things technologies,digital servitization and business model innovation in BtoB manufacturing firms

Technologies like the Internet of Things (IoT) are offering new opportunities and posing serious challenges to firms, forcing them to create entirely new business models, migrating from the conventional product-centric approaches to (digitally-based) service-oriented ones. This paper – following a qualitative research method – aims at describing the service-oriented impact of IoT technologies on firms' business models, with a particular focus on opportunities and challenges for BtoB manufacturing firms.Being the impact of IoT technologies on businesses a quite recent research stream, to date scarce attention has been devoted to the topic with specific attention to its impact on service-oriented business models in manufacturing firms. The paper contributes in this research stream in different ways. It proposes a map of digital servitization that helps in understanding firms' strategic transitions caused by technologies, making both theoretical and managerial contributions. Firstly, the research underlines the impact of the firms' sales model as a strategic factor in shaping firms' digital servitization strategies. In addition, three progressive levels of digital servitization complexity are identified, namely product- process- and outcome-oriented, that are based on an increasing use of IOT technologies and have specific challenges and opportunities.     

Branding a B2B service: Does a brand differentiate a logistics service provider?

Existing research has shown that strong brands serve as an important point of differentiation for firms, assisting customers in their evaluation and choice processes. Although there is considerable research on the branding of consumer goods and an increasing literature on industrial and service brands, little is known about branding in the context of business-to-business services. This research extends existing brand theory to a new setting, namely B2B services. Drawing on the results of two mail surveys, we examine B2B services branding in the context of logistics services. Findings suggest that brands do differentiate the offerings of logistics service providers and that brand equity exists for this commodity-like B2B service. Findings also support the extendibility of Keller's [Keller, K. L. (1993). Conceptualizing, measuring, and managing customer-based brand equity. Journal of Marketing, 57(1), 1-22] brand equity framework into the logistics services context. However, results of this study show that; logistics service providers and their customers have different perspectives on the relative influence of brand image and brand awareness on brand equity. Implications of these findings for managers and directions for future research are offered.     

Towards a model of dynamic capabilities in innovation-based competitive strategy: Insights from project-oriented service firms

With the growing significance of services in most developed economies, there is an increased interest in the role of service innovation in service firm competitive strategy. Despite growing literature on service innovation, it remains fragmented reflecting the need for a model that captures key antecedents driving the service innovation-based competitive advantage process. Building on extant literature and using thirteen in-depth interviews with CEOs of project-oriented service firms, this paper presents a model of innovation-based competitive advantage. The emergent model suggests that entrepreneurial service firms pursuing innovation carefully select and use dynamic capabilities that enable them to achieve greater innovation and sustained competitive advantage. Our findings indicate that firms purposefully use create, extend and modify processes to build and nurture key dynamic capabilities. The paper presents a set of theoretical propositions to guide future research. Implications for theory and practice are discussed. Finally, directions for future research are outlined.     

Meta-model of servitization: The integrative profiling approach

This study develops a profiling framework that allows systematic comparison of different value constellations of industrial, service-based business models. Following the systematic review method, 154 research articles on servitization are analyzed using this profiling approach, producing an integrative meta-model of servitization. Three different approaches to represent servitization in studies are identified: 1) end-state models; 2) gradual transition models, and 3) stepwise progression models. These are systematically compared and eight conceptually different, generic value constellations ranging from low to high levels of servitization are identified: products with limited support; installed and supported products; complementary services; product-oriented solutions; systems leasing; operating services; managed service solutions; and total solutions. These form a pattern of servitization showing increases in complexity of the offering and value for the customer as well as changes in operational responsibilities in the value constellations. This approach resolves the gap of conceptual incommensurability’ in the literature by providing a reference against which the different value constellations of servitization can be compared. The meta-model connects the various perspectives, models and terminology into a base line theory of servitization as a process, and enables a systematic comparison of the different empirical studies.     

Critical meta-analysis of servitization research: Constructing a model-narrative to reveal paradigmatic assumptions

The literature on servitization in the manufacturing context has grown rapidly. This study is the first systematic analysis of the paradigmatic assumptions of servitization research. Considering scientific research as a rhetorical activity, this study introduces the methododological approach to industrial marketing management research. This systematic review identifies both stylistic and structural aspects characterizing servitization research. The current review is based on a representative sample of 55 articles covering marketing, management, operations, innovation, and entrepreneurship research. The review discovered four paradigmatic assumptions that guide servitization research: 1) alignment to the Western narrative of constant development; 2) realist ontology; 3) positivist epistemology; and 4) managerialism. Following these findings, the study develops alternative directions for servitization research to challenge these paradigmatic dominances. The refined method of the model-narrative has the potential to generate insightful future research in the field of industrial marketing management. As an effective approach to analyzing research streams systematically, it facilitates critical meta-level reflection on servitization and could be widely applied beyond that topic.     

Boosting servitization through digitization: Pathways and dynamic resource configurations for manufacturers

The importance of digital technologies for services in manufacturing has often been posited, but current literature has neglected to explain how companies can leverage digital methods to increase their service offering. In this article we contribute to current theory by examining how digitization can enable servitization for manufacturers. By performing a multiple-case study at four manufacturing SMEs, we provide evidence for a priming and a capability effect. In terms of priming, we find that specific digitization options lead to three servitization pathways: industrial, commercial and value servitization. Through a dynamic resource-based lens, the barriers, dynamic resource configurations and competitive benefits specific to each pathway are discussed. Finally, this paper offers managers insight on successfully reaching higher service levels through development of digital assets, and on the skills necessary to further integrate into customers' processes.     

Networks,ecosystems, fields,market systems? Making sense of the business environment

This positioning paper is informed by our judgment that the mainstream research on business marketing and marketing in general is losing its relevance and vigor because it views business environments as narrow “markets” and focuses primarily on dyadic business relationships and their management. Sticking to this limited, economics-driven market view has detached the discipline from major real-world phenomena, leaving it with scant understanding of the contemporary environmental context of marketing and business strategy. Based on a focused reading of literature on business fields, business networks, business ecosystems, and market systems, we venture our own comprehensive theoretical framing of complex business environments summarized in two frameworks. In the pursuit of relevance our integration is avowedly simplifying as we strive for parsimony. Key points explicate the nested, multi-layered, multimodal, transitional and conditioned character of the business environment, and the dynamics, phases and processes of the evolution of that nested environment. We use the frameworks constructed, which form an initial theory of complex business environments, to supply a research agenda for business marketing and offer brief managerial conclusions.     

Servitization,digitization and supply chain interdependency

This study draws on literature at the intersection of servitization, digital business models and supply chain management. Work empirically explores how digital disruption has affected Business-to-Business (B2B) interdependencies. Dematerialization of physical products is transforming the way firms are positioned in the supply chain due to a reduction in production and transport costs and the different ways business engage with customers. Specifically, we propose that these new market conditions can empower downstream firms. We further propose that upstream firms can still capture additional value through digital service if their servitized offer includes difficult to imitate elements. The context of the analysis is the publishing industry. The Payment Card method employed is used to test UK and US consumer's perceptions of digital formats (eBooks) and assess their willingness to pay in relation to printed formats. The method undertaken enables us to elicit aggregated consumer demand for eBooks which in turn identifies optimal pricing strategies for the digital services. Analysis demonstrates that during digital servitization upstream firms should seek to deploy unique resources to ensure their strategic position in the supply chain is not diminished.     

B2B brands on Twitter: Engaging users with a varying combination of social media content objectives,strategies, and tactics

The objective of this research is to increase understanding about B2B company-led user engagement on social media content. Building on hierarchy-of-effects (HoE) theory, we explore how the world’s leading B2B companies use content objectives (why), strategies (how), and tactics (what) on Twitter. We first integrate B2B advertising and social media research on companies’ content objectives, strategies, and tactics. Then, using qualitative analyses, we examine the existence of objectives, strategies, and tactics in the most engaging tweets (N = 365) of the worlds’ ten leading B2B brands, covering five industries, in 2017. Finally, we quantitatively examine how the use of diverse objectives and strategies differs between the most engaging tweets (N = 318) and least engaging tweets (N = 229) of the companies in 2018. The companies use objectives, strategies and tactics that relate to creating awareness, knowledge and trust, interest, and liking in the majority of their most and least engaging tweets, and express preference, conviction and purchase aspects much less. Differences exist in general, industry-wise, and company-wise. The study is a rare attempt to integrate the extant B2B advertising and social media research, and compare the most and least engaging B2B social media content.     

Servitization in global business-to-business distribution: The central activities of manufacturers

Manufacturers' servitization development is a prevalent trend in the current business world. Companies then aim to increase customer closeness and complement product offerings with services. However, extant literature on distribution and marketing channels literature remains limited in terms of the implications of servitization for global business-to-business distribution. Therefore, this qualitative multiple case study identifies the central activities of servitizing manufacturers in global distribution. The study concludes with the following research propositions: Servitizing manufacturers develop global service portfolios and customize offerings according to local customer characteristics; build global operation models and adjust local service processes; ensure global brand coherency and design the customer experience according to local customer expectations; and create global value propositions and enhance local value co-creation with business customers. The study outlines managerial implications in terms of organizing global distribution. It also discusses new knowledge sharing and capability needs regarding solution sales, service provision and customer relationship management.     

Perception of value delivered in digital servitization

This paper intends to explore the perception of value delivered in digital servitization in a business-to-business context of incumbent manufacturing firms. We investigate how individual entrepreneurial orientation (IEO) influence and affect the adoption of such digital servitization strategies. The observations are made through a survey and empirical assessment across a couple of large industrial organizations interested in servitization and digitalization. Findings contribute to the existing literature on digital servitization and business model innovation by suggesting that IEO influence perceived value in delivering digital service offers, whereas functional affiliation does not. Further observations suggest that digital capabilities can become a crucial enabler for the perception of value delivered in digital business models by providing swift access to data for affected stakeholders.     

Explaining servitization failure and deservitization: A knowledge-based perspective

The literature on servitization suggests that manufacturers benefit from moving towards solution provision and closer integration with customers. Yet, empirical evidence indicates two notable deviations from this accepted wisdom: servitization failure and deservitization. This conceptual article seeks to explain these observed deviations by developing a knowledge-based perspective on servitization. Drawing on literature on knowledge-based theory, organizational search, organizational learning, and organizational capabilities, the article analyses the interorganizational structure of production between the solution provider and its customer. Reconceptualizing the integrated solution offering as a bundle of knowledge components, a coherent theoretical framework is developed for understanding servitization. This framework provides insight into the antecedents and consequences of servitization and offers multiple explanations for servitization failure and deservitization. The knowledge-based perspective also points towards several new avenues for future research on servitization.