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.     

Issues in Supply Chain Management: Progress and potential

In a 2000 article in Industrial Marketing Management, “Issues in Supply Chain Management,” Lambert and Cooper presented a framework for Supply Chain Management (SCM) as well as issues related to how it should be implemented and directions for future research. The framework was comprised of eight cross-functional, cross-firm business processes that could be used as a new way to manage relationships with suppliers and customers. It was based on research conducted by a team of academic researchers working with a group of executives from non-competing firms that had been meeting regularly since 1992 with the objective of improving SCM theory and practice. The research has continued for the past 16 years and now covers a total of 25 years. In this paper, we review the progress that has been made in the development and implementation of the proposed SCM framework since 2000 and identify opportunities for further research.     

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.     

Evaluating Wisconsin dairy producer compliance and potential eligibility for international markets under existing European Union and United States Grade “A” bulk tank somatic cell count compliance criteria

A proposal to lower the bulk tank Somatic Cell Count (SCC) maximum for United States of America (US) Grade “A” milk producers was not adopted by the National Conference on Interstate Milk Shipments in 2011 or 2013. The proposal would have made the US Grade “A” limit consistent with many other international standards, including that of the European Union (EU). Some US states, however, have proactively adopted their own SCC limit to mirror the EU limit. The purpose of this study was to analyze the impacts on Wisconsin dairy producers if Wisconsin should adopt the current EU limit and compliance criterion. Analyses were done on SCC results for Wisconsin Grade “A” and Grade “B” dairy producers reported each month to the Wisconsin Department of Agriculture, Trade and Consumer Protection (WDATCP) during January 1, 2009–December 31, 2012. Results were evaluated against the current US Grade “A” and EU compliance criteria for SCC and the percentage of (producer × month) combinations in compliance was determined. If the current EU SCC compliance criterion was in place, 86.7–94.3 and 64.3–77.3% of Wisconsin Grade “A” and “Grade “B” (producer × month) combinations, respectively, would have been in compliance for the years 2009–2012. Compliance of Wisconsin Grade “A” and Grade “B” producers with the existing US SCC compliance criterion during the same period was 99.3–99.7% and 87.9–93.9% (producer × month combinations) respectively. An analysis of a subset of Wisconsin Grade “A” producers indicated that smaller-volume producers were less likely than larger-volume producers to meet the EU criterion.     

Are information asymmetry and sharing good,bad, or context dependent? A meta-analytic review

Information is often distributed asymmetrically in exchange relationships, opening the door for opportunistic behaviors. Yet extant research has found that information asymmetry may decrease opportunism and increase performance in some contexts. Also contrary to expectations, information sharing has been found to decrease performance in some contexts. This study uses meta-analytic techniques to reconcile these contradictory findings. The results indicate that organizational setting, product type, market type, relationship duration, and construct operationalization can account for the inconsistent findings reported in extant research. Of particular interest: 1) information asymmetry is related negatively to performance in goods settings and positively to performance in services settings; 2) information asymmetry produces stronger deleterious effects in interorganizational (versus intraorganizational) settings; 3) information sharing generates stronger favorable effects in consumer (versus industrial) markets; and 4) the negative relationship between information sharing and opportunism is weaker in relationships that are 6 + years old.     

Fundamental transformations of trust and its drivers: A multi-stage approach of business-to-business relationships

This research tests a multistage model of trust in business-to-business (B2B) relationships. The model contains three forms of trust, each with unique drivers and consequences for buyer–supplier relationships. An exploratory qualitative study (N = 38) and four quantitative studies (N_Total = 616) validate the distinct stages (N1 = 140, N2 = 144, N3 = 152) and provide an overall test of the model (N4 = 180), using structural equation modeling techniques. The results support the proposed modeling of the stages and highlight a positive effect of reputation on calculative trust. Conflict resolution, communication, and sympathy positively affect cognitive trust. However, shared values do not significantly drive affective trust. Interdependence also exists among the three trust forms, both directly and indirectly. That is, calculative trust does not affect investments in relationship or confidential communication, but cognitive trust influences these constructs indirectly, through the mediation of affective trust. Affective trust also leads directly to greater investments in relationship and generates additional confidential communication.     

Estimating the demand for ADSL and ISDN services in Greece

The aim of this paper is to investigate the demand for broadband services in Greece and to estimate the price elasticity of the demand for ADSL and ISDN services as well as the cross-price elasticity between the two services. The empirical analysis uses the 384 kbps connections since for the period examined, over 85% of the total ADSL customers in Greece are connected at this bandwidth. The empirical analysis is based on an ad-hoc specification of the demand equation, with no reference to the utility maximization problem of the representative consumer. The results of the analysis show that both demands are inelastic. In addition, cross-price elasticity for ADSL is negative, indicating that ISDN is a complement to ADSL, whereas the demand for ISDN is almost neutral to ADSL.     

Inside-out and outside-in orientations: A meta-analysis of orientation's effects on innovation and firm performance

The inside-out and outside-in orientations place differing levels of emphasis on internal versus external resources and capabilities as sources of competitive advantage. While the inside-out orientation primarily considers organizational resources, followed by competitors and customers (implicitly), the outside-in orientation appears to reverse the order by first examining customers and competitors and then the degree to which the firm responds to them, implicitly addressing organizational resources. Existing empirical evidence does not clarify the comparative effects of inside-out and out-side in orientations on innovation performance. This paper draws on 232 independent studies (N = 38,051) analyzed systematically through a quantitative meta-analytic synthesis in order to develop a detailed contextualized elaboration of the relationships between the inside-out and outside-in orientations and innovation performance. Going beyond the direct effects, we also extend the literature by investigating the moderating effects of industry type (high-tech vs. low-tech), economic development (developed vs. developing countries), and cultural context (collectivist vs. individualist cultures). Our findings shed light on the relative value of inside-out and outside-in orientation for innovation performance, the direct and indirect effects of the two orientations on firm performance, and the conditions under which the effectiveness of each is enhanced.     

Validating the usage of household food acquisition surveys to assess the consumption of ultra-processed foods: Evidence from Brazil

Our ability to research dietary changes over time and their effects on health is limited by challenges in accurately measuring food consumption. In countries where dietary surveys are scarce and rarely nationally representative, household budget surveys may serve as a useful alternative for assessing food consumption. The objective of this study was to evaluate how well household acquisition data reflects the actual intake of ultra-processed foods, using data from the 2008 to 2009 Brazilian Household Budget Survey. The food acquisition module was conducted for all households selected for the survey (n = 55,970) and a subsample corresponding to 25% of the households (n = 13,569) was randomly selected for the individual food intake module, which was conducted for all individuals aged 10 years or older (n = 34,003). Ultra-processed foods were defined as formulations made by the food industry mostly or entirely from substances extracted from foods or obtained with the further processing of constituents of foods or through chemical synthesis, with little if any whole food. Examples included candies, cookies, chips, sugar-sweetened beverages, and ready-to-eat dishes. Our results showed an important agreement between the estimates of ultra-processed food consumption obtained from household acquisition data and individual intake inside-the-home data, particularly for the relative (% of total energy) consumption of these foods. Our study thus indicates that household budget surveys are quite promising for tracking population-level changes in the consumption of ultra-processed foods. The trend toward increased consumption of food away from home in other low- and middle-income countries indicates that future household budget surveys should include the collection of these data.     

Sequestering carbon in soils of agro-ecosystems

Soils of the world’s agroecosystems (croplands, grazing lands, rangelands) are depleted of their soil organic carbon (SOC) pool by 25–75% depending on climate, soil type, and historic management. The magnitude of loss may be 10 to 50 tons C/ha. Soils with severe depletion of their SOC pool have low agronomic yield and low use efficiency of added input. Conversion to a restorative land use and adoption of recommended management practices, can enhance the SOC pool, improve soil quality, increase agronomic productivity, advance global food security, enhance soil resilience to adapt to extreme climatic events, and mitigate climate change by off-setting fossil fuel emissions. The technical potential of carbon (C) sequestration in soils of the agroecosystems is 1.2–3.1 billion tons C/yr. Improvement in soil quality, by increase in the SOC pool of 1 ton C/ha/yr in the root zone, can increase annual food production in developing countries by 24–32 million tons of food grains and 6–10 million tons of roots and tubers. The strategy is to create positive soil C and nutrient budgets through adoption of no-till farming with mulch, use of cover crops, integrated nutrient management including biofertilizers, water conservation, and harvesting, and improving soil structure and tilth.     

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.     

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.     

Social media as a useful tool in food risk and benefit communication? A strategic orientation approach

Although considerable progress has been made in understanding the determinants of risk perception and in identifying the necessary components of effective food risk and benefit communication, this has not been matched with the development of efficient and appropriate communication tools. Little work has been done examining the implications of the explosion of new media and web technologies, which may offer potential for improving food risk and benefit communication. First, this study examines the views of stakeholders (n = 38) and experts (n = 33) in the food domain on the potential use of these emerging media for food risk/benefit communication. Based on in-depth interviews in six European countries (Belgium, Ireland, Italy, Latvia, Spain and The Netherlands), strengths, weaknesses, opportunities and threats (SWOT) of social media in food risk and benefit communication were identified. Second, a Strategic Orientation Round (SOR) was used to evaluate the relative importance of the SWOT components according to stakeholders (n = 10) and experts (n = 13). Results show that both stakeholders and experts confirm a future role of social media in food risk and benefit communication. Strengths as speed, accessibility and interaction make social media an interesting tool in crisis communication or issue awareness raising. Weaknesses as the lack of a filter, low trust, the risk of information overload and a communication preference for traditional media are acknowledged.     

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.     

Pharmaceutical followers

We estimate a model of drug demand and supply that incorporates insurance, advertising, and competition between branded and generic drugs within and across therapeutic classes. We use data on antiulcer drugs from 1991 to 2010. Our simulations show that generics and “me-too” drugs each increased consumer welfare more than $100 million in 2010, holding insurance premiums constant. However, insurance payments in 2010 fell by nearly $1 billion due to generics and rose by over $7 billion due to me-too antiulcer drugs.     

Paths Toward Radical Service Innovation in Manufacturing Companies—A Service‐Dominant Logic Perspective

Research on servitization of manufacturing companies concentrates on typologies of product–service bundles, on transition pathways to increased servitization, and on resource and capabilities configurations necessary to accomplish this transition. Missing from existing research is an analysis of the degree of novelty of service innovations introduced by manufacturing companies. Therefore, this article shifts the focus from the transition process itself to the question of how manufacturing companies can introduce radical service innovations to the market. This article links servitization literature with service innovation literature and investigates how manufacturing companies can introduce radically new services in terms of three forms of innovations: service concept innovations, customer experience innovations, and service process innovations. Service‐dominant logic (SDL) is applied as the theoretical lens because it covers four significant factors influencing the success of companies’ innovation activities: actor value networks, resource liquefaction, resource density, and resource integration. Based on a multiple case study of 24 Danish business‐to‐business manufacturing small‐ and medium‐sized enterprises and through a fuzzy set qualitative comparative analysis, different configurations of the principles of SDL are analyzed. They describe the paths to radical service innovation. Digitalization appears as a central causal condition in the bulk of the configurations. Big and rich data generated internally within the focal company in combination with for instance customer data can enhance the innovativeness of the service offerings. However, digitalization is not a sufficient condition for launching radical service innovation—it should be combined with an efficient mobilization of resources internally within the focal company and/or collaboration with other organizations within the value system. In addition, the analysis hints to a need to detach from immediate customers as the prime driver of service innovation.     

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.     

Irrigation potential and investment return in Kenya

The potential for irrigation investments in Kenya is highly dependent upon geographical, agronomic and economic factors that need to be taken into account when assessing the long-term viability and sustainability of planned projects. This study analyzed large dam-based and small-scale irrigation potential and investment needs for Kenya based on agronomic, hydrological, and economic factors. The analysis of small-scale irrigation expansion shows that the potential for investment in small-scale projects in Kenya ranges from 54,000 ha to 241,000 hectares, with an internal rate of return from 17% to 32%. For the dam-based investment analysis, under low-cost assumption, 58 dams of 73 are profitable (IRR > 0). At high cost level, the number is 52. If we raise the IRR cutoff value to 12%, 32 dams are economically feasible. We showed that there is considerable scope for the expansion of both dam-based and small-scale irrigation in Kenya, and we also provided a strategic prioritization for investments in irrigation schemes and projects.     

Farm production diversity is associated with greater household dietary diversity in Malawi: Findings from nationally representative data

Farm production diversity has the potential to influence the diversity of household diets, an important nutrition outcome associated with the nutrient adequacy of diets and the nutritional status of individuals. Yet, little empirical research has assessed the relationship between farm diversity and diet diversity or the plausible causal mechanisms that may operate between these two constructs. This research examines cross-sectional data from the Malawi Third Integrated Household Survey (IHS3), a nationally representative sample of farming households in Malawi, implemented from March 2010–March 2011 as part of the World Bank Living Standards Measurement Study – Integrated Surveys on Agriculture (LSMS-ISA). These data were used to determine the relationship between farm production diversity and household dietary diversity, and to identify determinants of this relationship. Two indicators of dietary diversity, a modified Household Dietary Diversity Score (HDDS), and the Food Consumption Score (FCS), were calculated along with three indicators of farm production diversity including the Simpson’s Index, a metric accounting for both species richness and evenness. In multiple regression analyses, adjusting standard errors for the complex survey design of the IHS3 and controlling for the effects of several covariates on household dietary diversity, farm production diversity was consistently positively associated with dietary diversity (P < 0.0001). The association of increased farm diversity as measured by a combined crop and livestock measure on dietary diversity was significantly greater in woman-headed households compared to those headed by men (HDDS: P = 0.008; FCS: P = 0.076). The positive association of farm diversity with dietary diversity was also greater in wealthier households (P < 0.05). Consumption of legumes, vegetables and fruits was especially strongly associated with greater farm diversity. More diverse production systems may contribute to more diverse household diets. However, this relationship is complex; it may be influenced by gender, wealth, control of household decisions, the relative market-orientation of a household’s agricultural production, and the specific nature of farm diversity.