Integration,knowledge creation and B2B governance: The role of resource hierarchies in financial performance

Knowledge is a critical competitive resource for firms that increasingly exploit resources and capabilities combined with those of channel partners to create new knowledge. However, the opportunism risks inherent in any B2B relationship require firms to employ governance mechanisms to protect their interests. These tensions call for further study of how B2B partners exploit combined resources to produce new knowledge. This research employs a Resource Hierarchy View of resource bundling to describe the ways that firms integrate internal and external processes to achieve financial performance through knowledge creation, and the role that relational governance approaches play in enabling those resource combinations. The study finds that normative and formalized governance forms both enable complex combinations of knowledge creation and integration resources in a way that affects financial performance more than either resource could in simpler combination. However, there are differences in how knowledge is created through internal and external process integration.     

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.     

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.     

生产服务型企业差异化服务能力对竞争优势的影响：以钢铁行业为例

随着市场复杂性和竞争强度的日益加剧,传统的工业贸易企业逐渐向生产服务型企业转型,从而使得原来以产品传递为特点的运作,变成了以与客户互动为基础的集成服务运作。然而,以往的研究对与不同客户需求之间的互动如何影响生产服务型企业战略分析较少。文章以中国钢铁行业的调研数据和资料为基础,运用实证方法。分析了生产型服务企业的服务能力,即资源供应、需求管理以及客户战略匹配等三种形态。研究发现对不同的下游客户,差异化的服务能力对竞争优势的形成产生了不同的影响,对于大型企业,资源的供应能力和战略匹配是决定生产服务型企业竞争力的主要来源,而对于中小型企业,资源供应能力和需求管理是形成竞争力的源泉。     

Harnessing marketing automation for B2B content marketing

The growing importance of the Internet to B2B customer purchasing decisions has motivated B2B sellers to create digital content that leads potential buyers to interact with their company. This trend has engendered a new paradigm referred to as ‘content marketing.’ This study investigates the organizational processes for developing valuable and timely content to meet customer needs and for integrating content marketing with B2B selling processes. The results of this single case study demonstrate the use of marketing automation to generate high-quality sales leads through behavioral targeting and content personalization. The study advances understanding of the organizational processes that support content marketing and shows how content marketing can be combined with B2B selling processes via marketing automation in ways that achieve business benefits.     

Relation‐specific capabilities and barriers to knowledge transfers: creating advantage through network relationships

This study examines the role of network knowledge resources in influencing firm performance. More specifically: Can a firm that uses the identical supplier network as competitors and purchases similar inputs from the same plants achieve a competitive advantage through that network? In a sample of U.S. automotive suppliers selling to both Toyota and U.S. automakers, we found that greater knowledge sharing on the part of Toyota resulted in a faster rate of learning within the suppliers' manufacturing operations devoted to Toyota. Indeed, from 1990 to 1996 suppliers reduced defects by 50 percent for Toyota vs. only 26 percent for their largest U.S. customer. The quality differences were found to persist within suppliers because the inter‐organizational routines and policies at GM, Ford, and Chrysler acted as barriers to knowledge transfers within suppliers' plants. These findings empirically demonstrate that network resources have a significant influence on firm performance. We also show that some firm resources and capabilities are relation‐specific and are not easily transferable (redeployable) to other buyers or networks. This result implies that a firm may be on its production possibility frontier for each customer but the productivity frontier will be different for each customer owing to constraints associated with the customer's network. Copyright © 2006 John Wiley & Sons, Ltd.     

Developing integrated solutions: The importance of relationships within the network

Firms that have traditionally focused on selling products, spare parts and services face difficulties with increasing competition and declining margins. They are therefore turning to new strategies where products and services are integrated into so-called integrated solutions. Research on the challenges this presents is sparse, but there is evidence that internal factors as well as external relationships play an important role. In this paper we investigate the relationships within the business network in order to uncover some of the complex issues related to integrated solutions, including how and to what extent these relationships facilitate or impede the development of integrated solutions. Two case studies of one more and one less successful initiative within the same firm are used to illustrate challenges and possible success factors for the development of integrated solutions in the capital goods industry.The paper identifies the following six factors as important when developing integrated solutions: the strength of the relationships between the different actors involved, the firm's position in the network, the firm's network horizon, the solution's impact on existing internal activities, the solution's impact on customers' core processes, and external determinants. It shows that inter- and intra-firm relationships can both enable and obstruct the development of integrated solutions. For the firms involved in the development of integrated solutions, it becomes crucial to manage this duality.     

Competitive Advantage Through Product Performance Innovation in a Competitive Market

Superior product performance does not necessarily ensure commercial success. In many industries, companies seek competitive advantage primarily through product innovation. Competition in such markets is based on claims of technological superiority. However, unless a company can clearly establish the superiority of its products in its customers' minds, a differentiation strategy based on relative product performance is likely to be ineffective. This is particularly true in markets characterized by numerous product introductions from many competitors.
Product innovation success declines as the intensity of market competition increases. This may be caused by customers' inability to differentiate products on the basis of functional performance. John H. Friar tests this hypothesis by examining an industry, medical diagnostic ultrasound equipment, that is characterized by frequent product introductions from numerous companies.
Technical experts from the competing manufacturers believe there are differences in the image quality of their equipment and strongly agree on the factors that distinguish better performance. In most cases, however, customers could not distinguish product performance. Ironically, in a market where everyone is competing by improving product performance, product performance innovation alone may not be enough to create meaningful differentiation.
To succeed in such an environment, companies must compete on two levels. Continued emphasis on product innovation is necessary to keep pace with the competition. However, because product innovation alone is not sufficient to provide market differentiation, companies must shift their competitive thrust to other dimensions.     

Effective product-service systems: A value-based framework

Manufacturers increasingly engage in servitization and as a result offer services in combination with their products (i.e., product-service systems, PSS). However, while servitization in theory seems to be a promising strategy, in practice, the bundling of services with product offerings does not always result in the expected performance outcomes. In this paper, we propose a framework that helps manufacturers to overcome this servitization paradox. The underlying premise of our framework is the need to give primacy to the value customers derive from PSS. The framework builds on the idea that products and services differ with regard to the value that is created by the tangible elements and the interaction moments between manufacturers and customers; this is presented in a 2 × 2 matrix. Subsequently, this paper provides guidelines for identifying PSS that are effective in terms of value creation. First, the product and service elements of the PSS should have sufficient autonomous value to be sold separately on the market. Secondly, they should come from different quadrants of the 2 × 2 matrix. Lastly, the combination of product and service elements should create synergy. Through a survey among product and service developers and an experimental auction among customers we validate our ideas.     

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.     

Challenges of servitization: A systematic literature review

The challenges of servitization have gained significant attention from both academics and practitioners, as more firms in the industrial sector are seeking marketing opportunities leading to business growth through the adoption of a service strategy. Although existing research has explored its challenges from multiple perspectives, this is largely fragmented and the studies offer little understanding of the impacts of the challenges on the realisation of servitization benefits and improvements in business performance. This study, therefore, aims to create a formal construct of the challenges and develop a set of hypotheses through a systematic review of the servitization literature to build a theoretical model explaining the underlying relationships. Five challenges are identified: organisational structure, business model, development process, customer management, and risk management. The indicators of each challenge are discussed to support the establishment of hypotheses. This study contributes to the current body of knowledge by reaching a clear conclusion from the fragmented literature and brings together five challenges to explore their impacts on the overall business.     

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.”     

Customer value anticipation, customer satisfaction and loyalty: An empirical examination

A service-dominant logic by definition is inherently customer oriented and relational, reflecting deeper and more complex connections between suppliers and customers. The service mindset driving increased collaboration enables suppliers to have deeper insights to what customers' value. Customer value perceptions are dynamic, sometimes in constant flux, necessitating anticipatory capabilities on the part of suppliers. Yet, there is a notable lack of discussion about customer value anticipation and related empirical evidence of whether or not customers care if suppliers anticipate what they value. The authors report on two survey studies that test using structural equation modeling the notion that suppliers good at anticipating what customers will value realize higher customer satisfaction and loyalty. Understanding this relationship is critical for marketing managers wrestling with allocation of limited resources. We find that customer value anticipation is a strong driver of satisfaction and loyalty, with satisfaction acting as a mediator for loyalty.     

Servitization: A contemporary thematic review of four major research streams

Servitization describes the addition of services to manufacturers' core product offerings to create additional customer value. This study aims to identify the key themes and research priorities in this body of literature over thirteen years from 2005 and 2017, based on four major research streams (general management, marketing, operations, and service management). Prior multi-theme literature reviews have focused on operations journals, overlooking important work in other streams, particularly marketing. Informed by a systematic literature review of 219 papers, the study identifies five main themes: service offerings; strategy and structure; motivations and performance; resources and capabilities; service development, sales, and delivery. Within each theme, gaps in the literature are identified and eleven research priorities presented. The review shows that the literature has evolved significantly in recent years, becoming increasingly diverse. A recent noteworthy topic is the use of digital technologies, which indicates the increasing relevance of technological developments to manufacturers' service activities. Our review highlights that there are still some fundamental aspects of servitization that warrant further research, primarily the need to replace the focal-manufacturer perspective with a multi-actor perspective that highlights the important role of relationships with existing and potentially new actors as a result of technological developments.     

Marketing of competence-based solutions to buyers in exploratory relationships: Perspective of OEM suppliers

In face of mounting challenges from delocalized production, commoditized products, and escalated demand from professional buyers, providing solutions rather than selling products has been put forward in the normative literature as a promising business model for creating high-value differentiated offerings. Nonetheless, empirical survey research into the processes whereby traditional suppliers of “basic products, spare parts and services” migrate towards marketing of “integrated solutions” is still sparse. Grounded in a competence-based marketing view, the current research addressed the research problem of how OEM suppliers upgrade their value offerings via competence-based solutions. The research model was tested by a sample of 403 contract/OEM manufacturers located in China. This resultant findings revealed the processes undertaken by OEM suppliers during the development of competence-based solutions, found out the internal coordination and innovation capabilities required to support competence-based solutions, and uncovered the external communication/disclosure of competence needed to strengthen the link between competence-based solutions and upgraded relationship value.     

Managing value in use in business markets

Suppliers in business markets are increasingly providing complex offerings, which is reflected in concepts like hybrid offerings, servitization and solution business. Such complex offerings are characterized by value propositions in which the value that emerges throughout the entire customer usage cycle builds the core element. To secure and increase this value in use, as perceived by the customers, suppliers need to establish activities of value-in-use management. This value-in-use management comprises monitoring the delivery of the promised value, and enhancing customer value in use throughout the entire lifecycle of a complex offering. This article investigates which value-in-use management activities are currently implemented by suppliers, how these activities are linked to other business processes, and what differences in value-in-use management activities exist between various types of complex offerings. By addressing these questions, this research contributes to literature by exploring post-deployment processes that affect value in use customer experience when using complex offerings. Moreover, from a managerial perspective, it reveals in which constellations measures of value-in-use management are currently implemented in practice and therefore are of particular importance. Furthermore, the results of the study may serve as a starting point to elucidate how measures of value-in-use management can be implemented successfully.     

An exploratory study into brand alignment in B2B relationships

B2B relationships are characterized by strategic partnerships between firms and the suppliers of goods and services integral to their offerings. Failure to choose the right partner could jeopardize the survival of both partners. While a number of studies suggest that partnering firms need to be aligned operationally, few studies look at whether there should be alignment between the brands of firms and their suppliers. Therefore, we build on existing studies on sexual selection to develop a theory of whether similarity in brand attributes affects the success of B2B relationships. We propose that firms wishing to portray particular brand images to their customers choose suppliers whose images mirror their own. To develop our proposition, we investigate the brand personality alignment between well-known firms and their suppliers in four industries. The findings of our analysis have significant implications for scholars and managers interested in the nature and success of B2B partnerships.     

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.     

Organizing for solutions: Systems seller vs. systems integrator

This paper aims to examine how firms are organizing to provide integrated solutions: a business model for the supply of capital goods based on the provision of products and services as integrated solutions to individual customer's needs. The industrial marketing literature suggests that the origins of this business model can be traced back to early 1960s when firms adopted strategies and organizations for ‘systems selling’. The marketing literature helps us to identify two contrasting types of organizations: (1) the vertically-integrated systems seller that produces all the product and service components in a system; and (2) the systems integrator that coordinates integration of components supplied by external firms. The paper uses these two ideal types to analyse the strategies and organizations of five case study firms that have recently attempted to move into the provision of integrated solutions. It argues that there is no evidence to support the continuing dominance of the systems seller or a simple transition from systems selling to systems integration. A more complex pattern of organizational forms is emerging, combining elements of both systems selling (i.e. vertical integration into services) and systems integration.     

Supplier traits for better customer firm innovation performance

Previous research on embedded ties with suppliers in an innovation context has ignored the need for customer firms to assess and select suppliers on the basis of market orientation strategies and relationship marketing attributes. To address this void, this study investigates the effects of suppliers' downstream customer orientation and supplier-customer homophily (i.e., similarity of the supplier and the customer) on the customers' innovation performance. Data pertaining to new product development projects with contributions from supplier firms was collected on both sides of the supplier-customer dyad. The analysis shows that downstream customer orientation and supplier-customer homophily have a significant impact on the customer firms' new product efficiency (i.e., project cost and project speed) and new product effectiveness (i.e., innovativeness), which in turn positively influence new product performance in terms of profitability, market share, and growth.