Identifying service strategies in product manufacturing companies by exploring environment-strategy configurations

Higher market complexity and increasing competitive intensity are forcing traditional product-manufacturing companies to change their position in the goods-services continuum by continuously extending the service business. However, the existing literature tends to be somewhat vague in defining service strategies for manufacturing companies wishing to move along the continuum. The purpose of this study is to identify service strategies that correspond with specific environment-strategy fits. Using an exploratory factor and cluster analysis for testing Western European firms, the study highlights four different service strategies. The four service strategies include after-sales service providers (ASPs), customer support providers (CSPs), outsourcing partners (OPs), and development partners (DPs). After-sales service providers concentrate on cost leadership and ensure proper functioning of the product. Customer support providers form a unique value proposition by investing in a strong product and service differentiation. Outsourcing partners combine cost leadership with service and product differentiation to offer attractive prices for operational services. Their goal is to assume the operating risk and full responsibility for the customer's operating processes. Development partners provide research and development services to create a situation in which customers benefit directly from their development competencies.