What service transition? Rethinking established assumptions about manufacturers' service-led growth strategies |
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| Institution: | 1. Department of Marketing, CERS – Centre for Relationship Marketing and Service Management, Hanken School of Economics, PO Box 479, FIN-00101 Helsinki, Finland;2. Department of Marketing, The University of Auckland Business School, 12 Grafton Rd, Auckland 1142, New Zealand;3. Department of Management and Engineering, Linköping University, SE-581 83 Linköping, Sweden;4. EAWAG, Switzerland, Business Innovation, Environmental Social Science Department, Swiss Federal Institute of Aquatic Science and Technology, CH-8600, Dübendorf, Switzerland;1. Department of Mechanics, Mathematics and Management, Polytechnic University of Bari, Viale Japigia 182, 70126 Bari, Italy;2. Neeley School of Business, Texas Christian University, 2900 Lubbock Avenue, Fort Worth, TX 76109, United States;3. Institute for Manufacturing, University of Cambridge, 17 Charles Babbage Road, CB3 0FS Cambridge, United Kingdom;1. University of Paderborn, Marketing Department, Warburger Strasse 100, 33098 Paderborn, Germany;2. BOMAG GmbH, Hellerwald, 56154 Boppard, Germany;1. Business Ecosystem Research Group, Queen Mary University of London, Mile End, London E14NS, United Kingdom;2. Insper, Rua Quatá 300, 04546-042 Vila Olímpia, São Paulo, Brazil;3. Manchester Business School, Booth Street West, Manchester, M156PB, United Kingdom;4. Discipline of Marketing, University of Sydney Business School, Sydney, Australia |
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| Abstract: | Both academics and practitioners emphasize the importance for product firms of implementing service-led growth strategies. The service transition concept is well established, namely a unidirectional repositioning along a product-service continuum—from basic, product-oriented services towards more customized, process-oriented ones—ultimately leading to the provision of solutions. We challenge this service transition assumption and develop alternative ones regarding how product firms should pursue service-led growth. Using ‘problematization methodology’, and drawing on findings from thirteen system suppliers, we identify three service-led growth trajectories: (1) becoming an availability provider, which is the focus of most transition literature; (2) becoming a performance provider, which resembles project-based sales and implies an even greater differentiation of what customers are offered; and, (3) becoming an ‘industrializer’, which is about standardizing previously customized solutions to promote repeatability and scalability. Based on our critical inquiry, we develop two alternative assumptions: (a) firms need to constantly balance business expansion and standardization activities; and (b) manage the co-existence of different system supplier roles. Finally, we consider the implications for implementing service-led growth strategies of the alternative assumptions. |
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