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Matching Service Offerings and Product Operations: A Key to Servitization Success
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Industrial Management. Universidad Politécnica de Madrid, Spain; ESADE Business School.ORCID iD: 0000-0001-8542-1848
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Industrial Management.ORCID iD: 0000-0001-9277-0288
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Industrial Management.
2016 (English)In: Research technology management, ISSN 0895-6308, E-ISSN 1930-0166, Vol. 59, no 3, 29-36 p.Article in journal (Refereed) Published
Abstract [en]

Many manufacturers are moving to servitization, but making that move successfully requires considering the underlying business logic of a division or product. Differences in existing conditions, such as product characteristics or other business attributes, may determine success in transition to a services-based business model and create challenges for a firm moving, for instance, from a spare-parts model to advanced service contracts. Our study pinpoints a number of key product attributes that define how far a company can move up the service ladder. The findings suggest that the Power-by-the-Hour model pioneered by Rolls-Royce suits products that constitute critical ancillary input to, and not essential elements of, customers' core processes; that require low initial investments relative to high total costs of ownership; that are used in controllable operating environments with measurable performance requirements; and that are associated with high risk and high costs in the event of failure. Further, the service delivery system must be integrated and orchestrated to be product-specific-that is, aligned with the function and operating conditions of the product in use.

Place, publisher, year, edition, pages
Taylor & Francis Group, 2016. Vol. 59, no 3, 29-36 p.
Keyword [en]
case study, service transition strategy, servitization
National Category
Business Administration
Research subject
Industrial Economics and Management
Identifiers
URN: urn:nbn:se:kth:diva-184866ISI: 000384534300008Scopus ID: 2-s2.0-84964851343OAI: oai:DiVA.org:kth-184866DiVA: diva2:917184
Projects
EDIM - European Doctorate in Industrial Management
Note

QC 20160420

Available from: 2016-04-05 Created: 2016-04-05 Last updated: 2017-06-07Bibliographically approved

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CiteExportLink to record
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Citation style
  • apa
  • harvard1
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  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
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  • fi-FI
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  • nn-NB
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  • Other locale
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Output format
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