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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, p. 29-36Article 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, p. 29-36
Keywords [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, id: diva2:917184
Projects
EDIM - European Doctorate in Industrial Management
Note

QC 20160420

Available from: 2016-04-05 Created: 2016-04-05 Last updated: 2018-05-07Bibliographically approved
In thesis
1. Navigating Manufacturing Firms to Service-led Business Models
Open this publication in new window or tab >>Navigating Manufacturing Firms to Service-led Business Models
2018 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis tackles an increasingly popular phenomenon – servitization of manufacturing – a growth opportunity for industrial firms through a service-led business model. However, implementing a servitization strategy in industrial firms triggers multifaceted challenges and requires further research.The thesis builds on extensive studies of world leading multinational capital equipment manufacturers that develop a successful service business model.

The dissertation builds on three closely interconnected studies. The first study is an in-depth exploratory case study of a Swedish industrial firm by cross-comparing two servitization initiatives—one that was highly successful, and one that was less so. The second study juxtaposes 10 worldwide subsidiaries of the same Swedish industrial firm to compare and contrast how the servitization process unfolded. This study focuses on the management of service capability development, as well as the management of emerging tensions between the product business units and service business units. The third study extends the research scope by analyzing four industrial firms that successfully developed advanced services (e.g. outcome-based contracts).

This thesis contributes to the servitization literature and business model literature by demarcating three business model archetypes for industrial firms: product business model, service business models and outcome business model. This thesis unpacks the content of the business model elements that underpins business model archetypes as well as the configuration and the relationship between the business model elements.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2018. p. 90
Series
TRITA-ITM-AVL ; 2018:13
Keywords
servitization, service transition strategy, service business models, outcome-based contracts
National Category
Business Administration
Research subject
Industrial Economics and Management
Identifiers
urn:nbn:se:kth:diva-227275 (URN)978-91-7729-770-3 (ISBN)
Public defence
2018-06-01, F3, Lindstedtsvägen 26, Stockholm, 14:00 (English)
Opponent
Supervisors
Note

QC 20180509

Available from: 2018-05-07 Created: 2018-05-07 Last updated: 2018-05-09Bibliographically approved

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Jovanovic, MarinEngwall, Mats

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