2134/18679
Chris Raddats
Chris
Raddats
Tim Baines
Tim
Baines
Jamie Burton
Jamie
Burton
Victoria Story
Victoria
Story
Judy Zolkiewski
Judy
Zolkiewski
Motivations for servitization: the impact of product complexity
Loughborough University
2015
Capability
Complexity
CoPS
Motivation
Resources
Servitization
Business and Management not elsewhere classified
2015-09-09 13:54:14
Journal contribution
https://repository.lboro.ac.uk/articles/journal_contribution/Motivations_for_servitization_the_impact_of_product_complexity/9503363
Purpose
To identify the commonalities and differences in manufacturers’ motivations to servitize.
Design/methodology/approach
UK study based on interviews with 40 managers in 25 companies in 12 sectors. Using the concept of product complexity, sectors were grouped using the Complex Products and Systems (CoPS) typology: non-complex products, complex products, and systems.
Findings
Motivations to servitize were categorised as competitive, demand-based (i.e., derived from the customer) or economic. Motivations to servitize vary according to product complexity, although cost savings and improved service quality appear important demand-based motivations for all manufacturers. Non-complex product manufacturers also focus on services to help product differentiation. For CoPS manufacturers, both risk reduction and developing a new revenue stream were important motivations. For uniquely complex product manufacturers, stabilising revenue and increased profitability were strong motivations. For uniquely systems manufacturers, customers sought business transformation, whilst new service business models were also identified. Research limitations/implications
Using the CoPS typology, this study delineates motivations to servitize by sector. The findings show varying motivations to servitize as product complexity increases, although some motivational commonality existed across all groups.
Manufacturers may have products of differing complexity within their portfolio. To overcome this limitation the unit of analysis was the SBU.
Practical implications
Managers can reflect on and benchmark their motivation for, and opportunities from, servitization, by considering product complexity.
Originality/value
The first study to categorise servitization motivations by product complexity. Identifying that some customers of systems manufacturers seek business transformation through outsourcing.