Motivations for servitization: the impact of product complexity

Chris Raddats ( University of Liverpool Liverpool United Kingdom of Great Britain and Northern Ireland )
Tim Baines ( Aston University Birmingham United Kingdom of Great Britain and Northern Ireland )
Jamie Burton ( University of Manchester Manchester United Kingdom of Great Britain and Northern Ireland )
Vicky Mary Story ( Loughborough Loughborough United Kingdom of Great Britain and Northern Ireland )
Judy Zolkiewski ( University of Manchester Manchester United Kingdom of Great Britain and Northern Ireland )

International Journal of Operations & Production Management

ISSN: 0144-3577

Publication date: 8 March 2016

Abstract

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.

Citation

Raddats, C., Baines, T., Burton, J., Story, V. and Zolkiewski, J. (2016), "Motivations for servitization: the impact of product complexity", International Journal of Operations & Production Management, Vol. 36 No. 5. https://doi.org/10.1108/IJOPM-09-2014-0447

Download as .RIS

Publisher

:

Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

Please note you might not have access to this content

You may be able to access this content by login via Shibboleth, Open Athens or with your Emerald account.
If you would like to contact us about accessing this content, click the button and fill out the form.
To rent this content from Deepdyve, please click the button.