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A big upsurge for sophisticated intelligent sensors is tipped by leading market watchers, as Stephen McClelland found out.

The competence-based management approach has shed light on how firms represent open systems that link assets, strategic logic, and capabilities in order to create new competences. Nonetheless, we find that there are too few empirical studies that illustrate how competences are distributed within an industry. The following case study is based on an in-depth analysis of innovation and standards-formation in industrial automation. Two examples, the standard-setting community PROFIBUS and the field bus-related sensor consortium IO-Link are used to analyze partnership arrangements and competence-distribution patterns.

This study is based on qualitative interviews and it uses patent data to judge competences of a standard-setting community's partner firms. Referring to the empirical case of IO-Link, we show how the integrator firms’ competence-leveraging can be significantly affected by new technology approaches that reason a novel deployment of capabilities. It seems that the deployment of resources depends not only on industry segmentation, but also on the firms’ coordinated agenda concerning innovative, new functionality of a given standard. Our patent analysis also mirrors the variety of knowledge within a standard-setting community. Furthermore, we develop a concept of layered business systems, that is, a terminology of knowledge, organizational, and technology domains. Standard-setting communities bundle complementarity assets, they make their member firms create both proprietary and open technology, and they integrate knowledge across industry boundaries.

Information and communication technology (ICT) is a key enabler for new product‐ and process‐oriented services. The purpose of this paper is to investigate how ICT can enable service differentiation and, in doing so, act as a catalyst for a service business orientation.

The paper is based on a qualitative, multi‐case research design with eight multinational goods manufacturers.

The paper identifies two distinct types of service‐oriented differentiation: services in support of the product (SSP) and services in support of the client's actions (SSC). The study finds that SSC have the largest positive impact on firms' service business orientation.

Western firms in a limited sample of industries are studied. Furthermore, the service business orientation construct does not include any measurements of service profitability or impact on overall competitive advantage.

To various extents, successful firms are likely to pursue both SSP and SSC differentiation traits through ICT. The two options are interdependent and the framework presented helps managers to understand both key specificities and their interrelatedness.

The study contributes to theory on service strategies by specifically focusing on the enabling role of ICT for new services and its effects on each of the three dimensions of the service business orientation construct.