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Servitization Strategy and Managerial Control
Type: Book
ISBN: 978-1-78714-845-1

Article
Publication date: 1 January 1997

In the Theory of Continuous Competitiveness (CC) developed in Chapter 1, we specified two sufficient conditions, one of which, PSPG Ratio, is found to integrate IMP2 [Industrial…

Abstract

In the Theory of Continuous Competitiveness (CC) developed in Chapter 1, we specified two sufficient conditions, one of which, PSPG Ratio, is found to integrate IMP2 [Industrial Master Plan 2] strategic thrusts 1 and 2. Customized hitech products (PS: Performance‐Specific products) are first demanded in small quantities in Country XYZ. In a few months, as demand increases, the PS products will be offered as PG (Performance‐ General) products of mass manufacture in Countries LMN, PQR, etc. The PSPG Ratio calibrates CC. To achieve CC, Malaysia has to decide whether, emulating the experience of developed countries, the share of manufacturing in GDP should be 30%, instead of the 38.4% projected for the year 2005. Similarly, Malaysia has to decide whether the Services Sector should be 48.4% of GDP as it is projected to be in the year 2005. Even Don Tapscott who swears by the inexorable convergence of what we have called 3C (computer, communication, content) industries, says that Services are not the source of income: “The planet, and even the Western World, still relies on agricultural and industrial production for the creation of wealth and the meeting of basic human needs. You can't eat or live on information.” If nearly half of Malaysian GDP is going to be not the means of production, but the means of consumption, it behooves us to find a viable means of production. We examine Information Technology (IT) as a candidate means of production. IT Industry is half Products and half Services. What should be the nature and magnitude of Malaysian IT products? If we keep the manufacturing share of GDP at the norm of 30% experienced by developed countries, that would release 8.4 percentage points of GDP from the current projection for the year 2005. Similarly, if we reduce the GDP share of Malaysian Services Sector to 40%, that would release another 8.4 percentage points. If we assign the former to IT Products, and the latter to IT Services, each should have a value of RM 36.2076 million in current prices in the year 2005. The RM 36.207 million in IT Products should generate RM 128.4 billion in IT exports in the year 2005, or each RM worth of IT products should generate RM 3.55 in exports. If domestic consumption is to be a third as much as the exports, each RM of IT products should generate RM 1.18 for domestic consumption. Each RM of IT should thus produce (3.55 + 1.18=) RM 4.73 for exports and domestic consumption. IT is also expected to be the engine of development. Based on the growth of GDP between 1995 and 2005 in the IMP2, the IT Sector should generate 50 sens in the rest of the economy for each RM of IT. Thus, each RM in IT Products should generate (4.73 + 0.50=( RM 5.23 (rounded to RM 5.00) in the year 2005. We are talking of new machine‐producing (cloning) IT machines worth 60% of 1995 Malaysian exports of semi‐conductors, computers/peripherals, and consumer electronics as the necessary stock of IT capital in the year 2005, each unit of which is to produce five times its value in output in the year, for a start.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 9 no. 1/2
Type: Research Article
ISSN: 1355-5855

Article
Publication date: 1 September 2002

Kieren Mayers, Chris France, Ann Cleverly, Eletherios Kabouris and Susanna Planas

New European environmental legislation requiring producers to recycle electrical and electronics products at so‐called “end‐of‐life” is likely to introduce new areas of…

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Abstract

New European environmental legislation requiring producers to recycle electrical and electronics products at so‐called “end‐of‐life” is likely to introduce new areas of competition to the global market for information technology (IT) products. This paper presents the findings of a study investigating the use and disposal of IT equipment by 151 companies in the UK. Although 71 per cent of companies disposed of their equipment as waste, other “disposal” routes were found to be of greater significance, such as charitable donations, transfer to employees, and resale to second‐hand dealers. Therefore it is argued that the current legal definition of “waste” may be too restrictive to be applied to end‐of‐life IT equipment within the commercial sector. In addition, it is argued that the provision of product “end‐of‐life management” services to commercial customers (in compliance with legislation or otherwise) could help IT producers add value to their existing support services beyond the immediate production and consumption of new technologies. Where only 5 per cent of companies replaced IT products within two years, 76 per cent of respondents identified a need for such services. Specific details of the type of services that would be required have also been investigated and evaluated.

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Journal of Business & Industrial Marketing, vol. 17 no. 5
Type: Research Article
ISSN: 0885-8624

Keywords

Article
Publication date: 1 March 1995

Martin Fojt

That someone can make us feel good is a quality in itself. There has been much talk within British government circles, for example, about “the feelgood” factor, which is…

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Abstract

That someone can make us feel good is a quality in itself. There has been much talk within British government circles, for example, about “the feelgood” factor, which is constantly reminding us that it is just around the corner! Whether or not we can believe in this is another matter but it certainly displays an awareness that making other people feel good can also have positive benefits for ourselves. How this can be achieved will differ depending on our particular line of business. Having a good‐quality product does not in itself guarantee success as service quality must also be taken into account. This is where the feel‐good factor comes into play. It is all very well, for example, going to a restaurant to have a top‐class meal (in that the food was good), only to have it thrown at you. Quality, therefore, must not be seen as a separate entity, but more as a package deal. Service quality is important if you wish to retain your customer base as acquiring new customers can be both time‐consuming and costly. It quite often takes very little apart from good manners to keep customer loyalty as in the case of the restaurant. Other factors can, however, start creeping into the framework such as efficiency, timeliness and good communication. Is there, for example, a time limit on how long you can reasonably be expected to wait for your meal before it arrives at the table, and if there is a delay is this communicated to you? In other words, we all have expectations as to what is acceptable and what is not. The clever part is for the organization to learn by what criteria the customer judges its service quality performance.

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Journal of Services Marketing, vol. 9 no. 3
Type: Research Article
ISSN: 0887-6045

Article
Publication date: 17 January 2023

Torben Juul Andersen and Søren Bering

The aim of this study is to gain important insights on integration oriented servitization identifying essential dimensions of effective structures, coordination approaches and…

Abstract

Purpose

The aim of this study is to gain important insights on integration oriented servitization identifying essential dimensions of effective structures, coordination approaches and management controls adopted by manufacturing firms that integrate forward towards distribution, sales and services.

Design/methodology/approach

The study adopts a theory-guided qualitative abductive methodology to conduct a comparative case-study of two manufacturing firms in the same industry integrating forward to enhance servitization but with significantly different performance outcomes. The findings are uncovered from a broad spectrum of primary and secondary data spanning two decades.

Findings

The consistently high-performing firm puts equal emphasis on production and downstream distribution, sales and services and motivate individuals to engage in entrepreneurial efforts to develop combined product-services offerings that are valued by customers. The underperforming firm prioritizes operating efficiency driven by engineering prowess and managed through planning, standardization, authority and central controls.

Research limitations/implications

The study is based on two representative firms operating in a specific industry context, which has ramifications for the generalizability of results and calls for replication studies to substantiate and extend findings.

Practical implications

Forward integration from manufacturing into distribution, sales and services represents a specific servitization strategy that needs structure and particular coordination approaches to be effective in complex dynamic product-markets. The characteristics of the outperforming case company provide useful insights on effective integrated servitization efforts.

Social implications

Forward integration is a commonly adopted strategy among manufacturing firms that constitute the backbone of modern economies and effective governance of these integration oriented servitization efforts has important implications for societal value creation.

Originality/value

This study builds on rationales from management science including economic theory, corporate strategy and different micro-foundational lenses and thereby hone recent calls for broader theoretical foundations to enlighten studies of the servitization puzzle.

Details

International Journal of Operations & Production Management, vol. 43 no. 10
Type: Research Article
ISSN: 0144-3577

Keywords

Article
Publication date: 29 September 2020

Jiaqing Xu, Weiling Jiao, Hao Chen and Yufei Yuan

Free trial is an effective strategy to gaining users’ data so as to strengthen and optimize product design. The purpose of this paper is to understand the IT companies' dynamic…

Abstract

Purpose

Free trial is an effective strategy to gaining users’ data so as to strengthen and optimize product design. The purpose of this paper is to understand the IT companies' dynamic decision-making behavior in the free trial of IT products and services context based on a three-stage theoretical framework and users' decision-making behavior in the respective stage.

Design/methodology/approach

A three-stage methodology is proposed to clarify relevant decision problems and actions in each stage from IT companies' and users' perspectives, respectively. It then investigates relating variables on IT companies' decision-making based on extant research and users' decision-making.

Findings

In this study, the authors argue that the IT companies have to make the offering, implementation and retention decision in different stage during the whole free trial process. Each decision is determined by several variables from their own and users, namely the offering decision is determined by product characteristics, network effects, product life cycle and WOM (word of mouth); the implementation decision is determined by the quality of products and services, trial type, incentive measures on user's usage and communication strategy; and the retention decision is determined by the product and price strategy.

Practical implications

The results are practical and can be used by IT companies as a decision basis or reference to make reliable decisions so that IT companies can take target measures to ensure the effectiveness of their free trial strategy so as to meet their users' needs based on products designed by data driven. Thus, the ultimate goal of supply chain management is achieved.

Originality/value

In this study, the decision-making process in the free trial of IT products and services context is investigated as a whole for the first time. From the IT companies' perspective, the process includes offering, implementation and retention decision stages, which are continuous and inseparable. The variables that determine IT companies' decision-making are identified based on users' decision and action. Hence, it represents a brand-new whole process perception to clearly understand the dynamic of the IT companies' decision-making. Considering users' decision and action, the final decisions of the IT companies will be more practical in respect of motivating, retaining and upgrading users.

Details

Journal of Enterprise Information Management, vol. 34 no. 1
Type: Research Article
ISSN: 1741-0398

Keywords

Article
Publication date: 25 April 2008

Heiko Gebauer, Regine Krempl and Elgar Fleisch

The primary objective of this paper is to explore antecedents for developing different types of services. A second objective is to address the neglected role of service…

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Abstract

Purpose

The primary objective of this paper is to explore antecedents for developing different types of services. A second objective is to address the neglected role of service development in manufacturing firms.

Design/methodology/approach

A qualitative research approach is used. While the study is qualitative due to its context, it is positioned between deductive and inductive qualitative studies, being neither a test of an already developed theory nor a development of a new theory. Rather, it is an extension of existing theories on service development through dialectic interaction between field studies and existing theory.

Findings

The findings suggest that three types of service (customer service, product‐related services, and customer support services) differ in their configuration of antecedents for service development.

Research limitations/implications

The study is based on case‐study research, but the external validity (generalisability) of the antecedents could not be assessed. Future research would benefit from insights obtained from quantitative data.

Practical implications

The combination of different service types and antecedents forms a model that can guide managers in typical product manufacturing companies who wish to extend the service business by developing services successfully.

Originality/value

Based on three in‐depth case studies and 18 bi‐polar mini cases, this paper explores the relationship between types of services in manufacturing companies and typical antecedents that are necessary for service development.

Details

European Journal of Innovation Management, vol. 11 no. 2
Type: Research Article
ISSN: 1460-1060

Keywords

Article
Publication date: 9 March 2021

Emmanuel Mogaji, Ogechi Adeola, Robert Ebo Hinson, Nguyen Phong Nguyen, Arinze Christian Nwoba and Taiwo O. Soetan

This study aims to explore how banks in Nigeria are marketing financial services to financially vulnerable customers.

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Abstract

Purpose

This study aims to explore how banks in Nigeria are marketing financial services to financially vulnerable customers.

Design/methodology/approach

A multiple case study research strategy was used to analyse three commercial banks and two microfinance banks. Data were collected using semi-structured interviews with the banks' directors as well as from banks' published annual reports and archival images.

Findings

The study reveals that Nigerian banks develop different product development portfolios, adopt innovative traditional marketing schemes and apply inclusive technologies to reach and extend services to the unbanked and financially vulnerable customers in the society.

Research limitations/implications

Banks should focus on consumer engagement through the proactive development of technologies and employ innovative marketing methods. Customers' banking experiences can be enhanced if banks communicate with and educate customers about technological modes of engagement. In addition, financial service transaction support and financial literacy education can assist banks in marketing their services to financially vulnerable customers, in mutually beneficial ways.

Originality/value

This study shows how financial service operators' market and extend their services to financially vulnerable customers in emerging markets. It empirically establishes the importance of financial services to financially excluded customers.

Details

International Journal of Bank Marketing, vol. 39 no. 3
Type: Research Article
ISSN: 0265-2323

Keywords

Abstract

Details

Servitization Strategy and Managerial Control
Type: Book
ISBN: 978-1-78714-845-1

Article
Publication date: 2 May 2017

Henry H. Bi

A product or service usually has multiple measurable characteristics, and its performance on different measures may vary and may change over time. Multi-criterion and multi-period…

Abstract

Purpose

A product or service usually has multiple measurable characteristics, and its performance on different measures may vary and may change over time. Multi-criterion and multi-period performance benchmarking presents a challenge for management to determine performance gaps among comparable products or services. The purpose of this paper is to propose a new performance benchmarking method to address this challenge.

Design/methodology/approach

The author develop this method by formulating two benchmarking functions: a differentiation function based on Shewhart average and standard deviation charts to distinguish the performance of products or services on a single measure, and a categorization function to classify each product’s or service’s overall performance across all measures. By systematically removing the lowest-performing products or services from comparison, the author use these functions iteratively to detect performance gaps.

Findings

Using this method, the author find performance gaps in each of three benchmarking applications of airports, hotels, and minivans, although a number of performance gaps are not obvious from the raw data.

Research limitations/implications

This benchmarking study focuses on the quantifiable outcome performance of products and services.

Practical implications

This benchmarking method is generic and applicable to most products and services. It is robust not only for discovering performance gaps, but also for providing useful insights for managers to prioritize improvement efforts on individual performance measures.

Originality/value

The novelty of this benchmarking method lies in that it can not only find the “best overall” products or services for all performance measures, but can also pinpoint the “best-in-class” products or services as well as performance gaps for each performance measure. In addition, this paper presents several original ideas for performance benchmarking, including: using the control limits of Shewhart control charts to categorize performance gaps, systematically removing the lowest-performing products or services from comparison for the purpose of detecting hidden performance gaps, and using symbolic expressions to integrate benchmarking results from all measures and to show all performance gaps intuitively.

Details

Benchmarking: An International Journal, vol. 24 no. 4
Type: Research Article
ISSN: 1463-5771

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