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Article
Publication date: 7 September 2010

Anees Gopalani

Confronted by lower product sales prospects, increased margin pressures and customer demands for free service support, many firms are entering the service business. Yet

Abstract

Purpose

Confronted by lower product sales prospects, increased margin pressures and customer demands for free service support, many firms are entering the service business. Yet most of these firms will be unable to scale their service operations to develop a viable stand‐alone services capability. In the rare cases where they are successful in establishing a services business it will often fail to deliver the expected profit margins. However, when properly planned and executed, a products to services business transformation generates impressive results. this paper aims to investigate this issue.

Design/methodology/approach

The paper defines how to scale services business. Key challenges and mitigation approaches as well as case studies are provided to effectively execute on services transformation. Various challenges and their effects are examined separately. Several tactics to overcome some of the key challenges identified.

Findings

When managed properly, new services businesses can deliver solid economic value to the top and bottom line. In order to capture this value, managers must look at services through a very different lens, understanding that this is a fundamentally different business model than their existing product business. It is recommended managing the entire services value chain to realize the full benefits of creating independent services revenue stream, increased product pull‐through, and deeper customer relationships.

Originality/value

By considering various obstacles a company faces in scaling services business, the paper provides insight into what strategies may be effective as established companies deal with balancing existing product‐centric business while scaling services business.

Details

Journal of Business Strategy, vol. 31 no. 6
Type: Research Article
ISSN: 0275-6668

Keywords

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Article
Publication date: 1 February 2018

Joy M. Field, Liana Victorino, Ryan W. Buell, Michael J. Dixon, Susan Meyer Goldstein, Larry J. Menor, Madeleine E. Pullman, Aleda V. Roth, Enrico Secchi and Jie J. Zhang

The purpose of this paper is to present exciting and innovative research questions in service operations that are aligned with eight key themes and related topics…

Abstract

Purpose

The purpose of this paper is to present exciting and innovative research questions in service operations that are aligned with eight key themes and related topics determined by the Journal of Service Management (JOSM) Service Operations Expert Research Panel. By offering a good number of such research questions, this paper provides a broad range of ideas to spur conceptual and empirical research related to service operations and encourage the continued creation of deep knowledge within the field, as well as collaborative research across disciplines that develops and incorporates insights from service operations.

Design/methodology/approach

Based on a Delphi study, described in the companion article, “Service Operations: What Have We Learned?,” the panel identified eight key research themes in service operations where leading-edge research is being done or has yet to be done (Victorino et al., 2018). In this paper, three or four topics within each theme are selected and multiple questions for each topic are proposed to guide research efforts. The topics and questions, while wide-ranging, are only representative of the many ongoing research opportunities related to service operations.

Findings

The field of service operations has many interesting research topics and questions that are largely unexplored. Furthermore, these research areas are not only increasingly integrative across multiple themes within operations but often transcend functional disciplines. This creates opportunities for ever more impactful research with a greater reach throughout the service system and suggests that service researchers, regardless of functional affiliation, can contribute to the ongoing conversation on the role of service operations in value creation.

Originality/value

Leveraging the collective knowledge of the JOSM Service Operations Expert Research Panel to expand on the research themes generated from the Delphi study, novel questions for future study are put forward. Recognizing that the number of potential research questions is virtually unlimited, summary questions by theme and topic are also provided. These questions represent a synopsis of the individual questions and can serve as a quick reference guide for researchers interested in pursuing new directions in conceptual and empirical research in service operations. This summary also serves as a framework to facilitate the formulation of additional research topics and questions.

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Article
Publication date: 3 April 2017

Rui Sousa and Giovani J.C. da Silveira

The purpose of this paper is to theoretically articulate and empirically test an integrated model of capability antecedents and performance outcomes of servitization…

Abstract

Purpose

The purpose of this paper is to theoretically articulate and empirically test an integrated model of capability antecedents and performance outcomes of servitization strategies. The authors characterize servitization strategies based on the offering of two types of services: basic services (BAS) and advanced services (ADS).

Design/methodology/approach

Hypotheses are tested based on statistical analyses of a large survey of manufacturers from different countries and sectors.

Findings

The authors find that manufacturing capabilities associate with the provision of BAS, while service capabilities associate with both BAS and ADS; BAS do not impact financial performance, but support the offering of ADS; there seem to be naturally occurring servitization trajectories involving the gradual development of balanced levels of BAS and ADS and adequate levels of manufacturing and service capabilities.

Research limitations/implications

The findings on servitization trajectories are based on the observation of manufacturing business units at different stages of servitization (cross-sectional data).

Practical implications

Manufacturers wishing to servitize should distinguish between BAS and ADS and deploy a balanced adoption of BAS and ADS, using BAS as a platform. This should be accompanied with the building of appropriate capabilities.

Originality/value

This is one of the first studies to show an explicit link between different servitization strategies, capabilities, and servitization maturity. It provides new insights into the servitization paradox and servitization trajectories.

Details

International Journal of Operations & Production Management, vol. 37 no. 4
Type: Research Article
ISSN: 0144-3577

Keywords

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Article
Publication date: 14 August 2018

Vitalija Petrulaitiene, Pia Korba, Suvi Nenonen, Tuuli Jylhä and Seppo Junnila

New ways of working challenge workplace management: increasing mobility and diminishing organizational boundaries require re-evaluation of both workplace design and…

Abstract

Purpose

New ways of working challenge workplace management: increasing mobility and diminishing organizational boundaries require re-evaluation of both workplace design and service delivery. However, structures and processes of workplace management are still traditional, and managers, together with outsourced facility service providers, often do not succeed at fulfilling the needs of mobile employees. The aforementioned changes stimulate discussions in many areas in both industry and academy. Nevertheless, workplace literature from business perspective seems to be scarce. In this paper, the focus is on workplace service offering for mobile knowledge workers. This paper aims to study the current state of workplace servitization. To answer this, the authors identify value offering elements that are used in office business market to deliver workplace as a service.

Design/methodology/approach

This study follows multiple case study methodology including five case studies. Primary data were collected through interviews with workplace service providers. Secondary data included observations and publicly available data. The authors took business model design approach to study selected business offerings.

Findings

The results indicate that workplace business models include elements of servitization on various levels. Physical space is no longer the central offering in the office business; instead, it acts as a component on which the service portfolio is built. The highest value from workplace comes from experience-related service offerings.

Originality/value

Academically, research contributes to the workplace management studies by providing servitization perspective to a topic previously approached with a more technical and psychological point of view. This study can also support service providers and customer organizations in their quest to make service provision more flexible and experience-oriented.

Details

Facilities, vol. 36 no. 9/10
Type: Research Article
ISSN: 0263-2772

Keywords

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Article
Publication date: 28 January 2014

Daniel Kindström and Christian Kowalkowski

This article aims to investigate the nature and characteristics of business model elements required for successful service innovation. The authors examine which unique…

Abstract

Purpose

This article aims to investigate the nature and characteristics of business model elements required for successful service innovation. The authors examine which unique resources and capabilities product-centric firms should develop and deploy to pursue service innovation.

Design/methodology/approach

Data collected from several research projects support iterations across empirical data and theory, in an abductive process. Empirical data come from product-centric firms; interviews and focus groups were the main data collection methods.

Findings

Specific resources and capabilities are needed for the proposed business model elements, as defined by the overarching strategy and structure. Firms can approach the process of service innovation from different starting points and sequences, depending on the context.

Research limitations/implications

Because it takes a synthesizing approach, this research lacks some detail. By taking a business model approach with a holistic perspective, it forgoes detailed descriptions to provide greater breadth.

Practical implications

Managers can use business models as tools to visualize changes, which should increase internal transparency, understanding, and awareness of service opportunities and necessary changes. Dependencies exist among elements; a change in one element likely affects the others. This study provides insights into which efforts are necessary and offers managers a guiding framework.

Originality/value

By providing a multidimensional perspective on service innovation, this study merges various previous research into a synthesized discussion. Combining a resources and capabilities perspective with a business model framework also leads to new insights regarding service innovation and associated activities.

Details

Journal of Business & Industrial Marketing, vol. 29 no. 2
Type: Research Article
ISSN: 0885-8624

Keywords

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Article
Publication date: 21 August 2017

Anna Salonen, Onur Saglam and Fredrik Hacklin

The purpose of this paper is to explain why product-centric manufacturers utilize advanced services not as vehicles of transformation, but of reinforcement, to strengthen…

Abstract

Purpose

The purpose of this paper is to explain why product-centric manufacturers utilize advanced services not as vehicles of transformation, but of reinforcement, to strengthen their established business model logic based on selling products and basic product-related services.

Design/methodology/approach

The empirical basis of this study relies on an in-depth case study of a globally operating manufacturer of industrial pumps and related services. The data includes 31 interviews conducted over several years of in-depth collaboration with the studied firm.

Findings

Product-centric manufacturers utilize advanced services as engagement platforms to facilitate the external and internal engagement of the actors and the resources controlled by them. Externally, advanced services facilitate access to customer decision makers and insights into their latent needs. Internally, advanced services help the manufacturer to more effectively leverage resources that reside within its different organizational units. Ultimately, in leveraging advanced services as engagement platforms, the manufacturer seeks to boost activities with the greatest immediate impact on its market performance: the sale of products and basic product-related services.

Practical implications

The study explains why managers should invest into development of advanced services even if such services contribute only marginally to the manufacturer’s direct revenues and profits.

Originality/value

This study contributes to development of an alternative explanation of servitization that departs from the current paradigmatic assumptions in the field.

Details

Journal of Service Management, vol. 28 no. 4
Type: Research Article
ISSN: 1757-5818

Keywords

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Article
Publication date: 24 April 2009

Tim Baines, Howard Lightfoot, Joe Peppard, Mark Johnson, Ashutosh Tiwari, Essam Shehab and Morgan Swink

This paper aims to present a framework that will help manufacturing firms to configure their internal production and support operations to enable effective and efficient…

Abstract

Purpose

This paper aims to present a framework that will help manufacturing firms to configure their internal production and support operations to enable effective and efficient delivery of products and their closely associated services.

Design/methodology/approach

First, the key definitions and literature sources directly associated with servitization of manufacturing are established. Then, a theoretical framework that categorises the key characteristics of a manufacturer's operations strategy is developed and this is populated using both evidence from the extant literature and empirical data.

Findings

The framework captures a set of operations principles, structures and processes that can guide a manufacturer in the delivery of product‐centric servitized offering. These are illustrated and contrasted against operations that deliver purely product (production operations) and those which deliver purely services (services operations).

Research limitations/implications

The work is based on a review of the literature supported by data collected from an exploratory case study. Whilst it provides an essential platform, further research will be needed to validate the framework.

Originality/value

The principal contribution of this paper is a framework that captures the key characteristics of operations for product‐centric servitized manufacture.

Details

International Journal of Operations & Production Management, vol. 29 no. 5
Type: Research Article
ISSN: 0144-3577

Keywords

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Article
Publication date: 25 March 2020

Abu Saim Md. Shahabuddin, Mohd Edil Abd Sukor and Noor Hazarina Hashim

The purpose of this paper is to explain the importance of the understanding of the halal business from an Islamic perspective. Business use of the Quranic and fiqhi word…

Abstract

Purpose

The purpose of this paper is to explain the importance of the understanding of the halal business from an Islamic perspective. Business use of the Quranic and fiqhi word halal is now conspicuous because of the penetration of halal product ideas not only into the food products but also into the pharmaceutical, cosmetic, leisure and entertainment industries.

Design/methodology/approach

This paper evaluates the Islamic authenticity of the prevailing halal business initiatives. Toward this evaluation, explains the frame of reference and shows the Islamic ethical excellence of business enterprises. This framework is based on the Quranic injunctions and instructions regarding usury (riba), intoxicants (khamr), trade with mutual consent (taradim minkum) and trading during Friday prayer (Jumuah), which have direct or indirect implications for the management of business enterprises. Then, it describes and evaluates two cases, namely, halal chicken and Sharīʿah-compliant hotel. Materials for these cases are obtained through an internet blog and literature review.

Findings

The evaluation reveals that these halal business cases are overwhelmingly product-centric and they violate or neglect people’s rights. On the scale of ethics and social responsibility, while they largely maintain legal responsibility, moral and spiritual responsibilities hardly draw their attention. Hence, a need for a fundamental reorientation of halal business thought is suggested in the conclusion.

Practical implications

The findings may serve as a useful input for halal business owners in improving their practices to confirm with all moral and spiritual standards of Islamic business conduct, and not the only product. These standards have significant implications for equitable growth in a society and a blissful eternal life.

Originality/value

The topic of product-centric halal business has not been fully explored and understood by its stakeholders. This paper aims to give insights to an overwhelming trend toward equating halal products with the whole of the halal business.

Details

Journal of Islamic Marketing, vol. 11 no. 6
Type: Research Article
ISSN: 1759-0833

Keywords

Content available
Article
Publication date: 27 February 2020

Federico Adrodegari and Nicola Saccani

The purpose of this paper is to contribute to the understanding of the servitization phenomenon of product-centric companies, by identifying the resources, capabilities…

Abstract

Purpose

The purpose of this paper is to contribute to the understanding of the servitization phenomenon of product-centric companies, by identifying the resources, capabilities and organizational aspects needed to successfully deploy a servitized business model (BM).

Design/methodology/approach

By adopting a literature-based approach, this paper develops a servitization maturity model (SeMM) aimed at assessing and positioning companies in the servitization journey. The paper also illustrates the model application to two small and medium-sized enterprises (SMEs), a machinery and a forklift truck company.

Findings

The SeMM identifies a set of 85 critical requirements that are used to evaluate the servitization level of product-centric companies, through a specific five-stage measurement scale. The requirements are categorized into: five maturity dimensions (organizational approach, process management, performance management, tools, capabilities) and nine BM Canvas components. The empirical application exemplifies how the SeMM can support managers in identifying and bridging the gaps in their servitization journey.

Originality/value

The SeMM adopts an original bi-dimensional approach and provides an operationalization of the servitization process through the identification of specific critical requirements framed on established BM and maturity dimensions taken from the literature. Moreover, the model responds to a call for research to develop practitioner-oriented tools and guidelines to support the servitization process, in particular for SMEs, and to the need to go beyond to measures of servitization based on indicators about number of services offered or their turnover.

Details

Journal of Manufacturing Technology Management, vol. 31 no. 4
Type: Research Article
ISSN: 1741-038X

Keywords

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Article
Publication date: 9 August 2011

Chris Raddats and Jamie Burton

The purpose of this paper is to investigate how product‐centric businesses (PCBs), operating in a business‐to‐business environment, configure their organizations to align…

Abstract

Purpose

The purpose of this paper is to investigate how product‐centric businesses (PCBs), operating in a business‐to‐business environment, configure their organizations to align services strategy with structure. PCBs are companies whose businesses were historically based on the products, rather than services, they sold.

Design/methodology/approach

A UK‐based study was undertaken which comprised 40 interviews with managers in 25 PCBs from 11 sectors.

Findings

The main parameter which determines the appropriate organizational configuration for services within the PCB's structure is strategy. A new framework is developed from the empirical research which identifies a number of PCB configurations, based on PCBs' services strategies (services engagement, extension, penetration and transformation) and organizational structures aligned to strategic business units (SBUs), i.e. combined product and services, independent services and customer‐focused. The framework is used to show how organizational structure changes in response to changes in strategy. For certain strategies, the degree of product differentiation (services engagement) and future product sales potential (services transformation) also plays a part in determining strategy/structure configurations.

Research limitations/implications

Future research could confirm and compare the effectiveness of the identified structural configurations.

Practical implications

Managers in PCBs can identify appropriate organizational structures based on their services strategies and products. They can configure organizational design in light of evolving strategies that enable services‐led growth.

Originality/value

The paper presents a large pan‐sector study of organizational design for services as it related to PCBs, providing a new framework through which appropriate strategy/structure configurations can be identified and investigated as services‐led growth takes place.

Details

Journal of Service Management, vol. 22 no. 4
Type: Research Article
ISSN: 1757-5818

Keywords

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