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1 – 10 of over 132000Alexander Hahn and Michèle Morner
The purpose of this paper is to examine the strategic and organizational difficulties of multidivisional corporations with solution business (product service bundles). Most large…
Abstract
Purpose
The purpose of this paper is to examine the strategic and organizational difficulties of multidivisional corporations with solution business (product service bundles). Most large multidivisional corporations are organized in a way that supports independence and market orientation of their organizational units. Solutions, however, require a high level of interaction and cooperation between corporate units. The authors collect evidence for this contradiction and resulting difficulties and propose a shift in the value creation strategy towards corporate headquarters having a stronger steering influence.
Design/methodology/approach
The authors analyze the economic performance of the largest semiconductor suppliers and relate these results to their product and solution focus. They then derive initial strategic recommendations based on the findings and organizational strategy literature.
Findings
Multidivisional companies that just add solution business onto their existing product‐based strategy experience difficulties. To overcome these, strategic adjustments are proposed that will lead to a stronger steering influence by corporate headquarters.
Practical implications
This paper shows the necessity of adjustments to corporate strategy when solution business is pursued. Companies need to actively support the interaction of their corporate units in the light of solution business.
Originality/value
It is recognized that solely solution‐focused companies require a different business model to product‐focused companies. However there has been little discussion on strategic adjustments by companies that supplement their existing product business with solutions.
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Risto Tapio Salminen, Minna Oinonen and Juha Haimala
The purpose of this paper is to gain knowledge on the character of managerial implications within business-to-business (B2B) marketing, in terms of type of relevance addressed in…
Abstract
Purpose
The purpose of this paper is to gain knowledge on the character of managerial implications within business-to-business (B2B) marketing, in terms of type of relevance addressed in research articles on solution business and integrated solutions.
Design/methodology/approach
Use of Jaworski’s framework on role-relevance to classify the type of relevance addressed in 29 journal articles. A systematic literature review on solution business preceded the selection of articles and a concern to include different journal categories.
Findings
Managerial implications in the studied articles within solution business do not seem to emphasize role-relevance particularly; they rather address applicability of findings on a company level and for B2B marketing in a more general sense. The majority of implications for practice are framed to have an impact on “present actions”. Managerial knowledge needs are dominantly addressed by “empirical findings” or “frameworks”. The dominating managerial core tasks addressed are “transformer of marketing” and “marketing strategy”.
Research limitations/implications
There do not seem to be studies with managerial implications addressing future actions and thinking; providing instruments, methods or models that are role- relevant; focusing on the challenges of a “coordinator”, “strategist” or “performance controller”. The focus on solution business limits the generalizability of findings.
Practical implications
Results suggest that implications for practice potentially would benefit from being written in the form of explicit recommendations; targeted to a particular managerial role; and increasingly developed when it comes to proposed frameworks for them to be useful for managers in industrial marketing.
Originality/value
This is one of the first studies to systematically examine the character of managerial implications by categorizing results in accordance with a framework specifically addressing role-relevance.
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Michael Kleinaltenkamp, Suvi Nenonen, Sascha Raithel and Kaj Storbacka
Firms transforming from a product supplier into a solution provider need to develop entirely new organizational capabilities or re-configure existing ones. This paper aims to…
Abstract
Purpose
Firms transforming from a product supplier into a solution provider need to develop entirely new organizational capabilities or re-configure existing ones. This paper aims to conceptualize solution business fitness (SBF) as a construct that captures comprehensively the capabilities necessary for a firm to operate successfully in solution business and investigates how the construct can be measured.
Design/methodology/approach
Based on a conceptualization of solution-specific capabilities and SBF, the development of the SBF measurement model followed a three-step procedure: domain specification and conceptual development, qualitative pre-study and quantitative pre-study. The SBF measurement model and its relevance were studied in a large scale longitudinal study using survey data from firm representatives, as well as archival data about the turnover and profitability development of the respective solution providers.
Findings
The study empirically validates solution-business-specific capabilities as antecedents of firm performance and shows how different business logics applied by firms give capabilities different importance and impact.
Practical implications
Managerially, firms can use the developed measurement tool to assess their current SBF and define the desired target status. When improving the SBF, managers should pay special attention to the business logic of their firm, as the required capabilities are context-dependent.
Originality/value
The study is the first to conceptualize and measure SBF and to empirically investigate the moderating role of business logic on the importance of the concept and its elements.
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Fabiana Nogueira Holanda Ferreira, Bernard Cova, Robert Spencer and João F. Proença
The evolution of the business-to-business (BtoB) realm toward solution business calls for a better understanding of how relationships develop over time in such a renewed context…
Abstract
Purpose
The evolution of the business-to-business (BtoB) realm toward solution business calls for a better understanding of how relationships develop over time in such a renewed context. This paper aims to propose a phase model for solution relationship development, considering triadic relationships in complex engineering solutions.
Design/methodology/approach
To depict how relationships develop in solution business, the authors adopt a qualitative approach which allows to detail the episodes of interactions between the actors. A case study approach in an extreme sector – the aerospace industry – allows highlighting certain key traits. Extending conventional dyadic analysis, this empirical study focuses on the aerospace industry, using a case study approach to analyze relationship developments between a worldwide leading aircraft manufacturer, one of its customer and four providers of products and services. The authors adopt a triadic perspective in the selection of cases, considering a total of four manufacturer-provider-customer triads.
Findings
Four dynamic phases which track solution provision dynamics and involving dyadic and triadic relationship evolution are identified: matching; combining; mixing; and sharing. Each phase calls, from a management perspective, for specific competencies and resources of the actors in interaction.
Originality/value
This paper contributes to the gap about solution relationship development in a changing BtoB landscape. Considering the lens of a triadic approach, the paper also helps to fill the as-yet unattended to gap between dyads and triads in the literature.
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Erik Mooi, Vishal Kashyap and Marc van Aken
This paper aims to consider the impact of contractual and normative governance mechanisms on recommendation intent in a context of healthcare and professional lighting where…
Abstract
Purpose
This paper aims to consider the impact of contractual and normative governance mechanisms on recommendation intent in a context of healthcare and professional lighting where repeat business from a customer is absent. The authors suggest both contractual and normative governance can create recommendation intent, but only when sufficient customer value is created.
Design/methodology/approach
The authors draw on a combination of survey and archival data from the supplier and customer in the medical equipment and advanced (business) lighting systems industries. The authors analyze the data using seemingly unrelated regression and mediation tests.
Findings
Contracts and relational norms can increase customer recommendation intent, but only when the supplier creates customer value.
Practical implications
The paper’s findings suggest that customers of business solutions are more likely to recommend their supplier when contracts are relatively detailed and when buyers and suppliers attempt to craft strong relational norms, despite service solutions being delivered during a relatively short time span.
Originality/value
The extant research on business solutions has focused on extended relationships between exchange partners with a high likelihood of repeated transactions. The authors demonstrate how to govern relationships in a solutions context where the likelihood of repeat business from the same customer is low using contractual and normative governance.
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Yihua Chen, Ivanka Visnjic, Vinit Parida and Zhengang Zhang
The authors seek to understand the process of digital servitization as a shift of manufacturing companies from the provision of standard products and services to smart solutions…
Abstract
Purpose
The authors seek to understand the process of digital servitization as a shift of manufacturing companies from the provision of standard products and services to smart solutions. Specifically, the authors focus on changes in the business model (i.e. the value proposition, the value delivery system and the value capture mechanism) for digital servitization.
Design/methodology/approach
The authors examine a Chinese air conditioner manufacturer, Gree, who became the global leader with their smart solutions. These solutions included performance-based contracts underpinned by artificial intelligence (AI)-powered air conditioners that automatically adjust to environmental changes and are capable of remote monitoring and servicing thanks to its Internet of things (IoT) technology.
Findings
To successfully offer smart solution value propositions, a manufacturer needs an ecosystem value delivery system composed of suppliers, distributors, partners and customers. Once the ecosystem relationships are well aligned, the manufacturer gains value with multiple value capture mechanisms (i.e. efficiency, accountability, shared customer value and novelty). To arrive at this point, a manufacturer has to pass through different stages that are characterized by both discontinuous and continuous interplay between business models and digital technologies. At the beginning of each stage, new value propositions and value delivery systems are first discontinuously created and then enabled with digital technology. As a result, new value capture mechanisms are activated. Meanwhile, the elements of the existing business model are continuously improved.
Research limitations/implications
By combining process-perspective and business-model lenses, the authors offer nuanced insights into how digital servitization unfolds.
Practical implications
Executives can obtain insights into the business model elements, they need to change over the course of digital servitization and how to manage the process.
Originality/value
A longitudinal case study of a traditional manufacturer that has achieved stellar success through digital servitization business models development.
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This paper aims to provide a better understanding of the innovation challenges firms face when developing and commercialising solutions in the capital goods sector; challenges…
Abstract
Purpose
This paper aims to provide a better understanding of the innovation challenges firms face when developing and commercialising solutions in the capital goods sector; challenges related to the interdependencies between the supplier/innovator and the customers, as well as the solution’s impact on their competencies and activities.
Design/methodology/approach
This paper draws upon the emerging body of literature on solutions and established frameworks within innovation management literature. It explores a real-time longitudinal case study of “Alpha” (an international specialist in centrifugal separation, heat exchange and fluid handling), including an R&D project, the project’s transformation into an internal corporate venture and the years of the venture up until its integration into the corporate.
Findings
This paper characterises solutions as involving product and business innovation. By clarifying the differences between how the solution affects the customers and the suppliers, the use of the proposed framework develops a deeper understanding of the obstacles and difficulties involved in solution innovation.
Research limitations/implications
Although some customers were interviewed in this study, a more in-depth study of the customers and the actors within the business network would provide further insight into solution innovations. Merging the two discussions on co-creation and role of users in innovation could provide an avenue for fruitful research within this area.
Practical implications
This paper provides a framework for deconstructing solution innovation, enabling detailed comparison between the innovation’s impact on both suppliers’ and customer’s competencies. Such a tool is helpful for increased understanding of how to facilitate internal and external acceptance for a disruptive and radical business innovation.
Originality/value
This paper links the development and commercialisation of solutions with established innovation frameworks. Understanding solutions as technology-driven business innovations provides a multifaceted and complex perspective on solutions and contributes to better understanding of radical business innovations.
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The following is an introductory profile of the fastest growing firms over the three-year period of the study listed by corporate reputation ranking order. The business activities…
Abstract
The following is an introductory profile of the fastest growing firms over the three-year period of the study listed by corporate reputation ranking order. The business activities in which the firms are engaged are outlined to provide background information for the reader.
Björn Axelsson and Mats Vilgon
The topics of this chapter are quite fundamental for the book. The chapter deals with value in B2B; what is value, what creates value, how could value be identified, estimated…
Abstract
The topics of this chapter are quite fundamental for the book. The chapter deals with value in B2B; what is value, what creates value, how could value be identified, estimated, and exploited. For these reasons, the chapter presents a value calculation model and carries out a critical discussion of the meaningfulness of doing such calculations.
A second theme is a discussion about solution sales relative to product sales and also systems selling. We also provide a comparison between business ventures focusing on selling goods, a goods-dominant logic, relative to services, a service-dominant logic. This comparison is made with reference to the two underlying themes of the book, the solution-oriented business and the continuously ongoing organizing activities.
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Risto Rajala, Saara A. Brax, Ari Virtanen and Anna Salonen
The purpose of this paper is to identify integrated solutions business as the first generation of servitized offerings and modular solution offerings as the second development…
Abstract
Purpose
The purpose of this paper is to identify integrated solutions business as the first generation of servitized offerings and modular solution offerings as the second development phase in servitization of original equipment manufacturers. This study examines how the servitized manufacturer, Kone, moves from integrated solutions to modular solutions business and develops the requisite capabilities to design, produce and implement modular solution offerings.
Design/methodology/approach
The paper reports a longitudinal case study of a provider of integrated solutions installed in buildings. During the ten years studied, the manufacturer implemented a strategic initiative to modularize its integrated solutions offering.
Findings
The firm’s transition to modular solutions progressed through three major capability development phases: solutions based on ad hoc integration, smart solutions based on modular design and through-chain modularity. The modular structure aims at fostering the efficiency of the solution offering and the associated production system.
Research limitations/implications
Leveraging the benefits of modularity calls for an aligned combination of strategic, operational and technical capabilities contributing to the integration of resources in a modular production system for the solution providers’ competitive performance.
Practical implications
The study reports how a solution provider can develop the operational capabilities to integrate the core and peripheral components into the solution, and orchestrate the modular production system.
Originality/value
This study is a rare longitudinal analysis of how a manufacturer builds a modular offering, the solution platform and the required competitive capabilities to provide the solution.
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