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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

1638

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

Article
Publication date: 1 January 1993

Dale A. Lunsford and Bradley C. Fussell

Identifies several unique challenges facing Western firms inmarketing business services in the economies of Hungary, the formerCzechoslovakia, Poland, the former East…

Abstract

Identifies several unique challenges facing Western firms in marketing business services in the economies of Hungary, the former Czechoslovakia, Poland, the former East Germany and Russia. Derives several managerial recommendations to meet these challenges. Identifies experts on these economies and employs a modified Delphi technique to identify expert recommendations for constructing a business services marketing strategy targeted to Central Europe.

Details

Journal of Services Marketing, vol. 7 no. 1
Type: Research Article
ISSN: 0887-6045

Keywords

Article
Publication date: 26 June 2009

Pauline Ratnasingam

The purpose of this paper is to examine the role of the balanced scorecard methodology in web services quality. A balanced scorecard framework is developed for web services

2265

Abstract

Purpose

The purpose of this paper is to examine the role of the balanced scorecard methodology in web services quality. A balanced scorecard framework is developed for web services quality by identifying critical success factors that make up the business objectives, measures, targets, and initiatives.

Design/methodology/approach

The framework of web services quality applying the balanced scorecard methodology is developed by integrating the theory of balanced scorecard and web services. Then, case studies with two organizations in the agricultural industry are deployed to test the framework of the balanced scorecard.

Findings

The findings of the exploratory case studies suggest a cyclic process that was created with the use of the balanced scorecard approach to evaluate the quality of web services applications and in order to integrate quality and to provide a strategic map and indicate how information will be disseminated so that the potential use of web services can be attained.

Practical implications

The study contributes to practitioners as they will have a system which will provide them with timely, cost‐effective, scalable, manageable, and reliable feedback on their strategic performance. Further, the balanced scorecard gives a holistic view of the firms by simultaneously examining its performance from four perspectives; namely learning and growth, internal business processes, customer, and financial perspectives.

Originality/value

Unlike previous research that uses the balanced scorecard to measure the economic impact on the firm. This paper discusses the role of the balanced scorecard methodology in improving the service quality of firms using web services. Further, it provides lessons learned, as in measures that firms can be aware of in the quality of the services they provide.

Details

International Journal of Commerce and Management, vol. 19 no. 2
Type: Research Article
ISSN: 1056-9219

Keywords

Book part
Publication date: 16 August 2014

Anne-Maria Holma

This study provides a comprehensive framework of adaptation in triadic business relationship settings in the service sector. The framework is based on the industrial…

Abstract

This study provides a comprehensive framework of adaptation in triadic business relationship settings in the service sector. The framework is based on the industrial network approach (see, e.g., Axelsson & Easton, 1992; Håkansson & Snehota, 1995a). The study describes how adaptations initiate, how they progress, and what the outcomes of these adaptations are. Furthermore, the framework takes into account how adaptations spread in triadic relationship settings. The empirical context is corporate travel management, which is a chain of activities where an industrial enterprise, and its preferred travel agency and service supplier partners combine their resources. The scientific philosophy, on which the knowledge creation is based, is realist ontology. Epistemologically, the study relies on constructionist processes and interpretation. Case studies with in-depth interviews are the main source of data.

Details

Deep Knowledge of B2B Relationships within and Across Borders
Type: Book
ISBN: 978-1-78190-858-7

Keywords

Book part
Publication date: 13 August 2014

Paul C. van Fenema, Bianca Keers and Henk Zijm

Sharing services increasingly extends beyond intraorganizational concentration of service delivery. Organizations have started to promote cooperation across their…

Abstract

Purpose

Sharing services increasingly extends beyond intraorganizational concentration of service delivery. Organizations have started to promote cooperation across their boundaries to deal with strategic tensions in their value ecosystem, moving beyond traditional outsourcing. This chapter addresses two research questions geared to the challenge of interorganizational shared services (ISS): why would organizations want to get and remain involved in ISS? And: what are the implications of ISS for (inter)organizational value creation?

Design/methodology/approach

The conceptual chapter reviews literature pertaining to ISS from public, commercial, and nongovernmental sectors. ISS is understood as a multistakeholder organizational innovation. In order to analyze ISS and conduct empirical research, we developed a taxonomy and research framework.

Findings

The chapter shows how ISS can be positioned in value chains, distinguishing vertical, horizontal, and hybrid ISS. It outlines ISS implications for developing business models, structures, and relationships. Success factors and barriers are presented that epitomize the dynamic interplay of organizational autonomy and interorganizational dependence.

Research limitations/implications

The research framework offers conceptual ideas for theoretical and empirical work. Researchers involved in ISS studies may adopt strategic, strategic innovation, and organizational innovation perspectives.

Practical implications

ISS phases are distinguished to focus innovation management — initiation, enactment, and evaluation. Furthermore, insights are provided into processes and interventions aimed at making ISS a success for participating organizations.

Originality/value

Cross-sectoral perspective on ISS; taxonomy of ISS; research framework built on organization and strategic management literature.

Abstract

Details

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

Book part
Publication date: 21 May 2010

Tim Kessler and Michael Stephan

As an answer for the limited growth potentials of diversification and internationalization, services became increasingly important for industrial firms in recent years…

Abstract

As an answer for the limited growth potentials of diversification and internationalization, services became increasingly important for industrial firms in recent years. Based on existing and established business concepts, companies explore new segments in their traditional value chains beyond traditional market penetration strategies: they pursue service transition strategies to open up new sources for growth, even in markets that do not promise great expansion potential. Our paper addresses the issue of economies of scope of service transition. In this context, we first explore the question, to what extent the insights about product diversification strategies from physical goods sectors can be transferred to the service sector. Using competence-based considerations on diversification we focus on dynamic economies of scope, whose central idea is exploration and development of new resources rather than the static exploitation of existing ones. Furthermore, we integrate the largely neglected issue of how the phenomenon of service diversification depends on the industry's life cycle stage. In a small empirical study of the German mechanical engineering industry we demonstrate that diversification steps into services require a shift in the resource and competence base of firms. Using a dynamic perspective, we construct a conceptual framework for analyzing and explaining the advantages of service transition strategies. The developed model describes a service diversification trajectory and points out that the establishment of a profitable service business requires the exploration and development of competences and adequate organizational structures.

Details

Enhancing Competences for Competitive Advantage
Type: Book
ISBN: 978-1-84855-877-9

Book part
Publication date: 10 December 2018

Bart Kamp

This study explores whether machinery firms with a ‘hidden champions’ profile leverage Industry 4.0 practices to roll out smart services; whether this allows them to get a…

Abstract

This study explores whether machinery firms with a ‘hidden champions’ profile leverage Industry 4.0 practices to roll out smart services; whether this allows them to get a firm grip on their installed base; and whether it allows them to expand their international (service) business. The research is conducted based on exploratory, multiple-case study methods.

The author finds that the implementation of smart services can improve a machine tool builder’s hold on its installed base and expand the scope of its international (service) business. However, the study also finds that the ability to capitalise on this potential depends on a series of moderating variables. The study also concludes that there is a risk that smart services do not unlock a strong willingness-to-pay among potential customers.

It, therefore, calls into question several conventional wisdoms, such as the possibilities that Industry 4.0 offers for suppliers operating in business-to-business markets, and the receptiveness to smart services by buyers in such markets. Finally, it highlights the specific liabilities faced by hidden champions with regard to expanding their smart services business.

The chapter provides practical insights into the hurdles that industrial suppliers must overcome in their attempts to achieve uptake of smart services by customers, particularly within a cross-border context.

Details

International Business in the Information and Digital Age
Type: Book
ISBN: 978-1-78756-326-1

Keywords

Abstract

Details

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

Article
Publication date: 19 June 2017

Andreas Eggert, Eva Böhm and Christina Cramer

Many manufacturing firms entrust partners to provide services on their behalf. However, it is not clear whether and when firms can capture the potential value advantages…

2006

Abstract

Purpose

Many manufacturing firms entrust partners to provide services on their behalf. However, it is not clear whether and when firms can capture the potential value advantages of outsourcing business services. The purpose of this paper is to investigate the effects of different types of business service outsourcing on firm value.

Design/methodology/approach

The paper uses event study methodology to estimate the impact of business service outsourcing announcements on abnormal returns of publicly traded manufacturing companies in Europe.

Findings

External service outsourcing that directly affects the company’s customers leads to more favorable outcomes than internal service outsourcing. This effect is contingent on the strategic outsourcing intention, the service’s reliance on technology, and the choice of the outsourcing partner.

Research limitations/implications

Findings show that firm value depends critically on the service value it delivers to customers. Future research could explore further contingency variables, and investigate the role of service outsourcing networks and relationships.

Practical implications

The insights of this study help managers to decide why, how, and to whom they should outsource their business services, as well as how to justify their outsourcing decisions, and how to communicate them toward the financial markets.

Originality/value

This research sheds light on the value implications of outsourcing decisions. Two types of business service outsourcing are distinguished, namely, internal and external. Furthermore, the study enhances our understanding of a contingency perspective on service outsourcing decisions.

Details

Journal of Service Management, vol. 28 no. 3
Type: Research Article
ISSN: 1757-5818

Keywords

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