skip to primary navigationskip to content

Cambridge Service Alliance

developing new understanding and approaches to complex service systems

Studying at Cambridge

 

Industry Conditions and Product Firms’ Choice to Offer Services

last modified Oct 22, 2015 12:32 PM
The October 2015 paper on 'How Do Industry Evolution and Industry Conditions Prompt Product Firms to Offer Services?' by Ivanka Visnjic, Sam Arts & Dimo Ringov.
Industry Conditions and Product Firms’ Choice to Offer Services

October 2015 Paper

[Download Paper]

Product companies are increasingly offering different types of services. Companies choose this strategy, often called servitization, when they face several challenges in their ‘native’ product industry. We study under which industry conditions product companies offer services and why. Moreover, we distinguishing between services that are performed on products (product-oriented services) and services that go beyond the products to provide more broadly based support for customer needs (customer-oriented services). Statistical tests performed on the sample of 410 public companies from 1990 to 2011 demonstrate that companies are more likely to offer product-oriented services in the early stage of the industry life cycle and/or when their industries are highly R&D intense and competitive. Conversely, product companies tend to offer customer-oriented services in the mature stage of the industry life cycle and/or in highly cyclical industries. We argue that companies are more likely to opt for product-oriented, as opposed to customer-oriented services in young, R&D intense and competitive industries because they focus on deepening the product knowledge through offering those services. For example, offering maintenance and monitoring helps learn about the product functioning and use, enabling companies to improve their product and become more competitive in an attractive product industry. On the other hand, we believe that product companies are more likely to offer customer-oriented services, as opposed to product-oriented services, in mature and turbulent industries because they intend to broaden their knowledge base beyond products and discover other market opportunities that are unrelated to their increasingly unattractive product industry. For example, offering consulting services helps understand better customers’ business model and other unsatisfied needs they may have.

RSS Feed Latest news

Business Ecosystems: Towards a Classification Model

Apr 20, 2017

April 2017 Paper on 'Business Ecosystems: Towards a Classification Model' by Florian Urmetzer, Andy Neely and Veronica Martinez

Webinar - Investigating risks of outcome-based service contracts from a provider's perspective

Apr 10, 2017

Webinar by Dr Jingchen Hou, on 10 April 2017 'Investigating risks of outcome-based service contracts from a provider’s perspective'

Exploring the Journey to Services - Podcast Interview

Mar 27, 2017

In a new podcast from the Cambridge Service Alliance, Senior Researcher Veronica Martinez, talks about her new jointly authored paper: ‘Exploring the Journey to Services’. It is co-authored with Professor Andy Neely, Chander Velu, Stewart Leinster-Evans and Dav Bisessar.

Service Excellent Programme Delivered to Veolia

Mar 22, 2017

A Two-Day Service Excellence Programme has been developed and delivered to Veolia by the Cambridge Service Alliance.

Exploring the Journey to Services

Mar 20, 2017

March paper on 'Exploring the Journey to Services', by Veronica Martinez, Andy Neely, Chander Velu, Stewart Leinster-Evans and Dav Bisessar.

View all news

Upcoming events

Cambridge Service Week 2017 - Academic Conference

Oct 05, 2017

IfM, Cambridge, UK

Cambridge Service Week 2017 - Industry Conference

Oct 10, 2017

Moller Centre, Cambridge, UK

Cambridge Service Week 2017 - Partners Day

Oct 11, 2017

Moller Centre, Cambridge, UK

Upcoming events