skip to primary navigationskip to content
 

Another Performance Paradox? A refined view on the performance impact of servitization

last modified Mar 27, 2015 01:52 PM
The May 2012 paper on 'Another performance paradox? A refined view on the performance impact of servitization' by Ivanka Visnjic, Andy Neely and Frank Wiengarten
Another Performance Paradox? A refined view on the performance impact of servitization

May 2012 Paper

 

Case evidence and quantitative studies warn of the mixed impact of services on the financial performance for manufacturing firms. In this study we disentangle different aspects of servitization strategies and their impact on the financial performance of manufacturing firms. Results suggest that service investments represent a prerequisite for growth. When it comes to characteristics of service offering, we identify the negative effect of increasing service “breadth”, measured in number of services offered, while increasing service “depth”, measured in completeness / sophistication of service offering, results in higher profit margins and an increase in market value. Besides the implications for the service business per se, we find that the finetuning of the service portfolio has the effect on the product strategy as well. More specifically, we find that the interplay between service depth (sophisticated services) and investments in product innovation, measured in R&D, is positive only to certain extent; highest levels of service sophistication and focus coupled with high level of product innovation may result in the negative impact on performance as manufacturers spread themselves too thin to achieve excellence on both ends.

[paper]

RSS Feed Latest news

'Using AI to Track How Customers Feel — In Real Time' published in the Harvard Business Review

May 13, 2021

The paper 'Using AI to Track How Customers Feel — In Real Time' by Mohamed Zaki, Janet R. McColl-Kennedy and Andy Neely has been published in Harvard Business Review.

Industry Day 2020 | What we learnt

Dec 06, 2020

What is the future of services in the new pandemic-driven era? This was the topic explored at our 2020 Industry Day by senior executives from L'Oréal, Microsoft Research, Manchester United and start-up, Fairjungle.

Understanding business models in the construction sector

Nov 25, 2020

What’s standing in the way of offsite manufacturing? For decades, the construction sector has been hailing it as the next big thing but we have yet to see it really taking off. Why is that, when the technologies and processes already exist? Dr Zakaria Dakhli believes it is due to a fundamental incompatibility between business models and it is only when this has been fully understood that the long-awaited transformation can take place.

A machine learning approach to quality control

Nov 14, 2020

Most of the products we take for granted contain huge numbers of components assembled in multiple stages by different manufacturers. Quality control is vital throughout the assembly process with rigorous testing required at every step.

View all news