Organizing servitization: Developing a framework to guide the transition for manufacturing firms

Since the early 1990s an increasing number of manufacturing firms such as IBM, Xerox and MAN are adding services to their products to meet the competitive pressures of product commoditization, stagnating sales and more demanding customers. This transition process is referred to as servitization. It appears that many manufacturing firms are struggling to implement a servitization strategy to attain their strategic goals since they lack insights into the strategic and organizational aspects of this transition. A framework that integrates these aspects can present the currently lacking comprehensive overview of servitization for manufacturing firms. This framework offers a guideline to successfully carry out servitization. Each transition phase can be described according to the following strategic dimensions: type of offering, type of services, type of customer, customer relationship and innovation orientation. Each phase also aligns with a certain organizational structure, since misalignment is a barrier to successful servitization for manufacturing firms. Proceeding in servitization therefore involves an organizational transition. Manufacturing firms move from a product-centric to first a more service- and then a customer-focused structure that integrates product and service activities, to fulfil the strategic goal to become a solution provider.

Subject

servitization
transition process
organizational structure
manufacturing firm
framework development

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master thesis

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