Identifying Tensions in the Servitized Value Chain

OVERVIEW:

Servitization is recognized as an opportunity for manufacturing firms to harvest additional value by accessing new sources of revenue and expanding their reach up and down the value chain. It is a network activity, as it involves not just the servitizing firm but actors across the firm’s ecosystem. Most studies argue that servitization creates value for all network actors. However, service innovation activities may also result in the firm appropriating value from other actors, creating tensions in the network. Those tensions can undermine servitization efforts and destroy value for all participants. To avoid this outcome, firms must anticipate and manage tensions to create cooperative relationships with value chain partners. Through a series of semi-structured interviews with key actors at servitizing firms and their customers and intermediaries, we identified specific types and sources of tensions in the servitization process and explored how they might be mitigated or managed.

KEYWORDS::

• Servitization
• Business model innovation
• Service innovation
• Value chain

Additional information

Notes on contributors

Jamie Burton

Jamie Burton is a senior lecturer in marketing and Research Director of the practitioner-facing Customer Management Leadership Group at Alliance Manchester Business School. His research interests include customer management and services marketing. [email protected]

Vicky Story

Vicky Story is a reader in marketing and retailing at Loughborough University, UK. Her research interests include innovation and marketing strategy. [email protected]

Judy Zolkiewski

Judy Zolkiewski is associate head of division (MSM) for teaching at Alliance Manchester Business School at the University of Manchester. Judy’s research focuses on understanding the operation of business-to-business marketing and purchasing. [email protected]

Chris Raddats

Chris Raddats is a lecturer in marketing and operations at the University of Liverpool, UK. He specializes in the study of servitization. [email protected]

Tim S. Baines

Tim S. Baines, director of the Aston Centre for Servitization Research and Practice, is a leading authority on servitization and advanced services who works with both global and local manufacturing companies to help transform businesses. [email protected]

Dominic Medway

Dominic Medway, professor of marketing at the Institute of Place Management, Manchester Metropolitan University, UK, is a specialist in place marketing and management. [email protected]