THE LAYERED NATURE OF SERVITIZATION CHALLENGES AND RESPONSES

Purpose: Multiple studies identify servitization challenges and some explore firm responses to them. These challenges appear difficult for manufacturers to overcome; possibly because servitization is a complex change process/journey with multiple business logics and trajectories. Four main types of servitization challenge (and responses) are recognised in the literature, and work has explored many of these challenges in more detail, but without necessarily exploring whether the challenges are interconnected. This paper explores the inter-relationships between servitization challenges, identifying a sequential series of challenges and the responses adopted to overcome these challenges.
Design/Methodology/Approach: We use a case study methodology, exploring the servitization challenges and responses at four manufacturers.
Findings: We find that manufacturers face layered challenges, that they appear to solve in order. As manufacturers overcame the first challenge they increased attempts to respond to subsequent sets of challenges.
Originality/Value: The notion that challenges are hierarchically layered may go some way to explaining why servitization was historically envisaged to involve a journey from a product- to a service-focused state. We challenge the majority of extant literature, in that while the transformation process might be a journey, not all firms become fully servitized - some retain a product-focused mind-set, and their transformation journeys differ.