As manufacturing companies pursue a servitization strategy, they are increasingly relying on developing digitalization capabilities to interact and co-create value with their customers. However, many lack an understanding of what constitutes digitalization capabilities and how they can create value with customers. To address these questions, the study builds on qualitative data from four industrial manufacturing firms to conceptualize three underlying subcomponents of digitalization capabilities, namely, intelligence capability, connect capability, and analytic capability. The study identifies and explains how digitalization capabilities enable value co-creation with customers through perceptive and responsive mechanisms. This study contributes to the servitization literature by showcasing how digitalization capabilities are enabling value co-creation in a business-to-business context.

Global competition is driving manufacturing companies to generate greater value by offering innovative services. Companies such as Ericsson, IBM, and GE are increasingly selling total solutions rather than standalone physical products with simple add-on services. Service innovation offers the potential to create and commercialize new services and new product-service combinations to deliver added customer value ( Berry et al. 2006 ;Paswan, D'Souza, and Zolfagharian 2009 ;Kohtamäki et al. 2013 ). However, such business model transformation represents a signifi cant change for the headquarters R&D function (the "back end") in large, global manufacturing fi rms, which must adapt internal development routines to meet the requirements of global services innovation.Succeeding with service innovation on a global scale presents major challenges for multinational manufacturing companies, and current knowledge on how to address such

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Purpose The dominant-view within servitization literature presupposes a progressive transition from product to service orientation. In reality, however, many manufacturing firms maintain both product and service orientations throughout their servitization journey. Using the theoretical lens of organizational ambivalence, the purpose of this paper is to explore the triggers, manifestation and consequences of these conflicting orientations. Design/methodology/approach A multiple case study method was used to analyze five large manufacturing firms that were engaged in servitization. Semi-structured interviews were conducted with 35 respondents across different functions within these firms. Findings Servitizing firms experience organizational ambivalence during servitization because of co-existing product and service orientations. This paper provides a framework that identifies the triggers of this ambivalence, its multi-level manifestation and its consequences. These provide implications for explaining why firms struggle to implement servitization strategies due to co-existing product and services orientations. Understanding organizational ambivalence, provides opportunity to manage related challenges and can be vital to successful servitization. Originality/value Considering the theoretical concept of ambivalence could advance the understanding of the effects and implications of conflicting orientations during servitization in manufacturing firms.

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