Facilitating Servitization in Manufacturing Firms: The Influence of Strategic Orientation

Abstract

Servitization has significant implications for the sustainable development of manufacturing, the economy, and the environment. However, it does not always produce returns as the firms expect, which may discourage them from engaging in this transition. In this study, we examine the facilitating effects of two dimensions of strategic orientation (i.e., technology and market orientation) on two types of servitization (i.e., basic and advanced service provision), and further investigate the performance impacts of these servitization types contingent on firm size. By conducting an empirical study, using survey data comprising 210 samples, we confirm that both technology and market orientation are positively related to basic and advanced service provision. Moreover, while they have equal effects on basic services, market orientation is more important than technology orientation for providing advanced services. We also find that, for basic services, these two strategic orientations function independently, whereas they reinforce each other in the provision of advanced services. Finally, the relationship between servitization and firm performance is contingent on the size of the firm. Our results show that small firms can benefit from providing basic services, rather than advanced services, while only advanced services can improve the performance of large firms further.

Breaking away from servitization paradox to improve manufacturing enterprises' service innovation performance: the roles of market orientation and service supply chain dynamic capability

“…Specifically, building dynamic capabilities can, first of all, help enterprises improve their sensitivity and adaptability to the external environment (Akter et al, 2021), grasp opportunities and identify risks. Secondly, adjust and optimize internal and external resources to form unique competitive advantages (Zhang et al, 2021). Thirdly, combine new knowledge with internal knowledge to promote service innovation and the long-term sustainable development of the firm (Razmdoost et al, 2020).…”

“…, 2021), grasp opportunities and identify risks. Secondly, adjust and optimize internal and external resources to form unique competitive advantages (Zhang et al. , 2021).…”

“…Market orientation is not to blindly produce products and then find consumer groups, but to focus on customer demands and produce around the demands (Herhausen, 2016). Manufacturing enterprises need to give full play to the role of market orientation and timely tap customers' current and future demand information (Zhang et al, 2021), so as to promote high-quality product services. Whether and how market orientation affects the service innovation performance of manufacturing enterprises still lacks of evidence correlation.…”

Mastering customer lock-in by servitization innovation strategies of asset specificity

“…Kohtamäki et al (2020) provided the concept that servitization in manufacturing is a process of transition from standardized products and additional services to customized and advanced services. Previous research on business-to-business (B2B) servitization mainly revealed the servitization framework from a comprehensive perspective (Baines et al , 2017; Raddats et al , 2019; Zhang et al , 2021). It is a continuous transformation for manufacturers, who increasingly integrate services into their business landscape (Forkmann et al , 2017; Niu et al , 2020).…”

“…Thus, the study frames the research issue of servitization innovation from a B2B perspective. In addition, exploring the mechanism behind actor engagement will help to examine the antecedents for B2B servitization in the business ecosystem (Zhang et al , 2021). That is, by examining possible antecedents and mechanisms, it helps to consolidate the understanding of B2B servitization.…”