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Servitization strategy: priorities, capabilities, and organizational features

Servitization strategy: priorities, capabilities, and organizational features

Lin, Yong ORCID: 0000-0001-7118-2946, Shi, Yongjiang and Ma, Shihua (2012) Servitization strategy: priorities, capabilities, and organizational features. In: Xiong, Gang, Liu, Zhong, Liu, Xiwei, Zhu, Fenghua and Shen, Dong, (eds.) Service Science, Management, and Engineering: Theory and Applications. Intelligent Systems Series . Elsevier Inc., Oxford, UK, pp. 11-35. ISBN 978-0-12-397037-4 (doi:

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Servitization (Vandermerwe and Rada, 1988), as a process of value-creation through bundling services to physical products, has been broadly recognized as a competitive manufacturing strategy to the conventional manufacturer in many industries. It was found that the conventional manufacturers can achieve more revenue from their service units (Quinn et al., 1990; Quinn, 1992), and actually most of the added value comes from service constituents (Machuca et al., 2007). Servitization strategy increasingly plays essential roles on the operations performance and competitive advantage (Sawhney et al., 2004; Slack et al., 2004) of the conventional manufacturers, in particular during the economy recession time.

Two servitization strategies are identified based on the case studies in the PC industry and secondary documentation research. Product-centric servitization strategy focuses on providing physical products and associated services (normally after-sale services) on time to the customers, whilst service-centric strategy emphasizes on offering services or servitized products in a timely fashion. The capability requirements and organizational features are different for these two types of servitization strategy.

The results show that the choice of the servitization strategy largely depends on the core competence what have been established in the company. From the perspective of industry, its development of the whole industry is substantially affected by the interrelationships among all the related industries. Furthermore, well-designed policies by the industrial associations and the government are vital to the further development of the PC manufacturing industry.

Item Type: Book Section
Uncontrolled Keywords: servitization, service network, strategy priority
Subjects: Q Science > Q Science (General)
Q Science > QA Mathematics > QA75 Electronic computers. Computer science
Pre-2014 Departments: School of Computing & Mathematical Sciences
School of Computing & Mathematical Sciences > Department of Computer Systems Technology
Last Modified: 14 Oct 2016 09:18

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