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Exploring the causes of Servitization failure

abstract Adding services to their core product offering seems to be the panacea for manufacturing companies from developed economies to overcome the challenges of tightened margins on undifferentiated products, intensified competition and more complex costumer needs.
A long list of successful manufacturer such as Hilti, John Deere or Xerox was able to offer a higher value in use to their customers when combining products and services. Yet, despite these successful single cases, the general performance impact of service strategies seems to be uncertain. Empirical research has raised the question of a ‘service paradox’, as firms not always see the predicted return on their service investments or are even more likely to declare bankruptcy. Various authors have described single barriers causing the service paradox. However, little quantitative research identifies the extent to which, and in what conditions, these barriers drive manufacturing companies to fail at servitizing.
Therefore, I attempt to fill this gap with my dissertation and the research proposal at hand by means of a quantitative analysis that investigates the characteristics of the barriers and their interrelation that cause companies to fail at servitizing. Furthermore, I will look at the path dependencies of servitization failure with a qualitative research approach to explore the phenomenon in depth. This combination gives me the possibility to analyze the research problem on a larger scale without ignoring its specific details. Overall, by revealing the causes of failure and their history I will try to help manufacturers that plan to enter the service business or struggle at servitizing to avoid or overcome these barriers and establish a flourishing service business.
   
keywords Servitization, Failure
   
partner University of Cambridge
type dissertation project
status ongoing
start of project 2011
end of project 2011
additional informations
topics Servitization, Failure
methods Factor Analysis, Structural equation modeling
contact Georg Oschmann