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Service Business Development in small and medium capital goods manufacturing companies

Heiko Gebauer, Marco Paiola & Bo Edvardsson

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abstract This paper focuses on how small and mediumsized enterprises (SMEs) from the capital goods manufacturing sector develop the service business. Assuming the service business development depends on contingency factors, this paper explores how SMEs align external environment, strategy and organizational design.

A multi-case study design on capital goods manufacturers from Italy, Sweden and Switzerland was employed.

Service strategy formation and implementation in SMEs depend on their value chain position and the business environment. Suppliers with few customers selling directly to customers increasingly offer logistic and repair services as well as R&D-oriented services. In contrast, OEMs selling through distributors do not primarily extend the services offered, but rather reconsider service process configuration together with distributors. Altogether, we de-scribe four different service responses to specific combinations of value chain position and business environment.

Our findings are limited to the capital goods manufacturing industry.

Whereas previous research neglects how SMEs develop the service business, this article offers key insights in the interrelationship among the value chain position and the business environment as well as the service strategy formation and implementation. We enrich the knowledge of service business development in manufacturing by explaining how the value chain position and business environment determine the way how SMEs develop the service business.
   
type journal paper
   
keywords Service business development, capital goods industry, service strategy, strategy formation and implementation, SMEs
   
language English
kind of paper journal article
date of appearance 18-5-2010
journal Managing Service Quality
publisher Emerald (Bingley)
ISSN 0960-4529
DOI 10.1108/09604521011027561
volume of journal 20
number of issue 2
page(s) 123-139
review double-blind review
   
citation Gebauer, H., Paiola, M., & Edvardsson, B. (2010). Service Business Development in small and medium capital goods manufacturing companies. Managing Service Quality, 20(2), 123-139, DOI:10.1108/09604521011027561.