1.1 Introduction
Manufacturers have transitioned from selling products to selling solutions in search of high returns and additional growth opportunities (Matthyssens & Vandenbempt, 2008; Rabetino, Kohtamäki, Lehtonen, & Kostama, 2015). Studies alternatively refer to this expansion as servitization (Vandermerwe & Rada, 1988), service infusion (Brax, 2005; Forkmann, Henneberg, Witell, & Kindström, 2017), service transformation (Martinez, Bastl, Kingston, & Evans, 2010), or service transition (Fang, Palmatier, & Steenkamp, 2008). Servitization is not a simple process, and therefore, positive outcomes cannot be guaranteed (Gebauer, Fleisch, & Friedli, 2005; Lee, Yoo, & Kim, 2016). This chapter intends to contribute to existing research by framing servitization through a practice lens, in which servitization is regarded as-practice and in-practice. It discusses related approaches and theories, utilizes frameworks and tools, and provides guidelines for advancing servitization in manufacturing companies.
The servitization process can be facilitated by a variety of micro-practices and behavioral foundations. To understand the role of sayings and doings in servitization, practice theory (Bourdieu, 1990) provides a useful framework, which can be utilized to create vocabulary and concepts for doings, tools, and sayings that enable servitization (Luoto, Brax, & Kohtamäki, 2017). Practice theory considers strategy from a micro-perspective, which companies achieve as a compilation of practices (Vaara & Whittington, 2012; Whittington et al., 2003), including not only the practical practice-in-use but also the sayings, discourses, and narratives (Luoto et al., 2017). This inclusion of sayings can be considered to be a central strength in practice theory because sayings frequently become doings in organizations and society (Seidl & Whittington, 2014). When considering practices such as sayings and doings that shape the servitization of manufacturing companies, we refer to a myriad of practices, which practitioners utilize when implementing and facilitating servitization.
This edited book and its articles intend to describe servitization through such lens to demonstrate practices, tools, routines, and frameworks that help practitioners adopt and implement servitization at the micro-level. In addition, this book contributes to our understanding of servitization by facilitating the ‘practice turn’ through encompassing a large collection of frameworks and tools, which are not restricted to any specific theory. Instead, they are obtained from scholars from different servitization-related streams, such as product-service systems (PSS) and service science, and based on many alternative theoretical approaches, such as services-dominant logic (SDL) and co-creation, resource-based viewpoints, industrial organization, strategy-as-practice, micro-foundations, and institutional theory, which are potential theoretical approaches to gain ideas and frameworks.
The present book could provide a platform to facilitate interdisciplinary collaboration and bridge the different servitization-related communities to enable scholars to answer research questions in a more comprehensive manner. As suggested by Rabetino, Harmsen, Kohtamäki, and Sihvonen (2018), field-level structures serve a fundamental role in the construction of the identity, boundaries, and content of the servitization domain and serve a central role in supporting the acquisition of a high degree of scientific maturity. The evolution of these structures will provide a means to progress and integrate servitization-related research.
1.2 Servitization as a Concept
Servitization research started in the late 1980s, when Vandermerwe and Rada (1988) coined the term. Since then, numerous studies have been published from a variety of different scholars (Lightfoot, Baines, & Smart, 2013), and hence the topic has grown from a trivial topic to a large research domain with multiple sub-fields. In their bibliometric review, which includes more than 1000 articles, Rabetino et al. (2018; see also Lightfoot et al., 2013) identified three main communities in servitization-related research: (1) servitization research, (2) product-service systems , and (3) service science.
In our definition of servitization, we reference Lightfoot et al. (2013, p. 1423) as we consider servitization as a transition in business model from products to PSS, where product and services are bundled to generate higher use-value, pricing is based on value, and capabilities support customer-dominant orientation. Although strategy may be surpassing the objects embedded in PSS, strategy materializes via offerings in many cases. When studying the relationship between servitization and performance, studies have often reflected the level of servitization by measuring the scope of service offerings (Partanen, Kohtamäki, Parida, & Wincent, 2017). For many reasons, this perspective is insufficient for addressing the complete scope of servitization; however, it enables separation among servitization strategy, structure (and capabilities), and outcomes (innovation or performance) (Kohtamäki, Hakala, Partanen, Parida, & Wincent, 2015). For long, the strategy literature has delimited environment, strategy, and structure, but in servitization literature, rare studies theorize about their interplay (Kohtamäki & Helo, 2015).
As any major business model transition process, servitization is implemented step-by-step in some cases or through a radical transition process in other cases. The transition from a product-dominant business model to a services-dominant model requires radical changes in strategy, structure, and organizational culture, where the company moves from product emphasis to customer emphasis. Servitization is a highly complex phenomenon, where success is determined by a configuration of multiple dimensions (Baines & Lightfoot, 2013; Rabetino, Kohtamäki, & Gebauer, 2017). Recent studies have begun to utilize configurational analysis or qualitative comparative analysis (e.g. fsQCA) to obtain configurations that explain servitization. In this methodology, studies rely on an equifinality assumption, which suggest that multiple configurations of factors can generate optimal outcomes. In their analysis, Sjödin, Parida, and Kohtamäki (2016) discovered four dimensions that may facilitate servitization in various configurations. The dimensions were service development capability , network management capability , mass service customization capability , and digitalization capability . In a similar fashion, Forkmann, Henneberg, Witell, and Kindström (2017) investigated how service offering, pricing, service capabilities, and their infusion interplay affect servitization. Their study encourages systematic analysis, including supplier, customer, and relationship-oriented factors.
1.3 Product-Service Systems
In this context, the need to distinguish between servitization as a transition process and the concrete offerings from this process is critical. By servitization, we refer to the business model transition (the process) that produces bundles of products and services (the offering) and transforms a product-oriented manufacturing firm toward a service-oriented technology company. Thus, the transition will not make the products obsolete but transform the strategic and operational logic by placing increasing emphasis on customers and services. This transition is a radical shift in the business model and mindset, which changes everything within a company.
Existing studies utilize multiple terms when referring to the offerings from servitization. Derived from the engineering discipline, the term ‘product-service systems’ (PSS) has gained popularity to describe an offering. Multiple streams of PSS coexist, which have produced an extensive terminology (Table 1.1). Some scholars have focused on designing eco-efficient PSS while examining the impact of these offerings on the environment (Mont, 2002; Tukker & Tischner, 2006). A different group of scholars has...