Exploitation or exploration in service business development?

Abstract

Purpose The paper aims to explore how dynamic capabilities of sensing, seizing and reconfiguring shape the way in which service business is developed in a broad range of capital goods industries. Design/methodology/approach The paper takes an interpretative multiple‐case study approach. It seeks to develop primary organizing themes around the key dynamic capabilities and support them with research propositions. Findings The findings suggest that companies either exploit or explore the opportunities when it comes to service business development. Moreover, dynamic capabilities differ between the two approaches and predict which way a company chooses. Research limitations/implications Research limitations are mainly due to the nature of qualitative research. The dynamic capabilities identified here are by no means exhaustive; rather, they indicate directions for future research. Practical implications The research findings provide guidance to managers as to how the strategic shift towards services is influenced by dynamic capabilities. Originality/value Despite difficulties associated with service business development, the literature remains relatively silent on dynamic capabilities. However, dynamic capabilities are essential to the strategic shift towards service business.