Servitization and Competitive Advantage: The Importance of Organizational Structure and Value Chain Position

TLDR

Servitization is a business‑model shift from selling goods to offering integrated goods and services, aiming to create competitive advantage through differentiation and higher customer satisfaction. The study examines the transition from base to advanced services. It analyzes responses from 102 senior executives in multinational firms. Results show growing interest in service‑led strategies, and that differentiation, high customer satisfaction, value‑chain position, and organizational structure are key to competitive advantage and superior performance.

Abstract

OVERVIEW:Servitization represents a business-model change and organizational transformation from selling goods to selling an integrated combination of goods and services. Competitive advantage is one outcome of this shift. During servitization, companies follow stages to realize services as an opportunity to differentiate from goods and achieve higher customer satisfaction. This study analyzes this transition from base, intermediate, and advanced services by presenting results from 102 senior executives in multinational companies. Our results suggest increasing interest in service-led strategies in manufacturing companies. The results also show that increasing differentiation and high customer satisfaction are fundamental to achieving competitive advantage and superior performance with services. The analysis also indicates the importance of a company's position in the value chain and the organizational structure it selects to support services in successful servitization.