Firm boundaries in servitization: Interplay and repositioning practices

Abstract

The present study analyzes how servitization delineates a manufacturer's boundaries. Based on interviews with 57 senior managers and extensive secondary data collected from four global solution providers, this study contributes by revealing how servitization shapes firm boundary decisions and repositioning practices. First, the results demonstrate that servitization changes a manufacturer's a) identity from technology-focused to customer-centric, b) capabilities to integrate technology development with customer value understanding, c) power position in the manufacturing ecosystem from upstream to downstream, and d) efficiency logic toward a service factory logic. Second, this study describes the interplay among these boundary lenses in servitization. The developed framework can assist managers in their strategy implementation when moving toward servitization.