Servitization of manufacturing companies - Framework for analyzing servitization capabilities

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School of Economics | Master's thesis
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This thesis examines servitization of manufacturing companies and offers a framework for analyzing servitization capabilities both at the business unit and company level. The objective of this paper is two-fold. Firstly, the paper aims to contribute to the research on servitization of manufacturing companies by offering a theoretical framework depicting servitization capabilities that concentrate on organizational culture and organizational configuration of a manufacturing company’s strategic business units (SBUs). Secondly, the paper aims to offer a tool for managers in manufacturing companies to analyze the current position of their business unit portfolio. In the beginning of the servitization process the framework can be used to distinguish gaps between the current and the preferred state, in order to understand the required scope of change. Based on the literature review, a theoretical framework is built by the researcher that depicts the position of SBUs in relation to organizational culture and organizational configuration. These two dimensions were found to have a large impact on the successfulness of servitization and thus seen as representing the business units’ capability to servitize. A case study is presented to employ the theoretical model built. This thesis represents a multiple embedded case study, as both the case company’s company and business unit levels are analyzed. Empirical data was gathered through interviews in a Finnish manufacturing company in spring 2010. The findings of this thesis suggest that four types of SBUs can be recognized based on the organizational culture’s orientation and configuration. SBUs that are service-oriented and have a customer-focused structure, labeled by the researcher as Value-Adding Service Champs, are seen most able to servitize successfully. Introvert Bulk Producers include business units that are product-oriented and have a manufacturing-centric configuration thus representing the stereotype manufacturer concentrating solely on internal manufacturing operations without much interest in customers or service. The business units in the third group, labeled as Satisfying Product Providers, are product-oriented and customer-centric, thus they aim to serve customers mainly through the sale of goods, while offering the required amount of product-related services in order to increase the level of product sales. Indecisive Focus Seekers consist of service-oriented and manufacturing-centric business units. These units may encounter internal conflicts as their unit culture promotes the importance of services and customer-relationships, while the configuration is suited for producing standardized products and does not contain many customer contact points.
services, servitization, manufacturing, organizational culture, organizational configuration
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