From products to services - Defining barriers and success factors of transforming а product-centric sales function from selling products to selling services

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Journal Title
Journal ISSN
Volume Title
School of Business | Master's thesis
Date
2022
Major/Subject
Mcode
Degree programme
Management and International Business (MIB)
Language
en
Pages
86
Series
Abstract
This master’s thesis studies the barriers and success factors of transforming а product-centric sales function from selling products to selling services. The objective of the study is to fill the gap in the existing knowledge about the barriers and success factors in the servitization of a sales function. The topic has received attention in the previous literature only on the general level, but the sales function perspective has not received as much attention. For the practice, the study aims to provide an overview of the barriers and success factors of leading the sales toward the service orientation. The research question of the study is about, what are the barriers and success factors of transforming the sales function from selling products to selling services? The topic is relevant for the current business environment as more and more product-centric companies are aiming to climb up the value chain and transform to become profitable service providers. Based on the findings from the literature review and the empirical case study, a traditional product manufacturer, under the transformation towards the service orientation should consider the following barriers and success factors. The barriers can be categorized into three categories. Firstly, the people barriers are about lacking capabilities and change resistance. The operational barriers, in turn, are about structure and practices that are originally designed for a product manufacturer. And lastly, the cultural barriers, refer to the issues with the lack of customer centricity and lack of service culture that are both crucial for a successful service transformation. The success factors instead consist of four categories, which are the operational success factors including aligning the structures and practices to support the new service strategies. Secondly, the success factors considering people refer to focusing on people and developing the capabilities required in the service business. The capabilities should not be considered only internally inside the company but also with the external parties, like distributors. Thirdly, to succeed with the service transformation, the managers should foster customer centricity and create a service culture. As culture is a strong steering method for an organization, its importance cannot be understated. Lastly, the study suggests focusing on the offering which means focusing on its competitiveness. Issues with the offering cannot be covered by improving other processes including sales or marketing. In the future research, more the findings could be elaborated in relation to other disciplines that could bring some valuable insight to the transformation process and also the methodological approaches in studying the topic could be broadened.
Description
Thesis advisor
Granqvist, Nina
Keywords
servitization, product-service systems, sales transformation, service transformation
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