Case study to understand why companies servitize to offer advisory services
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URL
Journal Title
Journal ISSN
Volume Title
Perustieteiden korkeakoulu |
Master's thesis
Authors
Date
2019-10-23
Department
Major/Subject
Strategy
Mcode
SCI3051
Degree programme
Master’s Programme in Industrial Engineering and Management
Language
en
Pages
83+8
Series
Abstract
Many manufacturing companies in developed economies have been striving to increase their revenues from services. This is mainly due to the economic and strategic benefits that adding services offers. Firms have been quite innovative about the types of services they offer their customers. Initially, manufacturing companies offered like basic maintenance and repair services for their products, but have since expanded it to a plethora product support services with time. Eventually many companies have also ventured into offering additional services such as financial (loans to buy products), leasing of products, to name a few. Similarly in recent times it can be observed that especially heavy machinery manufacturing companies have been introducing a new service offering called advisory services or consulting services. Here the manufacturing firm is expected to closely collaborate with the customer to help them achieve their business goals. However, currently there is limited research on this topic. This thesis is an attempt to address this gap. The case study attempts to understand why manufacturers want to servitize using advisory services and what capabilities they need to develop in order to deliver these successfully. Based on the findings from this study, manufacturers offer advisory services primarily for the strategic benefits it brings rather than the economic benefits. It is seen as an extension to its existing product and service offering, rather than a robust revenues stream by itself. Advisory services enables the manufacturer to collaborate intimately with their customers and thereby enables them to move closer into the customer’s organization. This has a number of benefits which have been discussed in detail. Furthermore, advisory services is also used as vehicle to acquire knowledge to develop some strategic capabilities for the manufacturer. To deliver advisory services successfully, the key capability gaps lie within the following areas – sales organization, shift from product centric organization culture to customer centric culture and digital technological capabilities such as data analytics.Description
Supervisor
Gustafsson, RobinThesis advisor
Töytäri, PekkaKeywords
manufacturing servitization, advisory services, motivations to servitize, capabilities