Steering Manufacturing Firms Towards Service Business Model Innovation

Abstract

Increasingly. manufactunng rf,rms ore turning to services as a new way o( creating and captunng value Despite ,ts potent/GI benefits. many new product-service providers struggle to deploy service acovmes effeetrvely, not least because they (oil to rePect the presence o( service acovioes in their per(ormance management systems. This arode reports the results o( an in-depth case study, which examines how monu(acturers can steer the tronSJuon towards services. It shows that manu(actunng firms need to emphoSJze two separate but related d1mens1ons o( the market per(ormance o( service ocov1oes: "service adoption." repecung the proportion o( customers who purchase the manu(acturer's services: and "service coverage ... s1gnol1ng the range o( service elements or the comprehensrveness of the service contract that customers opt (or These two indicators, rePectmg service market per(ormance, should be supplemented with a "complememcmty index" designed to disclose whether the relationship between products and services 1s re1nforang or substitu{IVe. When combined, these 1nd1cators allow manu(octunng firms to deploy a service-based business model 1n an integrated and sustainable manner. (Keywords: Serv1ozaoon, Open Service lnnovauon, Product-Serv,ce Systems, Per(ormance Measures, Business Model lnnovauon)