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Overcoming the Service Paradox in Manufacturing Companies

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  • Gebauer, Heiko
  • Fleisch, Elgar
  • Friedli, Thomas
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    Abstract

    We observed that extending the service business in manufacturing companies often leads to a "service paradox." Where there is such a paradox, substantial investment in extending the service business leads to increased service offerings and higher costs, but does not generate the expected correspondingly higher returns. We have worked with more than 30 equipment manufacturing companies to gain an understanding as to why manufacturing companies often fail to exploit the financial benefit of extending their service business. Based on this broad research, we attempt to provide guidance for managers in manufacturing companies seeking to successfully extend their service business.

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    Bibliographic Info

    Article provided by Elsevier in its journal European Management Journal.

    Volume (Year): 23 (2005)
    Issue (Month): 1 (February)
    Pages: 14-26

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    Handle: RePEc:eee:eurman:v:23:y:2005:i:1:p:14-26

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    Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/115/description#description

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    Related research

    Keywords: Service business Cognitive phenomena Organizational structuring;

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    Cited by:
    1. MALLERET, Véronique, 2005. "La rentabilité des services dans les entreprises industrielles: "enquête sur un postulat"," Les Cahiers de Recherche 811, HEC Paris.
    2. Sophie BOUTILLIER & Blandine LAPERCHE & Fabienne PICARD, 2013. "L’économie de la fonctionnalité : perspective historique et illustration empirique The economy of functionality: historical perspective and empirical illustration," Working Papers 35, Réseau de Recherche sur l’Innovation. / Research Network on Innovation.
    3. Dachs, Bernhard & Biege, Sabine & Borowiecki, Marcin & Lay, Gunther & Jäger, Angela & Schartinger, Doris, 2012. "The Servitization of European Manufacturing Industries," MPRA Paper 38873, University Library of Munich, Germany.
    4. Véronique Malleret, 2006. "La création de valeur par les services:une étude empirique dans des PMI," Revue Finance Contrôle Stratégie, revues.org, vol. 9(3), pages 67-104, September.

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