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Servitization of business: Adding value by adding services

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  • Vandermerwe, Sandra
  • Rada, Juan
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    Abstract

    More and more corporations throughout the world are adding value to their core corporate offerings through services. The trend is pervading almost all industries, is customer demand-driven, and perceived by corporations as sharpening their competitive edges. Modern corporations are increasingly offering fuller market packages or "bundles" of customer-focussed combinations of goods, services, support, self-service, and knowledge. But services are beginning to dominate. This movement is termed the "servitization of business" by authors Sandra Vandermerwe and Juan Rada, and is clearly a powerful new feature of total market strategy being adopted by the best companies. It is leading to new relationships between them and their customers. Giving many real-life examples, the authors assess the main motives driving corporations to servitization, and point out that its cumulative effects are changing the competitive dynamics in which managers will have to operate. The special challenge for top managers is how to blend services into the overall strategies of the company.

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    Bibliographic Info

    Article provided by Elsevier in its journal European Management Journal.

    Volume (Year): 6 (1988)
    Issue (Month): 4 (December)
    Pages: 314-324

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    Handle: RePEc:eee:eurman:v:6:y:1988:i:4:p:314-324

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    Cited by:
    1. Johnson, Mark & Mena, Carlos, 2008. "Supply chain management for servitised products: A multi-industry case study," International Journal of Production Economics, Elsevier, vol. 114(1), pages 27-39, July.
    2. Thomas Johnsen & Mickey Howard & Joe Miemczyk, 2009. "UK defence change and the impact on supply relationships," Post-Print hal-00771092, HAL.
    3. Davide, Castellani & De Benedictis, Luca & Horgos, Daniel, 2011. "Can we really trust offshoring indices?," Working Paper 114/2011, Helmut Schmidt University, Hamburg, revised 21 Jun 2011.
    4. Faïz Gallouj & Faridah Djellal, 2012. "Two decades of research on innovation in services: which place for public services?," Post-Print halshs-00960624, HAL.
    5. Christensen, Jesper Lindgaard, 2013. "The ability of current statistical classifications to separate services and manufacturing," Structural Change and Economic Dynamics, Elsevier, vol. 26(C), pages 47-60.
    6. Rey, Guido M., 2012. "Once upon a Time…: A Reflection on the Relationships between Industry and Services - C’era una volta…: una riflessione sui rapporti fra industria e servizi," Economia Internazionale / International Economics, Camera di Commercio di Genova, vol. 65(1), pages 109-147.
    7. Martin Borowiecki & Bernhard Dachs & Doris Hanzl-Weiss & Steffen Kinkel & Johannes Pöschl & Magdolna Sass & Thomas Christian Schmall & Robert Stehrer & Andrea Szalavetz, 2012. "Global Value Chains and the EU Industry," wiiw Research Reports 383, The Vienna Institute for International Economic Studies, wiiw.
    8. Marion Drut, 2012. "Vers un système de transport opérant selon les principes de l'économie de la fonctionnalité," Working Papers hal-00992621, HAL.
    9. Falk, Martin & Peng, Fei, 2011. "The increasing service intensity of European manufacturing," MPRA Paper 38600, University Library of Munich, Germany.
    10. Bottani, Eleonora & Rizzi, Antonio, 2006. "Strategic management of logistics service: A fuzzy QFD approach," International Journal of Production Economics, Elsevier, vol. 103(2), pages 585-599, October.
    11. 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.
    12. 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.
    13. Mina, Andrea & Bascavusoglu-Moreau, Elif & Hughes, Alan, 2014. "Open service innovation and the firm's search for external knowledge," Research Policy, Elsevier, vol. 43(5), pages 853-866.
    14. Gebauer, Heiko & Gustafsson, Anders & Witell, Lars, 2011. "Competitive advantage through service differentiation by manufacturing companies," Journal of Business Research, Elsevier, vol. 64(12), pages 1270-1280.
    15. Faridah Djellal & Faïz Gallouj, 2011. "Innovation dans les services, performance et politique publique," Post-Print halshs-00749594, HAL.
    16. Tether, B. & Bascavusoglu-Moreau, E., 2012. "A Different Path to Growth? Service Innovation and Performance amongst UK Manufacturers," ESRC Centre for Business Research - Working Papers wp433, ESRC Centre for Business Research.
    17. Lino Cinquini & Andrea Tenucci, 2011. "Management Accounting for Service: A Research Agenda," Working Papers 201102, Scuola Superiore Sant'Anna of Pisa, Istituto di Management.
    18. Parry, Glenn & Bustinza, Oscar F. & Vendrell-Herrero, Ferran, 2012. "Servitisation and value co-production in the UK music industry: An empirical study of Consumer Attitudes," International Journal of Production Economics, Elsevier, vol. 135(1), pages 320-332.
    19. Markus Kelle, 2012. "Crossing Industry Borders: German Manufacturers as Services Exporters," wiiw Working Papers 92, The Vienna Institute for International Economic Studies, wiiw.
    20. Glass, Jacqueline & Dainty, Andrew R.J. & Gibb, Alistair G.F., 2008. "New build: Materials, techniques, skills and innovation," Energy Policy, Elsevier, vol. 36(12), pages 4534-4538, December.
    21. Faridah Djellal & Faïz Gallouj, 2012. "Beyond Productivity Measurement and Strategies: Performance Evaluation and Strategies in Services," Working Papers halshs-00748099, HAL.
    22. Peter Daniels & Pengfei Ni, 2014. "Urbanisation and changes in the sectoral structure of economic development: the scale of the manufacturing sector in Chinese cities and the shift towards service industry," Working Papers hal-00943972, HAL.

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