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Organizational capabilities for pay-per-use services in product-oriented companies

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  • Gebauer, Heiko
  • Saul, Caroline Jennings
  • Haldimann, Mirella
  • Gustafsson, Anders

Abstract

Pay-per-use services are an interesting phenomenon, both empirically and theoretically. Despite the alleged benefits, companies still struggle to succeed with pay-per-use services. Theoretically, it is common sense that existing service capabilities cannot easily be converted into organizational capabilities for pay-per-use services. Based on multiple case studies, the present article narrows down the existing empirical and theoretical gaps through an inductive research approach. Our findings make the following contributions to the field of services in product-oriented companies and to the servitization literature. We describe the organizational capabilities necessary for pay-per-use services (e.g., financing such services, aligning costs with equipment usage, and collaborating with customers). We reveal that companies should convert these capabilities into three core competencies (strategizing pay-per-use services, utilizing technologies for pay-per-use services, and de-risking pay-per-use services), in order to achieve competitive advantages.

Suggested Citation

  • Gebauer, Heiko & Saul, Caroline Jennings & Haldimann, Mirella & Gustafsson, Anders, 2017. "Organizational capabilities for pay-per-use services in product-oriented companies," International Journal of Production Economics, Elsevier, vol. 192(C), pages 157-168.
    • Handle: RePEc:eee:proeco:v:192:y:2017:i:c:p:157-168
    DOI: 10.1016/j.ijpe.2016.12.007
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    4. Jovanovic, Marin & Raja, Jawwad Z. & Visnjic, Ivanka & Wiengarten, Frank, 2019. "Paths to service capability development for servitization: Examining an internal service ecosystem," Journal of Business Research, Elsevier, vol. 104(C), pages 472-485.
    5. Li-Min Chuang & Yu-Po Lee, 2023. "Dilemmas and Strategies of Digital Servitization: A Multiple Case Comparative Study," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 13(5), pages 1-2.
    6. Grubic, Tonci & Jennions, Ian, 2018. "Do outcome-based contracts exist? The investigation of power-by-the-hour and similar result-oriented cases," International Journal of Production Economics, Elsevier, vol. 206(C), pages 209-219.
    7. Yu Zhang & Yajuan Wang & Yao Li, 2021. "Facilitating Servitization in Manufacturing Firms: The Influence of Strategic Orientation," Sustainability, MDPI, vol. 13(24), pages 1-20, December.
    8. Münch, Christopher & Marx, Emanuel & Benz, Lukas & Hartmann, Evi & Matzner, Martin, 2022. "Capabilities of digital servitization: Evidence from the socio-technical systems theory," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
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    11. Ornella Benedettini, 2022. "Structuring Servitization-Related Capabilities: A Data-Driven Analysis," Sustainability, MDPI, vol. 14(9), pages 1-20, May.
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    13. David Hidalgo-Carvajal & Ruth Carrasco-Gallego & Gustavo Morales-Alonso, 2021. "From Goods to Services and from Linear to Circular: The Role of Servitization’s Challenges and Drivers in the Shifting Process," Sustainability, MDPI, vol. 13(8), pages 1-26, April.
    14. Kohtamäki, Marko & Parida, Vinit & Oghazi, Pejvak & Gebauer, Heiko & Baines, Tim, 2019. "Digital servitization business models in ecosystems: A theory of the firm," Journal of Business Research, Elsevier, vol. 104(C), pages 380-392.
    15. Arash Najmaei & Zahra Sadeghinejad, 2023. "Green and sustainable business models: historical roots, growth trajectory, conceptual architecture and an agenda for future research—A bibliometric review of green and sustainable business models," Scientometrics, Springer;Akadémiai Kiadó, vol. 128(2), pages 957-999, February.
    16. Zhang, Junnan & Sun, Xiaohua & Yuan, Fang & Liu, Xiaoling, 2023. "Which type of servitization promotes firm performance: Embedded or hybrid?," Economic Modelling, Elsevier, vol. 126(C).
    17. Marko Kohtamäki & Stephan C. Henneberg & Veronica Martinez & Koji Kimita & Heiko Gebauer, 2019. "A Configurational Approach to Servitization: Review and Research Directions," Service Science, INFORMS, vol. 11(3), pages 213-240, October.
    18. Shah, Syed Aamir Ali & Jajja, Muhammad Shakeel Sadiq & Chatha, Kamran Ali & Farooq, Sami, 2020. "Servitization and supply chain integration: An empirical analysis," International Journal of Production Economics, Elsevier, vol. 229(C).
    19. Kolagar, Milad & Parida, Vinit & Sjödin, David, 2022. "Ecosystem transformation for digital servitization: A systematic review, integrative framework, and future research agenda," Journal of Business Research, Elsevier, vol. 146(C), pages 176-200.
    20. Genghua Tang & Hongxun Mai, 2022. "How Does Manufacturing Intelligentization Influence Innovation in China from a Nonlinear Perspective and Economic Servitization Background?," Sustainability, MDPI, vol. 14(21), pages 1-16, October.
    21. Chirumalla, Koteshwar & Leoni, Luna & Oghazi, Pejvak, 2023. "Moving from servitization to digital servitization: Identifying the required dynamic capabilities and related microfoundations to facilitate the transition," Journal of Business Research, Elsevier, vol. 158(C).
    22. Zhang, Peng & Shi, Victor & Shao, Lingzhi & Liu, Yang, 2023. "When can a manufacturer benefit from adding a direct sharing channel?," European Journal of Operational Research, Elsevier, vol. 309(1), pages 371-386.

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