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Servitization as a Productive Strategy of a Firm - Evidence from the Forest-Based Industries

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  • Viitamo, Esa
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    Abstract

    A central aspect of the industrial evolution in the advanced economies is the phenomenon called servitization. In general, the term servitization or product-service transition is used to highlight the change, where the tangible offering of a manufacturing firm is augmented with intangible services. In this paper, servitization is addressed broadly as a strategic reorientation by a manufacturing firm which entails adjustments in the firm business model as well. A useful framework to address the product-service transition is the socio-economic view of service productivity. On that basis, the paper shows how the productive strategy of the servitizing firm is linked with the business model that builds on service-dominant (S-D) logic. The resources and capabilities of the firm are central drivers in servitization. Via the empirical case study of the servitization strategies in the Finnish forest cluster, the paper extends the scope of analysis in the servitization research from the installed base -industries to the process industries. In a wider context, this paper contributes to the research collaboration between Aalto University (BIT) and Research Institute of the Finnish Economy, ETLA in the field of service research.

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    Bibliographic Info

    Paper provided by The Research Institute of the Finnish Economy in its series ETLA Reports with number 14.

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    Length: 34 pages
    Date of creation: 07 Aug 2013
    Date of revision:
    Handle: RePEc:rif:report:14

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    Related research

    Keywords: servitization; strategy; productivity; service-dominant logic; forest-based industries;

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    References

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    1. Teece, David J., 1982. "Towards an economic theory of the multiproduct firm," Journal of Economic Behavior & Organization, Elsevier, vol. 3(1), pages 39-63, March.
    2. Teece, David J., 1980. "Economies of scope and the scope of the enterprise," Journal of Economic Behavior & Organization, Elsevier, vol. 1(3), pages 223-247, September.
    3. Bernolak, Imre, 1997. "Effective measurement and successful elements of company productivity: The basis of competitiveness and world prosperity," International Journal of Production Economics, Elsevier, vol. 52(1-2), pages 203-213, October.
    4. Teece, David J., 1993. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," Research Policy, Elsevier, vol. 22(2), pages 112-113, April.
    5. Gadrey, Jean, 2000. "The Characterization of Goods and Services: An Alternative Approach," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(3), pages 369-87, September.
    6. Parrinello, Sergio, 2004. "The service economy revisited," Structural Change and Economic Dynamics, Elsevier, vol. 15(4), pages 381-400, December.
    7. Hill, T P, 1977. "On Goods and Services," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 23(4), pages 315-38, December.
    8. Pajarinen, Mika & Rouvinen, Petri & Ylä-Anttila, Pekka, 2013. "Services: A New Source of Value," ETLA Brief 11, The Research Institute of the Finnish Economy.
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