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The value of Big Data in servitization

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  • Opresnik, David
  • Taisch, Marco

Abstract

Servitization has become a pervasive business strategy among manufacturers, enabling them to undergird their competitive advantage. However, it has at least one weakness. While it is used worldwide also in economies with lower production costs, services in manufacturing are slowly becoming commoditized and will become a necessary, though not sufficient, condition for reaching an above average competitive advantage. Consequently, in this article we propose a new basis for competitive advantage for manufacturing enterprises called a Big Data Strategy in servitization. We scrutinize how manufacturers can exploit the opportunity arising from combined Big Data and servitization. Therefore, the concept of a Big Data Strategy framework in servitization is proposed. The findings are benchmarked against established frameworks in the Big Data and servitization literature. Its impact on competitive advantage is assessed through three theoretical perspectives that increase the validity of the results. The main finding is that, through the proposed strategy, new revenue streams can be created, while opening the possibility to decrease prices for product–services. Through the proposed strategy manufacturers can differentiate themselves from the ones that are already servitizing. This article introduces the possibility of influencing the most important of the five “Vs” in Big Data–Value, in addition to the other four “Vs”—Volume, Variety, Velocity and Verification. As in regards to servitization, the article adds a third layer of added value— “information”, beside the two existing ones: product and service. The results have strategic implications for managers.

Suggested Citation

  • Opresnik, David & Taisch, Marco, 2015. "The value of Big Data in servitization," International Journal of Production Economics, Elsevier, vol. 165(C), pages 174-184.
  • Handle: RePEc:eee:proeco:v:165:y:2015:i:c:p:174-184
    DOI: 10.1016/j.ijpe.2014.12.036
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    References listed on IDEAS

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    1. Bullinger, Hans-Jorg & Fahnrich, Klaus-Peter & Meiren, Thomas, 2003. "Service engineering--methodical development of new service products," International Journal of Production Economics, Elsevier, vol. 85(3), pages 275-287, September.
    2. Jay B. Barney, 1986. "Strategic Factor Markets: Expectations, Luck, and Business Strategy," Management Science, INFORMS, vol. 32(10), pages 1231-1241, October.
    3. Vandermerwe, Sandra & Rada, Juan, 1988. "Servitization of business: Adding value by adding services," European Management Journal, Elsevier, vol. 6(4), pages 314-324, December.
    4. Sheikhzadeh, Mehdi & Elahi, Ehsan, 2013. "Product bundling: Impacts of product heterogeneity and risk considerations," International Journal of Production Economics, Elsevier, vol. 144(1), pages 209-222.
    5. 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.
    6. Gebauer, Heiko & Fleisch, Elgar & Friedli, Thomas, 2005. "Overcoming the Service Paradox in Manufacturing Companies," European Management Journal, Elsevier, vol. 23(1), pages 14-26, February.
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    9. Lee, Sunghee & Yoo, Shijin & Kim, Daeki, 2016. "When is servitization a profitable competitive strategy?," International Journal of Production Economics, Elsevier, vol. 173(C), pages 43-53.
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