Strategies for Developing the Service Business in Manufacturing Companies

Higher market complexity and increasing competition are forcing traditional manufacturers to rethink their traditional business strategy. New growth potential and lucrative margins in the service business tempt companies to extend their traditional products business by services and so, change their position in the product-service continuum. But, which position should be selected? What does influence this decision? And, which implications does the new position have for the organization? This contribution tries to answer these questions by describing existing strategies for the development of the service business in manufacturing companies. First, environmental factors are specified that influence the decision on a service strategy. Second, four different service strategies along the product-service-continuum and their organizational implications are described in detail. The chapter ends with some conclusions on the implications for managers.