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What service transition? Rethinking established assumptions about manufacturers' service-led growth strategies

: Kowalkowski, Christian; Windahl, Charlotta; Kindström, Daniel; Gebauer, Heiko


Industrial marketing management 45 (2015), S.59-69
ISSN: 0019-8501
Fraunhofer IMW ()

Both academics and practitioners emphasize the importance for product firms of implementing service-led growth strategies. The service transition concept is well established, namely a unidirectional repositioning along a product-service continuum from basic, product-oriented services towards more customized, process-oriented ones ultimately leading to the provision of solutions. We challenge this service transition assumption and develop alternative ones regarding how product firms should pursue service-led growth. Using problematization methodology, and drawing on findings from thirteen system suppliers, we identify three service-led growth trajectories: (1) becoming an availability provider, which is the focus of most transition literature; (2) becoming a performance provider, which resembles project-based sales and implies an even greater differentiation of what customers are offered; and, (3) becoming an industrializer, which is about standardizing previously customized solutions to promote repeatability and scalability. Based on our critical inquiry, we develop two alternative assumptions: (a) firms need to constantly balance business expansion and standardization activities; and (b) manage the co-existence of different system supplier roles. Finally, we consider the implications for implementing service-led growth strategies of the alternative assumptions. A firm's competitive advantage originates increasingly from absorbing external knowledge. Absorbing external knowledge and the underlying learning processes are referred to as a company's absorptive capacity. In this article, we outline research trends on absorptive capacity. We apply a bibliometric analysis to describe the concept's historical development, define the intellectual core of the absorptive capacity concept, and discuss recent conceptualizations. Then, we identify two prominent streams in the absorptive capacity literature and provide a new approach on how to integrate them. Finally, we provide an outlook on possible themes in future research on absorptive capacity.