Service-based business concepts: Diffusion and effects on customer companies in the German manufacturing industry

An increasing number of manufacturing companies are shifting their focus from offering products to an integrated offer of products and services. Customers no longer pay for a product, but for its performance. The challenges for the providers of servicebased business models have been extensively examined in academic research. The customer side, however, has received much less scientific attention by comparison. Whilst the diffusion of product-service bundles on the provider side has been examined in many qualitative analyses and a few empirical studies, only some case studies have investigated the effects of these offers on the customer side. Our paper aims to provide insights into the actual application of advanced services concepts in the German manufacturing industry. Data is drawn from the broad empirical database of a sample of 1,484 companies from German manufacturing industry conducted in 2009. The analysis presented in this paper indicates that 25 % of the responding manufacturing companies actually use advanced service offers. Furthermore, for a selected set of specific servicebased business offers insights are provided into which operational cost categories customers were able to realize reductions. Finally, insights into the character of industrial customers of advanced services could be gained by investigating the internal attitude towards risk management and life cycle cost methods.