Baines, Lightfout, Benedettini & Kay: the servitization of manufacturing: a review of literature and reflection on future challenges

11 important questions on Baines, Lightfout, Benedettini & Kay: the servitization of manufacturing: a review of literature and reflection on future challenges

What are the findings of Baines et al. regarding the evolution of servitization within manufacturing industry?

Since servitization was first coined in 1988, there has been a growing output of papers from the USA and Western Europe that appear mainly in managerial and business practitioner literature, with authors tending to be from operations, services and business fields.
(= finding 2)

What are the findings regarding the forms of servitization? (Baines et al.)

There are various forms of servitization. They can be positioned on a product-service continuum, ranging from products with services as an add-on, to services with tangible goods as an add-on and provided through a customer centric strategy to deliver desired outcomes for the customer.
(= finding 3)

Commonly the literature suggests three sets of factors that drive companies to pursue a servitization strategy. What are the finding of Baines et al. regarding these 3 factors?

Servitization frequently occurs because of financial drivers (e.g. revenue stream and profit margin), strategic drivers (e.g. competitive opportunities and advantage) and by marketing drivers (e.g. customer relationships and product differentation.
(=finding 4)
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The design of services is significantly different to the design products since, by their nature, services are fuzzy and difficult to define. Manufacturers that decide on a service-oriented strategy have to adapt the necessary organizational structures and processes. Attempting to transform a traditional manufacturer to the required organizational strategy for effective servitization sets-up particular challenges. What are the findings of Baines et al. regarding these challenges?

The adoption of servitization by a conventional manufacturer principally presents challenges for service design, organization strategy and organization transformation.
(=finding 5)

What are the findings regarding the examples of leading practice in the servitization adoption? (Baines et al.)

Examples of leading practice in the adoption of servitization are focused on larger companies supplying high-value capital equipment such as Alston, ABB, Tales and Roll-Royce. these demonstrate how traditionally based manufacturing companies have moved their positions in the value-chain from product manufacturers to providing customers with integrated solutions that can include multi-vendor products (producten van meerdere leveranciers).
(=finding 6)

What is the finding of Baines et al. regarding the previous work that provides help for companies that want to servitize?

There is a paucity (schaarste) of previous work that provides guidance, tools, or techniques, that can be used by companies to servitize.
(=finding 7)

What is the last concluding finding of Baines et al. during their literature review?

The principal research need is to engineer tools or techniques that practitioners can apply to help in service design, organizational design and organizational transformation.
(=finding 8)

Which 3 major gaps (regarding finding 8) are there in the literature that are future research challenges for servitization? (Baines et al.)

1 How can/should competitive integrated product-service offerings be designed within the context of an industrial organization?
2 What is/should be the organizational strategy to deliver competitive integrated product-service offerings?
3 How can/should traditional manufacturing firms make the transitions to a servitized organizational strategy that delivers competitive integrated product-service offerings?

What are product services and are they useful to a firm?
Pure service = banking, tourism, transport etc. (it's about the service, the seller doesn't sell the product)
Product service = after-sales service, warranty etc.
 (the seller also sells the products and this service encourage the sale of the product)

Product services are services that are supplied complementary to a tangible product to make easier its choice, purchase, to optimize its use and increase it value for customers. For the firm they are (in)direct a source of profit. Direct: they are often more profitable than the products they surround. Indirect: they are expected by customers and they lead demand for products and are source of differentiation.

Why would customers want to have product services?

Cost reduction, time saving, knowledge/information access, risk minimization, comfort improvement, image/prestige reinforcement, improved 'use' value

Why would firms go from tangible to intangible?

More profit, difficult to copy and differentiation.

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