Competitive advantage through servitization


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in this docx reader will learn how the Servitization is the competitive edge for Manufacturing frims now-a-days. cThis docs includes literature of servitization+case study of LG

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Competitive advantage through servitization

  1. 1. Competitive Advantage of Manufacturing Firms Through Servitization
  3. 3. By Manufacturing Companies Competitive Advantage Through SERVITIZATION
  4. 4. “Servitization is viewed as the way in which firms provide an integrated bundle of both goods and services or add extra service components to their core offering.“ SERVITIZATION
  6. 6.  Products today have a higher service component than in previous decades.  the Servitization of products.  Virtually every product today has a service component in it.
  7. 7. A Servitized firm Siemens is committed to providing outstanding customer service for the lifetime of your appliance. BUT HOW?? SIEMEN S
  8. 8.  Arrange an engineer visit  Product advice SIEMENS •Replacement spare parts & accessories
  9. 9.  Instruction manuals  Dishwasher repair action SIEMENS
  10. 10. “Servitization is the innovation of an organizations capabilities and processes to better create mutual value through a shift from selling products to selling product service systems..“ SERVITIZATION
  11. 11. “Selling product-----------selling product-service system”
  12. 12. More and more manufacturers are competing though a portfolio of integrated products and services. This is a SERVICE-LED COMPETITVE SRTATEGY and the process through which it is achieved is called SERVITIZATION. SERVITIZATION
  13. 13. It goes in a way…
  14. 14.  focused on “Product”.  put their efforts on  back - end- units  cost reduction  product innovation Traditional Concept
  15. 15.  Manufacturers need to consider if they are to sustain future business and differentiate themselves from the competition.  They must integrate client and capability requirements to provide tailored solutions. BUT…
  16. 16.  Product is the entry ticket into the future business/profit stream.  But all future sales depends on services, this is where reputation brand image  profitability are determined. customer satisfaction & retention In Case Of Manufacturing
  17. 17. •Significant transformation from “back end” to “front end” activities. •Customer-facing front end units are established to engage directly with customers Transformation to SERVITIZATION
  18. 18.  Companies are pushing themselves towards servitization due to following factors:  technology  globalization  fierce competitive pressure  profitability  differentiation in market  “Why do your customers choose to buy from you rather than from your competition?” Main Drivers
  19. 19.  Offering great products, technologies or services is merely an entry stake.  The need that exists is to maintain an edge in the way their companies interact with customers. They recognized that customers often value how they interact with their suppliers as much as or more than what they actually buy. Now Manufacturers are of the view…
  20. 20. •Servitization becomes a customer - centric approach. How Companies are servitizing? •The trick for companies is to redefine their offerings in ways that make it easy for customers to get the benefits they Shifting the Traditional Mind-Set
  21. 21. •The boundaries between manufacturing and service are becoming increasingly blurred. •More and more manufacturers are competing though a portfolio of integrated products and services and the process through which it is achieved is called servitization. Concluding …
  22. 22. LG As An Servitized Firm
  23. 23. Introduction of LG • LG Electronics Inc. is a South Korean multinational electronics company • It is the world's second-largest television manufacturer • The world's fourth-largest mobile phone maker by unit sales in the third quarter of 2013.
  24. 24. • The company was originally established in 1958 as Gold Star. • The LG Group was a merger of two Korean companies, Lucky and Gold Star, from which the abbreviation of LG was derived • In past, household products were sold under the brand name of Lucky, while electronic products were sold under the brand name of GoldStar • In 1995, GoldStar was renamed LG Electronics, and acquired the US electronics company Zenith
  25. 25. LG Electronics Pakistan • In December 03, 2011, LG Electronics and Ruba Electronics signed a distributor-ship agreement. • The agreement was signed by Mr. H.S. Paik, President LG Electronics Gulf region and Mr. Manzoor Khan, Director Ruba Electronics in a ceremony.
  26. 26. LOGO
  27. 27. SLOGAN "Life’s Good” conveys a message that LGE enriches customers’ lives with its products, services and technology, and creates a unique brand identity of the company.
  28. 28. Customer Value Creation LG Electronics is committed to delivering on its promise to customers of enriching lives through technology innovation. LG Electronics strives to provide its customers worldwide with the best value creating products while listening to their feedback, and assisting with fast, accurate, and unique service.
  29. 29. COMMUNICATION FOR PRODUCT DEVELOPMENT LGE is conducting a thorough market and customer analysis to introduce products that satisfy customer needs. A close study of local customers’ lifestyles and collaboration with local research organizations are also part of our effort to identify customer needs. For example ,they develop customized TV for senior citizens with care facilities
  30. 30. PROSUMER MARKETING COMMUNICATION LGE has been involve prosumer marketing activity that allows consumers to be directly involve in the development stage of products. One main example of this is the TROMMIZ program, in which 15 housewife bloggers participated in the development phase of the TROMM washing machine
  31. 31. PRODUCT PROTFOLIO • The company operates its business through Six divisions: • Mobile Communications • Home Entertainment • Home Appliances • Air Conditioning • IT Products • Energy Solutions.
  32. 32. Product Range of LG
  33. 33. Bundle Of Services LG is Offering To Their Customer
  34. 34. PRODUCT QUALITY AND SAFETY LG Electronics places the highest value on providing customers with reliable products which they can use in a safe way. Product safety must be ensured under any circumstance, and product safety has the highest priority over sales objective, product design, marketability and expense issues.
  35. 35. PARTS & ACCESSORIES Order product Part & Accessories direct from Shop LG or from an LG Authorized Parts Distributor.
  36. 36. De-installation & Reinstallation Services They provide the scheduling, management and logistics concerns off your plate by dispatching our LG- certified service technicians to de-install the defective unit and reinstall the operation unit
  37. 37. LG’s DIRECT SERVICE LG have teams of expert technicians in all major cities service centre. They provide: • Repairing Services • They use genuine LG replacement parts, never imitation • They Provide Home Service And Pick & Drop Free of Cost • They do In-Warranty and Out-of-Warranty service • We Provide Technical Solutions And Support For All Products • All work backed by LG's promise of excellent service
  38. 38. LG Financing Advantage Program To address business challenge, the LG Financing Advantage Program offers lease financing solutions tailored to your specific needs. LG makes it simple to acquire powerful and engaging display solutions for your present needs while providing the opportunity to upgrade as your business requirements change
  39. 39. DOWNLOAD & MANUALS • Download tutorial, manuals, documents, updates, software, etc for your product TV, Refrigerators, mobile, microwave oven ,etc
  40. 40. HELP AND SUPPORT LG provides following five options in its online help and support system in order to resolve any problem or for guideline regarding usage of product: • LIVE CHAT :Chat Online with a Support Representative • EMAIL: Send an Inquiry to LG Customer Service and Support • PHONE :Call an LG Support Representative
  41. 41. • REGISTERATION OF PRODUCT: A few of the benefits that you can look forward to: o Handy tips from LG's product pros o Firmware updates to keep your LG product up-to-date o News about warranty plans that are best for you o Exclusive previews of new LG products and innovations o Special LG offers and promotions • RETURN :In case of any damage during delivery of product or malfunctioning of any part within warrantee period then customer have return facility.
  42. 42. CONCLUSION The brand of LG is delightfully smart. LG strives to enhance the customer’s life and lifestyle with not just a product but the combination of product and services. So, LG wants to create customer value through their technological innovative product but also with best quality customer services