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Service business development in manufacturing companies

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This presentation was hold at the Arizona State University. It describes strategies and pathways for extending the service business. It highlights necessary adaptations in the organizational ...

This presentation was hold at the Arizona State University. It describes strategies and pathways for extending the service business. It highlights necessary adaptations in the organizational structures and competencies. It shows relevant dynamic and operational capabilities as well as management innovations for making the service business successful.

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  • Ergänzung der Produktorientierung mit der Dienstleistungsorientierung als Ausweg aus der Beschränkung bisheriger produktorientierter Geschäftsmodelle. Weg zur Dienstleistungsorientierung verschiedene Entwicklungsstufen. Historisch – Dienstleistungswüste, Produktverkauf hiess noch Vertrieb und es ging eher darum Kunden ausreichend viele Produkte zur Verfügung zu stellen und Nachfrage zu befriedigen. Vertriebsfunktion zur Vertriebs/Service-Funktion gewandelt, Service-Funktion –ad-hoc unterstützung. Waschmaschinen läuft aus oder Fernseher ist kaputt. Dann Servicetechniker bezahlt man für Reparatur und Ersatzteile (Fixpreis oder variable ja nach Aufwand). Service-Funktion in Marktorganisation aktiv versucht Dienstleistungen zu verkaufen. Typisches Beispiel sind Serviceverträge für eine bestimmten Zeitraum 1 oder 2 Jahre, alle Servicetätigkeiten und Ersatzteile für einen bestimmten Festbetrag. Serviceveträge findet man heute auch teilweise bei Waschmaschinen (V-Zug), Werkzeugmaschinen). Weitere Ausbau hat jedoch ein Risiko, statt die Dienstleistungswüste in einen Dienstleistungsgarten zu verwandeln. Einen Garten der gut gepflegt ist und einen schönen Ertrag erwirtschaften, landen Sie im Dienstleistungsdschungel. Dienstleistungsdschungel heisst, die ausuferndes Dienstleistungsangebot, mangelnde Kostentransparenz, Kunden verlieren die Übersicht über das Dienstleistungsangebot und den –nutzen. Am Ende investieren sie in das Dienstleistungsgeschäfts, aber die erwarteten Return-on Investments in den Dienstleistungsbereich sind geringer als erwartet. Vermeidung des Dienstleistungsdschungels durch Professionelles und systematisches Dienstleistungsmanagement Service als strategisches Instrument und Wandel zu Performance-based Geschäftsmodellen oder pay-per-use. Beispiel Flugzeugturbine, GE & Rolls-Royce neue Turbinengeneration, günstiger im Unterhalt, und leichte Verbesserung der Leistung, niemand wollte aber die Turbine, Marktflop. Kurz vor dem Scheitern. Ausweg Power-by-the hour. Bezahlung nur für die Verfügbarkeit und die Nutzung der Turbine. Revolution der gesamten Wertschöpfungskette in der Luftfahrt. Boeing und Airbus umgangen, Konzept gemeinsam mit Fluggesellschaften, (Power-by-the-hour – Anstieg ins Finanzierungsgeschäfts für Flugzeuge, Boeing und Airbus erwirtschaften bis heute nur circa 2-3% der Umsatzes mit Dienstleistungen. Turbinenhersteller bis zu 50%. Solchen strategischen Erfolgen von Dienstleistungen stehen jedoch auch strategische Risiken gegenüber. Konsequenz solcher Risiken sehr gut bei Herstellern von Kopiergeräten und Druckern erkennbar. Bereich professionelle Drucker. Performance-based oder pay-per-use. Bezahlung pro Kopie oder gedruckte Seite. Dunkle Seite (Risiko/Gefahr) bei diesem Geschäftsmodell ist Verändertes Kundenverhalten und erzeugte Preistransparenz. Kunden erkennt kaum Qualitätsunterschiede. Gedruckte Seite HP = Xerox, Kopie von Canon = Sharp, kaum qualitative Unterschiede. Kunden erkennt nur, eine Seite 7 Rappen oder 6 Rappen. Kaufentscheid rein vom Preisabhängig. Kostenführerschaft als notwendige Erfolgsposition. Ruinöser Preiswettbewerb, fast keines der Unternehmen wirklich Profitabel war, Verlagerungen in Niedriglohnländer und Zusammenschlüsse. Eventuell Form erklären.
  • R&D and innovation competencies Logistic & purchasing competencies Manufacturing competencies Assembly and production skills Understanding of customer’s technical, business, and operational needs Combination of product and services into customer-specific solutions Engineering competencies R&D and innovation competencies Logistic & purchasing competencies Manufacturing competencies Assembly and production skills Engineering competencies Recognizing and dealing with service opportunities and threats Service-oriented values and behavior Service-oriented personnel recruitment, development, and compensation Service-oriented organizational structures (e.g., separate business unit for services, service innovation processes) Exploiting the sensed opportunities and fending off threats Modifying operational capabilities Over the years and responding to some criticism of the approach (see especially Priem and Butler, 2001), the RBV was developed and enriched. It started to deal (once again) more explicitly with how a firm’s external environment is influencing the process of managing resources and how a firm’s resources are transformed into value. Sirmon et al. (2007) for example recently proposed a dynamic resource management model of value creation. Bingham and Eisenhardt (2008, p. 242) contributed to the RBV by arguing that “competitive advantage stems from both the characteristics of individual resources as497 well as the linkages among the resources”. Then they apply the VRIN criteria basically to the combinations of resources and especially see inimitability as the key criterion for gaining competitive advantage. Instead, dynamic capabilities or “the firm’s ability to integrate, build and reconfigure internal and external competencies to address rapidly changing environments” (Teece et al., 1997, p. 516) are seen as key and perceived as the cornerstone of competitive advantage. Dynamic capabilities (still following Teece et al., 1997, pp. 518-24) are based upon highly firm-specific managerial and organizational processes (or routines) and are shaped to a considerable degree by its specific asset position (current specif Teece has recently developed the dynamic capability framework considerably in another landmark study (2007 and included in 2009). Here, he more deliberately attempts to weave an “umbrella framework that highlights the most critical capabilities needed to sustain the evolutionary and entrepreneurial fitness of the business enterprise” (Teece, 2007, p. 1322). He proposes three categories of dynamic capabilities that he sees as most critical for sustaining evolutionary and entrepreneurial fitness [10], i.e. the capacity to sense and shape opportunities and threats, to seize opportunities and dynamic capabilities to maintain competitiveness through enhancing, combining, protecting and, when necessary reconfiguring the business enterprise’s intangible and tangible assets (Teece, 2007, p. 1319). “ the capability of an organization to perform a coordinated set of tasks utilizing organizational resources, for the purpose of achieving a particular end result”. They stress that “dynamic capabilities do not directly affect output for the firm in which they reside, but indirectly contribute to the output of the firm through an impact on operational capabilities”. Winter has formulated the basic difference between zero-level and higher order capabilities nicely. He refers to the first as “how we earn a living now capabilities” and in contrast, the others as “capabilities that would change the product, the production process, the scale, or the customers (markets) served” (p. 992).
  • Model of attention and firm behavior to explain is not surprising that, having created a success- ful company by making a superior product, management continues to be oriented toward the product rather than the people who con- sume it. It develops the philosophy that contin- ued growth is a matter of continued product innovation and improvement. Because electronic products are highly complex and sophisticated, managements be- come top-heavy with engineers and scientists. This creates a selective bias in favor of research and production at the expense of marketing. The organization tends to view itself as making things rather than as satisfying customer needs. Marketing gets treated as a residual ac- tivity, “something else” that must be done once the vital job of product creation and produc- tion is completed. Engineers and scientists are at home in the world of concrete things like machines, test tubes, production lines, and even balance sheets. The abstractions to which they feel kindly are those that are testable or manipulat- able in the laboratory or, if not testable, then functional, such as Euclid’s axioms. In short, the managements of the new glamour-growth companies tend to favor business activities that lend themselves to careful study, experimenta- tion, and control—the hard, practical realities The latter occupy a stepchild status. They are recognized as exist- ing, as having to be taken care of, but not worth very much real thought or dedicated at- tention.
  • Frequently executed Minimal causal ambiguity between action and outcome Moderate heterogeneity of tasks for executing the routines Executed only occasionally Minimal causal ambiguity between action and outcomes High heterogeneity of tasks for executing routines Executed continuously High causal ambiguity between actions and outcomes Low heterogeneity of tasks for executing routines
  • R&D and innovation competencies Logistic & purchasing competencies Manufacturing competencies Assembly and production skills Understanding of customer’s technical, business, and operational needs Combination of product and services into customer-specific solutions Engineering competencies R&D and innovation competencies Logistic & purchasing competencies Manufacturing competencies Assembly and production skills Engineering competencies Recognizing and dealing with service opportunities and threats Service-oriented values and behavior Service-oriented personnel recruitment, development, and compensation Service-oriented organizational structures (e.g., separate business unit for services, service innovation processes) Exploiting the sensed opportunities and fending off threats Modifying operational capabilities Over the years and responding to some criticism of the approach (see especially Priem and Butler, 2001), the RBV was developed and enriched. It started to deal (once again) more explicitly with how a firm’s external environment is influencing the process of managing resources and how a firm’s resources are transformed into value. Sirmon et al. (2007) for example recently proposed a dynamic resource management model of value creation. Bingham and Eisenhardt (2008, p. 242) contributed to the RBV by arguing that “competitive advantage stems from both the characteristics of individual resources as497 well as the linkages among the resources”. Then they apply the VRIN criteria basically to the combinations of resources and especially see inimitability as the key criterion for gaining competitive advantage. Instead, dynamic capabilities or “the firm’s ability to integrate, build and reconfigure internal and external competencies to address rapidly changing environments” (Teece et al., 1997, p. 516) are seen as key and perceived as the cornerstone of competitive advantage. Dynamic capabilities (still following Teece et al., 1997, pp. 518-24) are based upon highly firm-specific managerial and organizational processes (or routines) and are shaped to a considerable degree by its specific asset position (current specif Teece has recently developed the dynamic capability framework considerably in another landmark study (2007 and included in 2009). Here, he more deliberately attempts to weave an “umbrella framework that highlights the most critical capabilities needed to sustain the evolutionary and entrepreneurial fitness of the business enterprise” (Teece, 2007, p. 1322). He proposes three categories of dynamic capabilities that he sees as most critical for sustaining evolutionary and entrepreneurial fitness [10], i.e. the capacity to sense and shape opportunities and threats, to seize opportunities and dynamic capabilities to maintain competitiveness through enhancing, combining, protecting and, when necessary reconfiguring the business enterprise’s intangible and tangible assets (Teece, 2007, p. 1319). “ the capability of an organization to perform a coordinated set of tasks utilizing organizational resources, for the purpose of achieving a particular end result”. They stress that “dynamic capabilities do not directly affect output for the firm in which they reside, but indirectly contribute to the output of the firm through an impact on operational capabilities”. Winter has formulated the basic difference between zero-level and higher order capabilities nicely. He refers to the first as “how we earn a living now capabilities” and in contrast, the others as “capabilities that would change the product, the production process, the scale, or the customers (markets) served” (p. 992).
  • Wertbeitrag anfangen – Reduktion Produktumsatz, Anteil der Dienstleistungen nimmt schnell zu Andere Wertkonstellation, nicht mehr Verkauf über Qualität der Zerspannungswerkzeuge bei argumentierbaren Preisen, sondern effektive Kosten für den Werkzeugeinsatz. Kunde bezahlt werkzeuge die wirklich gebraucht werden und die zu Aufträgen passen. Dynamische Fähigkeiten –Fähigkeit ein Unternehmen zu verändern, neu auszurichten, neue Geschäftfelder zu erobern. Wahrnehmen der Chancen und Risiken, Richtiges Dimensionieren des neuen Geschäftsmodells, Bsp. Entsorgung – wie gross schneidet man das Leistungspaket, Durchsetzung der Veränderung im Unternehmen, Pilotkunde, Motivation der Mitarbeiter radikale Veränderung mitzumachen, gleichzeitig das bestehende bewahren. Radikal – Veränderung der Verkaufstaktik, Umgehen der direkten Kunden (Erstausrüstung, Distributoren), Um so eine Radikale Veränderung zu schaffen braucht es dy
  • Theodore Levitt „Selling the hole instead of the drill. Customer want a quarter-inch hole!“
  • Beispiel für die Ausschöpfung des bekannten, nochmals Bosch. Versuch mit Dienstleistungen inkrementell wachsen. Nutzungsphase mit Dienstleistungen wie Ersatzteile, Modernisierungen, Reparaturen, Inspektionen, usw. Voraussetzungen sind eher der Ausbau der operativen Fähigkeiten mit diesen Dienstleistungen Geld zu verdienen, Management der Dienstleistungsorganisation. Prozesse zur Steuerung der Mitarbeiter, usw. Geringe Änderung an der Wertkonstellation im Markt für Verpackungsmaschinen. Es geht immer noch um die Qualität und Zuverlässigkeit der Verpackungsmaschinen und die Unterstützung der Qualität und Zuverlässigkeit mit Verpackungsmaschine mit Dienstleistungen.
  • Offensichtliche Ausbau des Angebots, treibt Umsatzwachstum durch Dienstleistungen Konkurrenz – Drittanbieter, ehemalige Mitarbeiter, Instandhaltungsspezialisten, Kostenstrukturen, Bilfinger Berger
  • Frage – wo sehen sehen sie spezielle Herausforderungen bei Dienstleistleistungsorientierung in China. Erklärungsansatz – Umsatz- und Gewinne bei Dienstleistungen sehr gering Verrechnungsansatz – 200 Dollar – 20 Dollar, Ersatzteilgeschäfte unter Druck, Piraten (Alternativanbieter) Tandem-Konzepte Teilbeitritt von China zur WTO) 2007 rechtliche Umstellung der Import- und Exportvorschriften. Kombiniertes verzolltes und zollfreilager
  • R&D and innovation competencies Logistic & purchasing competencies Manufacturing competencies Assembly and production skills Understanding of customer’s technical, business, and operational needs Combination of product and services into customer-specific solutions Engineering competencies R&D and innovation competencies Logistic & purchasing competencies Manufacturing competencies Assembly and production skills Engineering competencies Recognizing and dealing with service opportunities and threats Service-oriented values and behavior Service-oriented personnel recruitment, development, and compensation Service-oriented organizational structures (e.g., separate business unit for services, service innovation processes) Exploiting the sensed opportunities and fending off threats Modifying operational capabilities Over the years and responding to some criticism of the approach (see especially Priem and Butler, 2001), the RBV was developed and enriched. It started to deal (once again) more explicitly with how a firm’s external environment is influencing the process of managing resources and how a firm’s resources are transformed into value. Sirmon et al. (2007) for example recently proposed a dynamic resource management model of value creation. Bingham and Eisenhardt (2008, p. 242) contributed to the RBV by arguing that “competitive advantage stems from both the characteristics of individual resources as497 well as the linkages among the resources”. Then they apply the VRIN criteria basically to the combinations of resources and especially see inimitability as the key criterion for gaining competitive advantage. Instead, dynamic capabilities or “the firm’s ability to integrate, build and reconfigure internal and external competencies to address rapidly changing environments” (Teece et al., 1997, p. 516) are seen as key and perceived as the cornerstone of competitive advantage. Dynamic capabilities (still following Teece et al., 1997, pp. 518-24) are based upon highly firm-specific managerial and organizational processes (or routines) and are shaped to a considerable degree by its specific asset position (current specif Teece has recently developed the dynamic capability framework considerably in another landmark study (2007 and included in 2009). Here, he more deliberately attempts to weave an “umbrella framework that highlights the most critical capabilities needed to sustain the evolutionary and entrepreneurial fitness of the business enterprise” (Teece, 2007, p. 1322). He proposes three categories of dynamic capabilities that he sees as most critical for sustaining evolutionary and entrepreneurial fitness [10], i.e. the capacity to sense and shape opportunities and threats, to seize opportunities and dynamic capabilities to maintain competitiveness through enhancing, combining, protecting and, when necessary reconfiguring the business enterprise’s intangible and tangible assets (Teece, 2007, p. 1319). “ the capability of an organization to perform a coordinated set of tasks utilizing organizational resources, for the purpose of achieving a particular end result”. They stress that “dynamic capabilities do not directly affect output for the firm in which they reside, but indirectly contribute to the output of the firm through an impact on operational capabilities”. Winter has formulated the basic difference between zero-level and higher order capabilities nicely. He refers to the first as “how we earn a living now capabilities” and in contrast, the others as “capabilities that would change the product, the production process, the scale, or the customers (markets) served” (p. 992).
  • Coding content Factor analyis –producing interpretable factors Submitted it multidimesional scales. Procedure -
  • Company failure is caused by the side effects of the SDL. I call it the dark side. Star wars – Darkvader or dark side becomes evident by considering innovators dilemma. Explains why big companies fail. It is about disruptive innovation / technology. Technology is business approaches. Disruptive business innovation. Causes to close to the customers. Now, let‘s consider the two of the holy ten premises of SDL. The customer is always the co-creator of value. Firms are resource integrators. Considering these fundamental premises, from the Innovators dilemma. Customers guiding R&D resources. SDL can create a strategic exposure to a disruptive change. SDL makes companies vulnarable for disruptive changes. Company Wetrok – SDL can create a strategic risk, empore of good-dominat firms can strike back. Don‘t get me wrong here-
  • Solution is disaggregated.

Service business development in manufacturing companies Service business development in manufacturing companies Presentation Transcript

  • Service Business Development in ManufacturingCompaniesHeiko GebauerAssociate ProfessorDepartment Innovation Research in Utility Sectors - Eawag: SwissFederal Institute of Aquatic Science and TechnologyUniversity of St.Gallen (Switzerland)Karlstad University (Sweden)
  • Research activities @Competence Center of Managing industrial services• Vision: Assisting manufacturingcompanies in the service businessdevelopment• Time: 1996 to 2010• Research approach: engagedscholarship, focus groups, benchmarkingprojects, and surveys• Research partners: approximately 350SMEs and MNEs in Switzerland, South ofGermany and Northern Italy, internationalfirms• Industries: Manufacturing, utilities,consultancies, and others• Topics: “Everything, but nothing twice”University of St. GallenInstitute of Technology Management(Operations Management)
  • Company examples
  • Agenda1) Key challenges in the service business development2) Future research fields (work in progress)
  • Theoretical perspectivesService business development relates to various theoreticalperspectives−Transition from product manufacturers to services providers−Moving downstream towards services−Servitization in the manufacturing sector−Capital equipment manufactures moving towards high-value solutions−Product-service-systems−Solution providers−Service infusion or growing for service solutions−Hybrid offeringsSelected references: Wise and Baumgartner, 1998; Davies (2004), Vandermerwe and Rada, 1988, Oliva and Kallenberg (2003), Mathyssensand Vandendempt (1998 and 2008), Neely (2008), Brown, Gustafsson, Witell, 2009
  • Service business development (1)Investments into the service businessService paradoxAd-hoc servicesupportLowValuecontributionthroughservicesMaintenance contractsPerformance-basedBusiness consultingIntegration servicesHigh
  • Service business development (2)ProductmanufacturersManufacturingcapabilitiesCombinations of products and servicesIntegration capabilitiesService capabilities ManufacturingcapabilitiesOperationalcapabilitiesDynamiccapabilitiesAdapted from Teece et al. (1997), Teece, (2007) Stefano et al. (2010Individual skillsSensing Seizing ReconfiguringOrganizational routines(management innovations)
  • Cognitive phenomena limiting individual skills• Overemphasize tangible and obvious elements• Disbelief in economic opportunities• Risk aversion for compete with customers• Fundamental attribution error (pushing people,instead of setting up structures)• Aggressive goalsSource: Ross, 1974; Gebauer and Friedli, 2004; Gebauer 2009Source: Ocasio, 1997Cognitive phenomenaAttention-based theory ofthe firm
  • Management innovation drives servicebusiness developmentSensing routines(n=7)•Down-stream-analysis•Utility maps•Service scenarios•..Seizing routines(n=5)•Strategy guide andhandbook•Service portfoliomanagement•...Reconfiguring routines(n=7)•Cost-accounting systems•Service innovationprocess•PerformancemeasurementManagementinnovations facilitatingthe sensing phase•Characteristics•Utilization process•Change agentManagementinnovations facilitatingthe seizing phase•Characteristics•Utilization process•Change agentManagementinnovations facilitatingthe reconfiguring phase•Characteristics•Utilization process•Change agentSource: Gebauer (2011)
  • Service business development (2)ProductmanufacturersManufacturingcapabilitiesCombinations of products and servicesIntegration capabilitiesService capabilities ManufacturingcapabilitiesOperationalcapabilitiesDynamiccapabilitiesAdapted from Teece et al. (1997), Teece, (2007) Stefano et al. (2010Organizational routines(management innovations)Individual skillsSensing Seizing Reconfiguring
  • Exploitation or exploration: How toapproach the service business development?Adapted from Sawhney, 2004ReconfigurationExtensionHow do serviceopportunitiesappear?)Primary customeractivitiesWhere do service opportunities appear?Supplementarycustomer activitiesSalesPre-Sales After-sales
  • Exploitation or exploration: How toapproach the service business development?Adapted from Sawhney, 2004, Fischer, Gebauer, Guanjie, Gregory and Fleisch(2010)ReconfigurationExtensionHow do serviceopportunitiesappear?)Primary customeractivitiesWhere do service opportunities appear?Supplementarycustomer activitiesSalesPre-Sales After-salesExploration•Radical improvement•New value constellation•Dynamic capabilitiesExploitation•Incremental improvements•Value-adding to existing value constellation•Development of operational capabilities
  • Parameter ExplorationExampleOrganisationaladaptationRadicalAntecedents Dynamic capabilitiesValue constellationCreation of a new valueconstellationValue contributionShort-term, significantincrease in service revenueExploration of uncontested service marketsExample - HiltiExplorationFischer, Gebauer, Ren, Gregory & Fleisch, 2010
  • Innovation and dynamic capabilities at HiltiFleet management in thecar industryFleet management fortoolsTurn key solutions inpower plant industryTurn key solutions forphotovoltaic panelsSensing, seizing, andreconfiguringSource: hilti
  • Exploitation of existing service marketsExample – Bosch PackagingFischer, Gebauer, Ren, Gregory & Fleisch, 2010ExploitationParameter ExploitationExampleOrganisationalchangeIncrementalAntecedents Operational capabilitiesValue constellationImproving existing valueconstellationValue contributionLong-term, continuousincrease in service revenue(15 to 30% in 10 years)
  • Extension of the service business atBosch PackagingProducts to services Revenue shares− Spare and wear parts,field services andmodernizations− Service level agreements,extended warranty, and spareparts packages− Services for competitor products,operational and outsourcing servicesServicesRevenue Market share forservicesCustomersThird-party serviceproviders45%30%25%Machines andsystems66%34%Hänggi, 2006
  • Service orientation in the operational capabilities¹A – abstract value of services, B – role understanding, C – personnel recruiting, D –training, E – compensation, F – distinction product and service organization, G –proximityto customersOperational capabilities for service strategiesrelated to the exploitation approach (1)After-salesservice providersCustomer supportservice providersDevelopment partnersOutsourcing partnersLegend (0 – low, 1 – high – cluster means)¹Source: Gebauer, Gustafsson, Edvardsson and Witell (2010), Neu and Brown (2005 and 2008)
  • Operational capabilities for service strategiesrelated to the exploitation approach (2)Service differentiationService revenue Service profitabilityBased on Fischer, Gebauer, and Fleisch (2012)
  • Structural equation model on the role of servicedifferentiation (1)Complexity ofcustomer needsCustomercentricityInnovativenessBusinessperformanceH3 (+)ServicedifferentiationH4 (+)H2 (+)H1 (+)H5 (-) H6 (+)H7 (-) H8 (+)Based on Gebauer, Gustafsson, and Witell (2011)
  • Structural equation model on the role of servicedifferentiation (2)Complexity ofcustomer needsCustomercentricityInnovativenessBusinessperformanceH3 (+) ✔ServicedifferentiationH4 (+) ✔H2 (+) ✔H1 (+) ✔H5 (-) ✔ H6 (+) ✔H7 (-) ✔ H8 (+) ✔Based on Gebauer, Gustafsson, and Witell (2011)
  • Stuck in the middle between product andservice orientationComplexity ofcustomer needsCustomercentricityH3 (+)H2 (+)H1 (+)H5 (-) H6 (+)H7 (-)H4 (+)InnovativenessServicedifferentiationH8 (+)BusinessperformanceService differentiationImpact of innovationon businessperformanceBased on Gebauer, Gustafsson, and Witell (2011)
  • China as an important aspect of serviceorientation• China today / future most important single market• Contribution of services is very little• Challenges– Chinese culture (Guanxi, Mianzi, Renqin) hinders serviceorientation– Customers consider services as „free“ and add-ons– Insufficient quality in the basics for earned a livingthrough services (spare parts logistics)• Solutions:– Adaptation of human resource management to culturalcharacteristics– State-of-the art logistics solution (bonded / non-bondedwarehouse) and logistic processes (temporary borrowing,post-custom clearance)Gebauer, Kuzca & Wang, 2011; Kuzca and Gebauer,2011
  • Service blueprint of an innovative logisticsolutions for the Chinese marketIdea of the logistic solutionDetailed blue printExisting solutions• Exporting parts (Europe>China)• Stocking parts in China• New solutions– State-of-the art logistics solution(bonded / non-bonded warehouse)and logistic processes (temporaryborrowing, post-custom clearance)– Adaptation of human resourcemanagement to culturalcharacteristics
  • First summary• Key challenges• Cognitive phenomena limiting individual skills• Management innovation drives service business development• Balancing exploration and exploitation approaches• Strategies for moving along with the exploitation approach• Service differentiation as an integral part of customer centricityand innovativeness• Innovative solutions for Asian markets• Future research opportunities (work in progress)
  • Service business development (2)ProductmanufacturersManufacturingcapabilitiesCombinations of products and servicesIntegration capabilitiesService capabilities ManufacturingcapabilitiesOperationalcapabilitiesDynamiccapabilitiesAdapted from Teece et al. (1997), Teece, (2007) Stefano et al. (2010Organizational routines(management innovations)Individual skillsSensing Seizing Reconfiguring
  • MDS of the co-citation analysisSuppliers CustomersHighly operational (micro-perspective)Highly strategic (macro-perspective)CompanyResult of multidimensional scaling of the existing contributions (n=127)Work in progress
  • Suppliers CustomersHighly operationalHighly strategicCompanyMultidimensional ScalingCohen, M., Agrawal, N. andAgrawal, V. (2006), ‘Winningin the aftermarket’, HarvardBusiness Review 84 (5),129-38.Cohen, M., Agrawal, N. andAgrawal, V. (2006), ‘Winningin the aftermarket’, HarvardBusiness Review 84 (5),129-38.Windahl, C. and Lakemond, E. (2010).‘Integrated solutions from a service-centered perspective: Applicability andlimitations in the capital goodsindustry’, Industrial MarketingManagement 39 (8): 1278-90.Windahl, C. and Lakemond, E. (2010).‘Integrated solutions from a service-centered perspective: Applicability andlimitations in the capital goodsindustry’, Industrial MarketingManagement 39 (8): 1278-90.Tuli, K.R., Kohli, A.K. and Bharadwaj,S.G. (2007). ‘Rethinking customersolutions: from product bundles torelational processes’, Journal ofMarketing 71 (3): 1-17.Tuli, K.R., Kohli, A.K. and Bharadwaj,S.G. (2007). ‘Rethinking customersolutions: from product bundles torelational processes’, Journal ofMarketing 71 (3): 1-17.Kowalkowski C, et al, Service infusionas agile incrementalism in action, JBus Res (2011), doi:10.1016/j.jbusres.2010.12.014Kowalkowski C, et al, Service infusionas agile incrementalism in action, JBus Res (2011), doi:10.1016/j.jbusres.2010.12.014Davies, A., Brady, T. and Hobday,M. (2007). ‘Organizing forsolutions: systems seller vs.systems integrator’, IndustrialMarketing Management 36 (2):183−193.Davies, A., Brady, T. and Hobday,M. (2007). ‘Organizing forsolutions: systems seller vs.systems integrator’, IndustrialMarketing Management 36 (2):183−193.Examples
  • Results of the co-citation analysisFuture empirical fieldsa) Strategic decisions such as merger & acquisitionsb) Unit of analysis could be network perspective andinternational business structuresTheoretical considerationsc) Christensen‘s Innovators dilemma, boundary of the firm,and industry dynamic
  • a) Example for merger & acquisitionsMilestones Merger & acquisitions• Employers Reinsurance Corp.• Decimus (computer leasing)• Polaris (aircraft leasing)• Genstar (container leasing)• Gelco (portable building leasing)• Penske Leasing (truck leasing)• Financial Guaranty Insurance Co.• Burton Group Financial Services• Travelers Mortgage (mortgage services)• Chase Manhattan Leasing• Itel Containers (container leasing)In million US dollarGeneral ElectricBartlett & Wozny (1999)
  • c) Examples for alternative theoreticalapproaches (1)PerformanceTimeHighLowChristensen‘s Innovators dilemma
  • 3) Examples for alternative theoreticalapproaches (2)Founding of Voith IndustrialservicesAcquisition of Hörmann (technical servicespecialists for the automotive industry)Acquisition of Premier Group(technical services for theautomotive industry)Acquisition of SIS Scandinavian industrialservices (technical services for Chemical &petro chemical industryAcquisition of the Ermo-Group (technical services forthe petro chemical industry and power plantsAcquisition of DIW (German Industrial Maintenance) (technicalservices for industrial equipment (partly and full)Acquisition of CeBe Network (engineeringservices)2001 2004 2007 2010Since October 2010 the businessof all acquired companiescontinued under the name of VoithIndustrial ServicesYearsCombiningService specialistProductServicesBoundary of the firm
  • Second summary• Key challenges• Cognitive phenomena limiting individual skills• Management innovation drives service business development• Balancing exploration and exploitation approaches• Strategies for moving along with the exploitation approach• Service differentiation as an integral part of customer centricityand innovativeness• Innovative solutions for Asian markets• Future research opportunities• New empirical fields are about M&E activities• Theoretical perspectives should be extended
  • Thank you very much for your attentionIf you have any further questions, pleasecontact me:heiko.gebauer@eawag.ch
  • Thank you very much for your attentionInformation