How Firms gain Competitive Advantage through Servitization Concept. This concept is more famous specially in developed countries like U.S. Servitization is actually bundle of product and services that provide the best solution of customer need/problem. Choice of Suitable services are important here.

1. Competitive Advantage Through
SERVITIZATION
By Manufacturing Companies

2. SERVITIZATION
“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.“

3. SERVITIZATION

4.  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.

5. A Servitized firm
SIEMENS
Siemens is committed to
providing outstanding customer
service for the lifetime of your
appliance.
BUT HOW??

6. SIEMENS
 Arrange an engineer visit
•Replacement
spare parts &
accessories
 Product advice

7. SIEMENS
 Instruction manuals
 Dishwasher repair action

8. SERVITIZATION
“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..“

9. “Selling product-----------selling
product-service system”

10. SERVITIZATION
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.

11. It goes in a way…

12. Traditional Concept
 focused on “Product”.
 put their efforts on
 back - end- units
 cost reduction
 product innovation

13. BUT…
 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.

14. In Case Of Manufacturing
 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

15. Transformation to
SERVITIZATION
•Significant transformation from
“back end” to “front end” activities.
•Customer-facing front end units are
established to engage directly with
customers

16. Main Drivers
 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?”

17. Now Manufacturers are of the view…
 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.

18. Shifting the
Traditional Mind-Set
•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 seek.

19. Concluding …
•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.