Service addition as business market strategy: identification of transition trajectories

The purpose of this paper is to show how manufacturers evolve when aiming at increasing customer value via the service addition path. More specifically, it aims to identify drivers and inhibitors as well as trajectories to reach “ideal” service addition types.

This paper employs a multiple case study design. In total 12 in‐depth interviews were conducted with managers from machine building manufacturers resulting in five longitudinal case studies of “best practice” companies. The paper is grounded in the “integrated solutions” research paradigm.

Four types of service addition can be identified based on this multiple case study. Diverse drivers push companies to higher degrees of customization and to less tangible offerings via different trajectories. On these trajectories, though, they are likely to encounter inhibitors.

The qualitative nature of this paper acts as a basis for future research efforts. On the one hand this paper has traditional shortcomings typical of interpretive studies. On the other, future research is stimulated as the exploratory but rich and longitudinal findings suggest further testing and development.

A strategy of service addition is frequently used by industrial companies to seek customer value and escape price pressure. This paper offers a framework that helps managers chose from the potential set of service addition types. The paper also identifies difficulties (the so‐called “inhibitors”) companies might encounter when pursuing this strategy.

The rich case‐based methodology enables the development of a preliminary model that identifies types of service addition and corresponding transition trajectories. The paper adds to the emergent “theory on service business for manufacturing firms” by offering a typology and an industry‐specific view on drivers and inhibitors of service addition along the different transition trajectories.