Abstract

Servitization of manufacturing companies - i.e. the integrated offering of product and services - appears both as a more and more relevant component of the present service-dominated economies, and as a growing strategy evolution for manufacturing companies. A strategic model illustrates four types/levels of servitization strategy. Management research shows that servitization means no automatic success as a dangerous service paradox can emerge (i.e. adding services increases the company turnover but reduces profitability). This is due to the difficulties manufacturing companies must overcome to make such a move a strategic and economic success. Difficulties include: the intrinsic diversity between service and product whereas they both have to be bundled into a strictly coordinated management, the strong strategic potential of servitization which pushes companies towards more demanding strategy levels, the need to adopt a business model which differentiates in many features from the manufacturing company. A new paradigm, mixing manufacturing and servicing profiles, could be of help.