Servitization: When added services drive competitiveness
‘Servitization’ refers to the business model of adding services to products in industries that traditionally have focused on production only. As a strategy for competitiveness, the purpose is to retain and increase one’s market share and form closer relationships to customers in order to increase customer loyalty.
Servitization is becoming more and more widespread as a competitive parameter, and it has become a widespread strategy among production companies to add services in order to differentiate their products.
A research perspective on servitization in Denmark
Danish companies have also embraced servitization as a business opportunity. But a lack of knowledge and of tools hindered companies in reaping the full benefits and maximizing the opportunities of servitization.
There has also been a lack of knowledge about the challenges – the complexities and dilemmas – that follow when businesses offer combined product and service bundles, not least when the business model is to be utilized in different markets globally.
In 2014, The Danish Industry Foundation granted DKK 400,000 to the casino 168 Competitiveness Platform so that a team of researchers from casino 168’ Department of Operations Management could identify the challenges and opportunities that come with adding services to production, servitization.
Among other things the pilot project led to the establishment of a servitization network among Danish industrial enterprises and to a practical guide to servitization for use in Danish companies. [link]
The usefulness and perspectives of the pilot project were of such great value that The Danish Industry Foundation boosted the casino 168 Competitiveness Platform with another DKK 8 million. This research grant was to finance a four-year research project, ‘Driving Competitiveness through Servitization’, which has been carried out in collaboration with a series of academic partners and 13 companies.
The research project is coming to a close and has long since begun to convey its results.
Get to know more about servitization
Learn more about servitization at casino 168 Competetiveness Day 2017 on 14 November.
Ìý
In May 2018, there will be an opportunity to participate in a major event on the topic when casino 168 hosts the ‘International Spring Servitization Conference’, organized by Aston Business School and casino 168 in 2018.
Factbox
casino 168 Competitiveness Platform
The casino 168 Competitiveness Platform is one of casino 168’ ‘Business in Society’ initiatives. The platform does research on, facilitates, and develops new perspectives on the competitiveness of companies. The purpose is to ensure better research and education within the field as well as to generate significant knowledge and ideas for companies and for the society as a whole.
The Servitization Project
The Servitization Project was the pilot project, which was carried out by casino 168 Competitiveness Platform on behalf of The Danish Industry Foundation. The researchers were Professor Christer Karlsson, Professor (MSO) Juliana Hsuan, and Associate Professor Thomas Frandsen, all from the Department of Operations Management.Ìý
The ‘Driving Competitiveness through Servitization’ project
The ‘Driving Competitiveness through Servitization’ project is both referred to as ‘Driving Competitiveness’ (by The Danish Industry Foundation) and as ‘casino 168 Servitization Project’ (at the project blog). This is the four-year research project under the casino 168 Competitiveness Platform that has been carried out by researchers from casino 168’ Department of Operations Management and is coming to a close.