Abstract

Manufacturers have started to adopt service as their offering mix in order to overcome slow growth, declining profitability and commoditization in the pure product market. Several companies like IBM and GE have shown that services would be a new source of revenue and a steady growth. Service covers a wide spectrum from a simple add-on service like repair to complex outsourcing service. Service adoption is a challenge for manufacturers who have been accustomed to product making and selling. Making, proposing, delivering and evaluating services needs a different and new capabilities for manufacturers. And service transition is closely related with capabilities which make a transition with a less risk. In this paper, a taxonomy of efforts is developed which build on the service transition literatures and cases. We provide a phased service transition strategy for manufacturers and service capabilities needed at each phases.

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