Context matters: how internal and external factors impact servitization

Abstract

The study investigates how internal and external context factors impact a manufacturer’s servitization process (i.e. the strategic transformation from competing through products towards competing through services). A theoretical framework was developed that integrates a multi-stage conceptualisation of servitization with a focus on the wide range of internal and external context factors that support or oppose the transformation. The study draws on the collective experiences of 25 senior executives from 17 servitizing small- and medium-sized manufacturers, using a focus group-based enquiry method. The findings recognise servitization as a multi-stage transformation process with each stage being exposed to different context factors. The findings identify a wide range of context factors and show how their specific impact varies depending on the manufacturer’s servitization stage. Several theoretical and practical implications are provided.