Exploring servitization in China

Abstract

PurposePrevious research has predominately focused on the servitization strategies of western manufacturers in advanced economies, neglecting the potential for servitization in those which are emerging, such as China. The purpose of this paper is to explore the role of the external service partner network of a European manufacturer providing services in China, in order to develop a better understanding of the resulting and associated challenges.Design/methodology/approachAn in-depth case study approach was used to examine the parent company, its subsidiary in China and the related service partner network. Data collection involved all three actors and took place in Denmark and China.FindingsThe findings suggest that motivation, opportunity and ability (MOA) need not only be mutually reinforcing for the organization attempting to move toward services but also aligned between organizational units, as well as with the service partner network. Furthermore, the findings suggest that while service partners are typically closer to the market, they may not be able to deliver the higher value-added services requiring customization.Research limitations/implicationsThis study is limited to a single manufacturer attempting servitization in China. Future studies may consider other case firms in other markets.Practical implicationsThe MOA framework provides a basis for understanding the managerial challenges of aligning and coordinating the MOA elements amongst different actors.Originality/valueThis paper contributes by exploring servitization in an emerging market through the MOA framework in order to better understand the challenges and complexities. Servitization is found to be a dynamic phenomenon which should be understood as a movement that is also dependent on an external service partner possessing the necessary capabilities. In turn, this requires understanding the MOAs of all actors in a network and how they may be influenced in order for the MOA elements to be mutually reinforcing.