Towards development a PSS business evaluation: proposal of internal and external analysis for sevitizing manufacturers

Abstract

Servitization has become a primary goal for many manufacturers who seek new competitive advantage. The adoption of strategic management theories in servitization mainly proposed strategies or capabilities required to successfully accomplish the service transition. However, the inclusion of the manufacturing context (current internal capabilities and external forces) in strategy formulation for servitization process is rare, while the journey towards service can be logically different among each other. As a first step in developing a product-service system (PSS) business evaluation and strategy formulation, this paper reviews the existing internal and external analysis in strategic management theories and proposes an internal and external analysis for servitizing manufacturers. The proposed tool is the extent of original SWOT analysis with the adaptation of key capabilities of the servitized company and the Business Model Environment framework to generate structured evaluation questions for internal and external analysis respectively. The original SWOT analysis is modified to be more structured and quantified as a mean to avoid fuzzy discussion and unfocused direction. This tool enables the comparison of manufacturer’s current business to the desirable capabilities of the servitized company, hence future strategies can be targeted to improve the shortcoming capabilities of servitization.