Manufacturing organizations transforming into service providers: Discovering and relating changes in business model and organizational structure

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This research aims to 1) describe what kind of changes in business model and organizational structure appear when traditional manufacturing organizations adopt a servitization-strategy and 2) describe how these changes in business model and organizational structure relate to each other. To do this we first build a theoretical framework in which the concept of servitization, the concept of a business model and the concept of organizational design are explained and related to each other. This research is theory-oriented, qualitative in nature and includes descriptive knowledge. Results were derived from the analyses of interviews held with several organizations engaged in the servitization trend. With regard to business model changes the following was found: An increased focus on 1) creating customer intimacy, 2) offering more complete packages and 3) unburdening the customer, an increased importance of the dealer, a different and stronger customer, a more intense relationship with both customers and dealers, a revenue model directed at service fees rather than product sales, software becoming a key resource, a changed role of human capital, the offering of more advanced services, a larger need for collaboration and finally a more value driven cost structure. With regard to changes in organizational structure the following changes were identified: A growth of the service (units), an increased integration of the service departments into product development processes, growth by acquisitions, centralization and geographical dispersion. With regard to the relationship between these changes the following was found: The changes in business model and the changes in organizational structure are very much interrelated and complement each other. Customer driven changes in the value propositions of organizations are central here as they shape both other changes in the business model as well as changes in the organizational structure. The above described findings contribute to the academic field by 1) describing what kind of changes occur after the adoption of a servitization strategy and 2) by showing how these changes relate to each other.
Faculteit der Managementwetenschappen