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In many business markets, manufacturers seek service-led growth to secure their existing positions and continue to grow in increasingly competitive environments. Using longitudinal data from 513 German mechanical engineering companies and latent growth curve modeling, this study offers a fine-grained view of the financial performance implications o...
Contexts in source publication
Context 1
... empirical research is still nascent and focused on two issues: (1) the effect of industrial service strategies on firm performance and (2) the identification of variables that moderate the effect of industrial service strategies on firm performance. Regarding the effect of industrial service strategies, empirical studies tend to emphasize positive outcomes (see Table 1), such as the positive effects on relative product sales (e.g., Antioco et al. 2008), service profitability (Homburg, Fassnacht, and Guenther 2003), and overall profitability (Gebauer 2007). How- ever, in their analysis of the link between service revenue share and firm value, Fang, Palmatier, and Steenkamp (2008) confirm that industrial service strategies can also have negative effects, such as decreasing firm value at the beginning of the service tran- sition. ...
Context 2
... variables positively moderate the link between industrial services and firm performance. Management commitment to the service business and cross-functional commu- nication between the service division and other departments fos- ter positive effects of industrial service offerings too ( Antioco et al. 2008), as we summarize in Table 1. This review reveals two main gaps. ...
Citations
... In the literature, servitization is perceived in two ways: (1) as a tool to improve customer loyalty and raise profits [20], or (2) as a process decoupling customer satisfaction from resource consumption [21]. Moreover, different terms used to characterize servitization include the transition from product to service, the product-service system, service infusion, and hybrid offerings [22]. ...
This study presents an analysis of the relationship between the servitization process and energy sustainability in the years 2015–2020. The research refers to 164 selected countries, also divided into two regimes: developed and developing. The transformation of the manufacturing process, and as a result, the economy’s structure, towards servitization, is observed in most countries worldwide. The positive influence of the servitization of production by individual manufacturers on sustainability is widely known. In this research, this relationship is considered on a macroeconomic scale, which is one of the novelties of the study. Particularly, sustainability in the energy sector, indicated as an achievement of the 7th goal of Sustainable Development, is discussed. Energy sustainability is evaluated using a synthetic measure by Perkal. This part of the research shows the problem of the low level of energy sustainability in developing countries (particularly in Africa) compared with developed ones. Moreover, spatio-temporal sensitivity models are estimated and verified. The sensitivity parameter in these models shows the impact of the progress in the servitization process on energy sustainability. The models have been enriched with the effects of spatial dependence between countries, taking into account two types of proximity matrices based on (1) the common border criterion and (2) the similarity of the development levels measured by the Human Development Index. Additionally, the differences in sensitivity between developed and developing countries are considered. The results of the study show that in both cases, the economic servitization positively influences energy sustainability, but the strength of the relationship is stronger in the group of developed countries. This can be, for example, the result of the individual characteristics of the given countries, where African countries mainly benefit from agricultural development. Only after reaching a certain level of economic growth will they be able to obtain sustainability faster through economic servitization.
... Furthermore, manufacturers offering customer-oriented services tend to develop closer contact with customers, which can prompt greater customer satisfaction and create loyalty effects, thus fostering customer retention (Antioco et al., 2008;Preikschas et al., 2017). For example, customer-oriented services facilitate the exploration of the customer's activity cycle, the breadth of which can directly improve revenue and profit (Eggert et al., 2014). Thus, customer-oriented services positively relate to firm performance. ...
... In line with previous research (Chaudhuri et al., 2019;Short et al., 2009), we used sales revenue as the key performance indicator for evaluating the performance of manufacturing firms. Sales revenue effectively captures the economic benefits resulting from services provided by manufacturing firms (Terho et al., 2015) and serves as a prevalent metric to portray the impact of services on firm performance (Eggert et al., 2014;Shah et al., 2020). Following Shi et al. (2017), we computed the natural logarithm of sales revenue to reduce skewness, which is a common operationalization when financial data is the dependent variable. ...
Purpose
How does business model design play a role in enabling manufacturing firms’ services? This study aims to investigate the impact of two distinct types of business model design, namely, efficiency-centered business model design (EBMD) and novelty-centered business model design (NBMD), and their effects in balanced and imbalanced configurations, on two types of services: product- and customer-oriented services.
Design/methodology/approach
Using matched survey data of 390 top managers and objective performance data of 195 Chinese manufacturing firms, this study uses hierarchical regression, polynomial regression and response surface analysis to test the hypotheses.
Findings
The results show that while EBMD positively affects product-oriented services, NBMD positively affects customer-oriented services. Both types of services exert a significant influence on firm performance. Furthermore, the degree of product- and customer-oriented services increases with an increasing effort level with a balance between EBMD and NBMD. Asymmetrical, imbalanced configuration effects reveal that the degree of product-oriented services is higher when the EBMD effort exceeds the NBMD effort, and the degree of customer-oriented services is higher when the NBMD effort exceeds the EBMD effort.
Originality/value
This study enriches the understanding of designing business models to facilitate service growth in manufacturing firms, ultimately benefiting firm performance. In addition, exploring balanced and imbalanced configurations of EBMD and NBMD offers new insights into business model dual design research.
... HD shows slight positive growth (1.6%). W currently has negative TTM EPS but is expected to turn positive in the next twelve months [6]. ...
This paper presents a detailed financial analysis and market evaluation of major players in the home improvement industryHome Depot, Lowe's, Wayfair, and Floor & Decor Holdings. It assesses these companies based on their liquidity, solvency, and profitability to provide investors with actionable insights into their financial health and market position. The analysis reveals that Wayfair, despite its robust short-term liquidity, faces challenges with profitability. Home Depot and Lowe's both demonstrate strong financial stability with efficient operations that translate sales into profit effectively, though Lowe's exhibits some concerns related to its debt levels. Floor & Decor shows impressive growth but must improve its operational efficiency to enhance profitability. Additionally, the study explores industry trends impacting these businesses, including changes in consumer preferences and economic conditions affecting spending on home improvements. It also examines the companies' responses to these trends, such as adapting their business models and strategies to sustain growth and competitiveness. The paper concludes with investment considerations, highlighting Wayfair as a potentially high-reward but risky investment due to its growth prospects and operational challenges. Home Depot remains a relatively safe bet with stable financial returns, while Lowe's and Floor & Decor might require cautious evaluation due to their financial and market positions. This comprehensive analysis serves as a crucial tool for investors aiming to navigate the complexities of the home improvement sector and make informed decisions.
... Based on the obtained complex analytical indicators, socio-economic criteria for assessing the feasibility of implementing an eco-hotel project were compiled; each criterion was assigned a weight and assessed using a 5-point system. As a result, one or more municipal areas with the highest weighted average will be recommended as the most favorable from a socio-economic point of view [12]. ...
Today, the study of environmental and economic analysis in the hospitality industry is of great importance for the industry. Global problems associated with environmental degradation require different approaches to solution. Studying the regional market is an important strategy for the development of this industry. The relevance of the study is the influence of environmentally friendly technologies in different spheres of life. Current statistical data on environmental and economic indicators were selected for analysis. The purpose of the study is to find areas in the northwestern region for the construction of a modern eco-hotel. To achieve the goal, factors influencing the ecological state of the territory and its economic components were selected. Environmental factors will include the number of large and medium-sized reservoirs in the area, the distance of the nearest point of the areas from the airport, the number of large highways, as well as the area of greenery in the area. To compare districts, a 5-point scoring system was used, depending on the quantitative and qualitative indicators of the above factors. As a result of the study, the most suitable areas for the implementation of the project according to the selected indicators were identified.
... Nevertheless, the methodology for assessing the possibility of early retirement due to personal circumstances with the function of involving real estate manipulation will allow to increase the funds of social housing in large cities and become one of the tools of renovation. Also, the proposed set of measures and analytical calculations can be used as calculations to substantiate legislative initiatives in the field of improving the pension system of the Russian Federation [12]. It should be noted that the proposed measures make it possible to create a mathematical basis for a significant change in pension legislation in the Russian Federation. ...
At the present stage of society's development, issues related to improving the environmental quality of life of the population while maintaining the level of quality in other aspects – social and economic - are becoming increasingly developed. One of the possible solutions to this problem is a potential mechanism associated with changing the place of residence of citizens to regions and territories with a more favorable ecological and social situation while reducing the level of economic burden. This mechanism can be implemented in the context of solving the problem of early retirement of citizens, taking into account compensation payments, including at the expense of existing real estate. The purpose of the study: to develop a mechanism for improving the environmental quality of life of the population in the context of solving the problem of reducing pension costs through compensation payments of citizens. Research methods: comparison, analysis and synthesis, generalization, method of retrospective analysis and forecasting of ecosystem development. As a result of the study, approaches are proposed to choose options for improving the environmental quality of life of citizens, as well as substantiating the conditions of compensation payments due to the sale of excess value of real estate objects of citizens potentially suitable for early retirement
... Businesses are typically not set up with the sole purpose of generating profits, but to serve wider society by providing goods and services to the community (Carroll & Shabana, 2010). It could be hypothesized that although profits are a necessary component of running a business, the products and services aim to serve wider benefits, and hence most firms focus on a specific industry sector to operate in (Eggert et al., 2014). Businesses can have multiple competing objectives, and managers need to prioritize between such competing objectives (Wu & Pagell, 2011). ...
The adoption of environmental practices in small and medium scale businesses is increasing. Given the diverse environmental actions available to firms, it is important to understand the specific drivers for different actions to be taken. Based on managerial survey data from Victoria, Australia, this research uses modeling to determine how ethical conscience of managers drive different types of sustainable environmental actions. The results indicate that ethical conscience of managers drives waste, energy and water related actions, while external factors such as supply chain imperatives and customer demand drive circular business actions. New technology and industry guidelines were major barriers for most types of environmental actions while social barriers were significant for energy and water related actions. This implies that the increased ethical conscience of managers, especially while adopting new technology can increase the adoption of environmental actions in businesses. The results will have implications in crafting the corporate strategy and developing good and services that will aid to the achievement of Sustainable Development Goals (SDG 11 and 12), focusing on sustainable cities and communities, and responsible production and consumption.
... Perusahaan manufaktur semakin mencari pertumbuhan yang didorong oleh layanan untuk mengamankan posisi yang ada dan memperluas pasar bisnis (Eggert et al., 2014). Perusahaan manufaktur memegang peranan penting didalam perekonomian Indonesia karena kemampuannya untuk menghasilkan produk yang dapat diperdagangkan (Silalahi, 2014). ...
The purpose of this study is to identify the variables that affect profit growth. Secondary data is the sort of data employed in this associative research method. Purposive sampling was utilized to choose the sample from the population of 67 manufacturing businesses that were listed on the Indonesia Stock Exchange for the years 2017 through 2021. Multiple linear regression on panel data and descriptive statistical analysis are the methods utilized for data analysis. The research's findings indicate that the current ratio and inventory turnover have a negative and insignificant impact on profit growth, while the total asset turnover has positive and significant effects on profit growth, and debt to equity ratio has negative and significant effects on profit growth. As both excellent and bad profit growth will directly affect a company's financial condition, it is envisaged that determining profit growth will be a key concern for any business. The consequences of inaccurately estimating profit growth will be extensive. Given that these factors have been shown to have an impact on the company's profit growth, management should pay close attention to the factors that affect profit growth, particularly determining total asset turnover,and debt to equity ratio, so that the company can determine the best possible profit growth.
... While servitization offers benefits, studies indicate that its realization can be complex for service-oriented companies, sometimes resulting in inferior financial performance compared to traditional product manufacturing (Benedettini et al., 2015;Fang et al., 2008;Neely, 2008). This study explores two paradigms: service-dominant logic, emphasizing the service industry perspective, and servitization, with a focus on the manufacturing viewpoint ( Servitization involves enhancing a company's core offerings by providing services, a strategy that attracts and retains loyal customers, ultimately leading to a sustainable competitive advantage (Fang et al., 2008;Eggert et al., 2014). This approach positively contributes to overall performance (Abou-Foul et al., 2021; Kharlamov & Parry, 2021; Vendrell-Herrero et al., 2017). ...
... To embrace servitization, industrial companies must undergo organizational changes, adapt operational processes, and modify operant resources, but these chang-es can introduce heightened process unpredictability and internal and external vulnerabilities (Zhang & Banerji, 2017;Benedettini et al., 2015). Previous servitization research has generated diverse findings, highlighting positive impacts, adverse effects, and non-linear relationships (Eggert et al., 2014;Neely, 2008;Fang et al., 2008;Visnjic et al., 2019). These varied results underscore the need for additional research to delve into specific service types and contextual elements, including integration with supply chain partners, that shape the intricate relationship between servitization and firm performance, as Dmitrijeva et al. (2020) emphasized. ...
... In transitioning to servitization, manufacturing companies enhance their core product offerings by introducing additional service components (Axelsson & Gunnarsson, 2019 (Eggert et al., 2014;Neely, 2008). Following the approach suggested by Sousa and da Silveira (2019), servitization is classified based on the type of service provided by the manufacturer, which includes product-centered services (referred to as BAS -basic services) and customer-oriented services (referred to as ADS -advanced services). ...
This study aims to investigate factors influencing servitization and firm performance within Indonesian national manufacturing companies, focusing on export-oriented entities such as automotive, electronics, textile, and food processing industries. Strategic orientations – market, technology, service, and learning – are investigated as key dimensions guiding firms’ strategic decisions amidst dynamic business environments. A comprehensive survey involving 100 companies representing a diverse spectrum of the Indonesian manufacturing sector is conducted. These companies encompass a range of statuses, including joint ventures (12%), multinational companies (2%), and national companies (86%). Through a purposive sampling strategy, representation across different company types is ensured to capture the breadth of perspectives within the industry. The quantitative approach involves surveying managers across various organizational levels, including top-level executives, middle managers, and front-line supervisors. Input from different managerial tiers is solicited to understand strategic orientations and their impact on firm performance. Data analysis, employing validation, descriptive statistics in MS Excel, and inferential statistics using Smart PLS yields significant insights. Market, service, and learning orientations emerge as influential factors in both basic and advanced services (p < 0.05), while technology orientation lacks statistical significance. Notably, market orientation significantly impacts advanced services (p < 0.05). Furthermore, the findings underscore the significant influence of service provision on firm performance across both basic and advanced services (p < 0.05). The critical role of strategic orientations, encompassing technology adoption, market positioning, service delivery, and organizational learning, in driving servitization and enhancing firm performance in Indonesian manufacturing is emphasized.
... Managing a diversified range of offerings is therefore gaining importance in B2B industries. [1,10,11] Manufacturing companies such as Jungheinrich [12], Trumpf [13], and Heidelberger Druckmaschinen [14] have recognized a growing 2 need for service orientation, also known as servitization [15], as a strategic response to this challenge [16][17][18]. This development is further accelerated by digitalization, which not only opens up additional revenue opportunities [19] through data-based services [14,20] but also promises growing market shares [21,22]. ...
... (www.preprints.org) | NOT PEER-REVIEWED | Posted: 18 March 2024 doi:10.20944/preprints202403.1057.v118 ...
Business-to-business (B2B) manufacturing companies are increasingly confronted with transformative trends such as sustainability, digitalization, and servitization. These trends are changing how product portfolios are developed, and value contributions are assessed, and therefore have disruptive potential. Dealing with these disruptive factors in Product Portfolio Management (PPM) is a largely unexplored topic. This study presents an empirical-qualitative exploration that contributes significantly to the field. The aim is to clarify the extent to which disruptive factors influence the evaluation and shaping of the product portfolio in B2B manufacturing companies. The Gioia method was used to evaluate 21 semi-structured interviews with experts from leading B2B manufacturing companies. Eight overarching challenges in PPM resulting from the disruptive factors were identified. Based on the eight overarching challenges and their associated causal relationships, two aggregated dimensions of action were derived: (1) increasing speed and flexibility by using generative artificial intelligence (AI) in a defined PPM process and (2) adjusting the product portfolio evaluation to consider various strategic drivers. These two dimensions of action call for future research to overcome the disruptive factors in PPM.
... To enhance market influence, major manufacturers have been increasing their investment in research and development (R&D) in an effort to differentiate themselves in the market through serious product homogenization and the expansion of their market share. However, the correlation between servitization and product technology innovation cannot be explained by complementarity alone; due to resource competition, product innovation in many contexts consumes corporate resources and can exert a negative impact on servitization [46]. Excessive investment in service-oriented businesses can cause a "squeeze-out effect" on product innovation and R&D, and the failure to produce products that meet the demands of the market and are welcomed by consumers can negatively affect enterprise performance. ...
The global manufacturing landscape is undergoing a profound shift, and the paradigm of service-led industrial evolution has taken on paramount importance. Service-oriented manufacturing has emerged as a pivotal conduit for the transformation and elevation of China’s sporting goods manufacturing sector. However, we acknowledge that the current state of service-oriented transformation in this sector is still in an embryonic phase. The nuanced interplay between the level of servitization and its consequent impact on corporate performance, along with the intricate forms of interference exerted by various factors in the process of servitization, are shrouded in ambiguity. This article, which is predicated upon the financial disclosures of China’s sporting goods manufacturing enterprises listed on the A-share and New Third Board markets, presents a rigorous investigation. Through the construction of an imbalanced panel dataset covering the period of 2007 to 2022, we embark on an empirical journey examining the intricacies of a moderated mediation model to ascertain the mechanisms underlying the influence of servitization on the performance of sporting goods manufacturing entities. Through this research, we unearth a compelling revelation: (1) Within the cohort of sampled enterprises, an elevation of servitization evokes a modest suppressive effect on corporate performance, thus resulting in the enigmatic "servitization paradox." (2) A total of 29.1% of the servitization impact on enterprise performance is achieved through marketing intensity; that is, there is a partial mediating effect of marketing intensity on the relationship between servitization and enterprise performance. (3) Market power play a negative regulatory role in this relationship, which drives the servitization paradox in sporting goods manufacturing but can also promote the positive impact of servitization on marketing intensity. In addition, with the expansion of market power, corporate servitization does not need to impact corporate performance through marketing activities. (4) R&D intensity negatively affects the relationship between marketing intensity and corporate performance, promotes the inhibitory effect of marketing intensity on corporate performance, and aggravates the inhibitory effect of servitization on corporate performance through marketing intensity.