Servitization in the Manufacturing Industry: Where Do We Stand? Where Do We Come From?

Manufacturers are increasingly shifting their strategic focus from products to services to create customer value and defend a competitive edge in the marketplace. The transition process from product- to service-centric logic is referred to as servitization. Despite a large and growing body of academic literature, we are missing a descriptive view on the current state and the varying transition trajectories towards servitization in manufacturing industries. Against this backdrop, we provide a comprehensive empirical analysis of the servitization process in the U.S. manufacturing industry over the last 10 years. Using a unique panel dataset of 1,381 U.S. manufacturers, we draw a pronounced picture of firms’ servitization trajectories. Our descriptive results establish servitization as an ongoing trend in several sectors of the manufacturing industry. The commercial machinery and electronic equipment sectors put the strongest emphasis on services, while services play only a minor role in the chemical products sector. Moreover, we distinguish different service types and reveal their specific role in the servitization process. Product-oriented services, such as maintenance and repair services, have reached a high yet saturated level of strategic importance; customer-oriented services, such as systems and solutions, have become the major focus of the ongoing servitization process. A fine-grained analysis reveals considerable differences between large and medium-sized enterprises. These insights help managers to benchmark and improve their servitization strategy.