Ghosts from the Past: Path-dependent Effects om Servitization

Max Finne, Saara Brax, Mari Tanskanen

Research output: Chapter in Book/Report/Conference proceedingChapterScientificpeer-review

Abstract

This paper focuses on analysing the causes of challenges companies encounter when trying to servitise. We present a comparative case study of an investment goods manufacturer and a financial solutions provider aiming to broaden their technology-based offerings with value-added services. The literature has described difficulties related to servitisation, but their causes have not been fully explained. Our empirical research on the companies’ historical paths revealed challenges that the current servitisation literature could not explain. We utilise the path-dependence approach to identify the development patterns that led the companies to states of operational rigidities, thereby hindering the effective implementation of a servitisation strategy. Our findings show a clear resemblance between the development paths. In lock-in, however, different factors hinder adopting the alternatives. Our conclusion is that early success and very few competitive pressures can impede a service-oriented culture, which together with weakened contact with end users and the lack of established service development processes not only hinder servitisation but can cause a lock-in. Thus, we conclude that the ability of the case companies to undergo the transition depends on their historical paths that have led to focusing on efficient operations, rather than the flexibility required in servitisation. We argue that the path-dependence approach can provide crucial assistance in discovering the causes of operational rigidities, impeding companies’ abilities to servitise. Our empirical research provides the structure and an example for the execution of this kind of analysis in studies on servitisation.
Original languageEnglish
Title of host publicationStrategic Change towards Future Industrial Service Business
EditorsMiia Martinsuo, Olga Perminova-Harikoski, Taija Turunen
Place of PublicationTampere
PublisherTampere University of Technology
Pages106-123
ISBN (Electronic)978-952-15-3640-3
ISBN (Print)978-952-15-3639-7
Publication statusPublished - 2015
MoE publication typeA3 Part of a book or another research book

Keywords

  • Servitization
  • Path dependence
  • strategy
  • Longitudinal case study

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