Servitization strategy and managerial control

In recent years, pressures on manufacturers’ value chains have driven many of these organizations to differentiate themselves by offering services and solutions delivered with or in association with their products. This strategy is called “servitization” and these new business models are based on the Product-Service-System (PSS). There are several reasons why manufacturing firms have placed a strategic emphasis on services: the product-service strategies can provide financial opportunities, strategic opportunities or marketing opportunities. However, several recent studies have showed that servitized firms sometimes generate higher revenues but deliver lower profits than strictly manufacturing firms. Managerial control systems, especially strategic cost management mechanisms, may help servitized firms in selecting, monitoring and managing the drivers of PSS strategy profitability. This book, through both a theoretical and an empirical approach and based on the in-depth analysis of several case studies, presents and discusses the main challenges that companies interested in servitization strategies have to overcome, with a particular focus on the design of managerial control systems. This volume is a useful tool for those companies interested in the development of successful servitization strategies and for scholars involved in research on innovative business models. In particular, it is of interest to top and middle management in charge of strategic and organizational issues, as well as managers in organizational units such as supply chain, logistics, production, after-sales and service, R&D, strategic planning and managerial control.