An increasing number of industrial manufacturing companies have made the transition to
offer solutions, that include both its products and services for their customers rather than
the products itself. Service is considered a lasting source of competitive advantage due to
the difficulty to imitate by competitors. Today the field Service is a part of the
aftermarket as companies traditionally offer them as a complement to their product. It is
regarded to be difficult to manage, a necessary evil and despite investing a large amount
of resources into it there are few that fully grasps its potential. Failing to manage the
aftermarket and service is not only an economic risk, but it also risks worsening the
relationship between the company and its customers. One reason the aftermarket is so
difficult to manage is due to customers value services differently, thus complicate the
definition of value. The different characteristics of products and services are contributing
factors to why companies have difficulties to interpret and supply value to its customers.
The concept of Servitization is the transformation that traditional manufacturing
companies undergo to offer solutions of products and services. It is crucial that the
companies understand the challenge they face. Moving away from the todays productoriented
approach to instead take on a holistic perspective where service has an equal
central role as the product is necessary, but often complicated. To begin this
transformation, a first step is to develop a business plan for service alone, where the core
is the company’s value offer. Previous research on what factors are crucial when
developing a new business model within Servitization, as well what is valued by both
companies and customers is lacking, therefore was this study conducted.
The case study is conducted at a Swedish industrial manufacturing company, which
manufactures complex products. The purpose is to examine what factors that are
important, both internally and externally, when developing a business model for service.
From this study three primary factors have been identified. The first is the necessity to
separate services from other fields, to avoid the prejudice of a product-focused
organization. Second, develop distinct packages of services to aid the company to
demonstrate the value that services generate for its customers. The third is to regard the
field of service as a part of its core market and not as an aftermarket.