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SUMMARY:Exploring the Financial Consequences of the Servitization of Manuf
 acturing - Prof. Andy Neely  (Cranfield University and IFM\, University of
  Cambridge)
DTSTART:20090203T120000Z
DTEND:20090203T140000Z
UID:TALK13437@talks.cam.ac.uk
CONTACT:Peter Wild
DESCRIPTION:Commentators suggest that to survive in developed economies ma
 nufacturing firms have to move up the value chain\, innovating and creatin
 g ever more sophisticated products and services\, so they do not have to c
 ompete on the basis of cost. While this strategy is proving increasingly p
 opular with policy makers and academics there is limited empirical evidenc
 e to explore the extent to which it is being adopted in practice. And if s
 o\, what the impact of this servitization of manufacturing might be. This 
 paper seeks to fill a gap in the literature by presenting empirical eviden
 ce on the range and extent of servitization. Data are drawn from the OSIRI
 S database on 10\,028 firms incorporated in 25 different countries. The pa
 per presents an analysis of these data which suggests that: [i] manufactur
 ing firms in developed economies are adopting a range of servitization str
 ategies – 12 separate approaches to servitization are identified\; [ii] 
 these 12 categories can be used to extend the traditional three options fo
 r servitization – product oriented Product-Service Systems\, use oriente
 d Product-Service Systems and result oriented Product-Service Systems\, by
  adding two new categories “integration oriented Product-Service Systems
 ” and “service oriented Product-Service Systems”\; [iii] while the m
 anufacturing firms that have servitized are larger than traditional manufa
 cturing firms in terms of sales revenues\, at the aggregate level they als
 o generate lower profits as a % of sales\; [iv] these findings are moderat
 ed by firm size (measured in terms of numbers of employees). In smaller fi
 rms servitization appears to payoff while in larger firms it proves more p
 roblematic\; and [v] there are some hidden risks associated with servitiza
 tion – the sample contains a greater proportion of bankrupt servitized f
 irms than would be expected.
LOCATION:Wordsworth Room\, St John’s College
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