Servitization: Which way the journey goes?

Transcription

1 Servitization: Which way the journey goes? Max Finne Juho Soinio Aalto University, School of Science and Technology Servitization literature suggests that manufacturers are increasingly adding services to their offerings. We present an empirical case study of a leading global manufacturer HitechCo that has travelled the development path the other way round, from pro-actively offering very advanced services to only reacting to customer service orders. The change has been due to lost visibility to installed base caused by supply chain intermediation that was induced by evolving product technology. Thus, we argue that servitization literature needs to take into account changing environmental factors, presented in organizational ecology literature, that can affect the abilities of manufacturers to provide industrial services. 1. Introduction Servitization literature discusses manufacturers entering service business and broadening their offerings to encompass more advanced services integrated with products. The literature sees that manufacturer s move is towards increasing service dominance (e.g. Vandermerwe; Rada, 1988; Wise; Baumgartner, 1999; Baines et al., 2009a); with a few exceptions presented of companies who have decided to take a step back in their servitization journey (cf. Sawhney et al, 2004; Schmenner, 2009). Based on an empirical case study we argue that it is not always a conscious decision by the industrial company to withdraw from advanced services. Thereby, our aim is to provide new knowledge of the factors that can prevent manufacturers from servitizing and even push them back towards traditional manufacturing. We present an empirical case study of the development path of the service operations of HitechCo, a leading global manufacturer. The company started in the early 1970s to manufacture products with new innovative technology. HitechCo provided from the very beginning integrated offerings of the products and various advanced services that enabled the installation of the products into end users processes and operating the installed base (IB) optimally. As the technology was new and the customers had very limited understanding of its details, the company saw it crucial to develop rapidly advanced service operations to enable end users to capture all the potential benefits of the new products. The service part of HitechCo s offering has since decreased significantly and currently the company is providing services mostly by only reacting to customer orders. The driving force behind this change has been the evolving product technology that has lengthened supply chains and therefore HitechCo has lost the visibility to its end users and IB. Hence, the company is having great difficulties with trying to deliver IB 1

2 related services. Thereby, our research shows that influences of technological development on servitization can be sometimes contradictory to the current view that technological development facilitates servitization (c.f. Neely, 2009; Schmenner, 2009). We start by presenting how servitization is viewed in current literature, and the challenges manufacturers will face when servitizing, as well as a brief look into supply chain intermediation and organizational ecology literature. Then we introduce the research method used in the empirical case and data collection. The case study of HitechCo will follow, and finally discussion on the implications of our findings. 2. Literature review In the literature review we discuss servitization from manufacturer s point of view: its characteristics and the change in the offering of manufacturer, and the challenges in carrying out it in practice. During the empirical case study we found out that some of our main findings cannot be explained by servitization literature. Thus we also carried out a brief review of supply chain intermediation and organizational ecology literature that offer explanation on the observed development patterns Servitization, its features, and direction Current literature sees downstream move to service business as an advisable way for manufacturers to generate new business, increase profitability, and differentiate from competition (c.f. Wise and Baumgartner, 1999; Auramo and Ala-Risku, 2005; Reinartz and Ulaga, 2008). As industrial companies are seeking ways to offer more services to the market, they are bundling goods, services, support, self service, and knowledge into customer focused offerings (Vandermerwe; Rada, 1988). According to current literature (cf. Oliva; Kallenberg 2003; Baines et al, 2009a; Neely, 2009) this servitization of business is being adopted by increasingly many companies and services are representing a larger component of the total customer offerings. Although the term servitization was introduced by Vandermerwe and Rada in 1988 the phenomenon itself has antecedents that go back to the 1850s, when almost all manufacturers simply engaged in manufacturing offering no services whatsoever (Schmenner, 2008). Companies that first started providing bundles of goods and services together dominated their industries for decades. Many manufacturers of novel products did integrate their offerings with services to help marketing and controlling the supply chains (Schmenner, 2008). There are many drivers that are facilitating servitization. Margins of service sales are on average higher than the margins of products (Oliva and Kallenberg, 2003; Cohen et al., 2000; Glueck et al., 2006). In addition, services offer more stable revenue than product sales (Oliva; Kallenberg, 2003; Auramo; Ala-Risku, 2005; Cohen et al., 2006). According to Cohen et al. (2006) increasing sales by adding services is also much cheaper than to find new customers for existing products. Another cost advantage for services gives the fact that they require fewer assets than product sales (Wise; Baumgartner, 1999). Vandermerwe and Rada (1988) state that fierce competitive pressures are driving servitization, as increasing commoditization makes it 2

3 Services as add-on Tangible goods as add-on incredibly difficult to maintain competitive advantage based on product innovation (Sawhney et al., 2004; Auguste et al., 2006; Glueck et al., 2006). Manufacturers are adding services also for the obvious reason; to sell more products (cf. Brax, 2005). By offering services that assist customers in getting the desired benefits of their products, manufacturers can increase customer satisfaction, and thereby repeat sales (e.g. Cohen; Lee, 1990; Cohen et al., 2000). According to Markeset and Kumar (2003) after-sales services were traditionally centered on product, and consisted mainly of tasks related to maintenance, service and repair. Baines et al. (2009b) talk about product-centric servitization, in which service portfolio is directly coupled to product offering. The scope has since been broadening towards relationship related services (Frambach et al., 1997; Gebauer et al., 2005; Mathieu, 2001a). Using Cova s et al. (2000) categorization, the manufacturers have moved from offering services supporting their product to services supporting the client s actions with or without a direct link to their product, and to services supporting the customer s network. Whereas, previously the focus was on core business activities, nowadays manufacturers are thinking and behaving like service companies as they are selling more services like consulting or providing solutions (Vandermerwe; Rada, 1988). Product-service continuum (Figure 1) can be used to describe manufacturer s offering, and the relative importance of tangible goods vs. services in it (Oliva and Kallenberg 2003). Companies are redefining their position along the Product-service continuum overtime and moving towards increasing service dominance (Gebauer, 2008; Baines et al., 2009a). According to Schmenner (2008) the transition has also historically always been from manufacturing into services. Relative importance of tangible goods Relative importance of services Fig. 1: Product-service continuum (modified from Oliva; Kallenberg 2003). According to Oliva and Kallenberg (2003) manufacturers have some unique advantages related to offering installed base (IB) services: lower customer acquisition costs, lower knowledge acquisition costs, and lower capital requirements; which other service providers find very expensive to acquire. These are respectively the result of manufacturers existing customer relationships, acquired knowledge of their own products, as well as existing equipment and resources that are needed in servicing the IB of their products. In line with this, Normann and Ramirez (1993) state that the most important assets a company owns are its competencies (technologies, specialized expertise, business processes, and techniques) and customer base. When servitization goes on manufacturer eventually becomes a solution provider or product-service system provider (cf. Goedkoop et al. 1999; Mont, 2000; Baines et al., 2007) who continuously supports and improves the utilization and effectiveness of the installed base (Oliva; Kallenberg, 2003). Many larger companies supplying high value capital equipment represent successful examples of this (Baines et al., 2009a). 3

4 According to Schmenner (2008) greater servitization has occurred among manufacturers of high technology products that are not produced by continuous flow processes. Accordingly, technological development is often viewed as facilitating servitization (e.g. Vandermerwe; Rada, 1988; Neely, 2009; Schmenner 2008), as it enables new ways to access, store, and share information needed in service operations. Neely (2009) identified 12 different types of services provided by industrial companies in developed countries: design and development services, systems and solutions, retail and distribution services, maintenance and support, installation and implementation, financial services, property and real estate, consulting, outsourcing and operating services, procurement services, leasing, and transportation and trucking services. Some authors see that servitization means also that companies are moving down the distribution chain: manufacturer s focus is moving from distributors and integrators to end users (Vandermerwe; Rada, 1988; Wise; Baumgartner, 1999). Schmenner (2008) even suggests that servitization presupposes that the manufacturer has some significant control over downstream (Schmenner, 2008). As this kind of development goes on, industrial companies may have to adopt horizontal service delivery structures, in which a service integrator orchestrates the delivery of industrial services (Oliva; Kallenberg, 2003). In some cases there is a manufacturer acting as the agent of the end user and integrating various service providers together (Auramo; Ala- Risku, 2005) Challenges in servitizing Current literature offers some explanations why a few manufacturers have found it hard to carry out servitization in practice. Because service management principles are quite different from traditional production management, the necessary organizational structures and processes need to be adapted as well as service culture, which requires a shift of managerial mindset (Brax, 2005). Auramo and Ala-Risku (2005) note that service management has unique characteristics like customer influence, production at customer site, and inseparability of production and consumption. This poses difficult challenges, since service provision requires organizational principles, structures, and processes new to the manufacturers (Cohen et al., 2006; Auramo; Ala-Risku, 2005). Also the complexity increases, as customer needs do not depend solely on the product anymore, but on the customer type (Auramo; Ala-Risku, 2005). In essence, services are in conflict with the transaction orientation of manufacturing (Brax, 2005), and thus servitization is challenging by its nature. The design of services is challenging as services represent new activities for manufacturers and are difficult to define (Baines et al., 2009a). Undertaking new activities also poses additional risks; namely capability, market, and financial risk (Sawhney et al., 2004). Servitization involves challenges for a manufacturer that require motivating the customer for service co-production, effective information management, change in thinking, knowing customers business context, motivating the customer to the relationship, and changing organizational culture (Brax, 2005). Manufacturers are also likely to meet internal change resistance during their servitization journey (Baines et al., 2009a). 4

5 Moving to offering services increases investments required and changes company risk profile. Schmenner (2008) suggests that manufacturers who do not servitizise are typically smaller and lower volume producers in certain industries. On the other hand, Neely s (2009) findings suggest that larger firms find it difficult to achieve the financial benefits of servitization: they achieve higher revenues but lower profits (see also Gebauer; Friedli, 2005). Gebauer et al. (2005, 15) term the phenomenon of increased service offerings and higher costs without higher returns service paradox in manufacturing companies. Oliva and Kallenberg (2003) see that the transition into services by manufacturers can be relatively slow and cautious, because the manufacturers may not believe in the economic potential, or they might also see that providing services is beyond the scope of their competencies, and some manufacturers have failed in deploying service strategy. Mathieu (2001a) adds to this list by noting that some manufacturers see servitization risking giving a specific client an edge over another. In service business new capabilities, metrics, and incentives are needed, and most importantly the company s culture has to be changed into a service oriented one (Mathieu, 2001; Brax, 2005), which can form a barrier to successful servitization. Another major challenge is to create a global service infrastructure capable of responding locally to customer requirements (Oliva; Kallenberg, 2003). Not all manufacturers have been successful in carrying out servitization in practice. For example Intel shut down a unit hosting company websites and refocused on its core business; Boeing for its turn stopped its efforts to offer financial services to other industries than aviation (Sawhney et al., 2004). On the other hand, companies in industries with significant existing barriers to entry do not even need to build additional barriers by integrating services into their offerings (Schmenner, 2009) Supply chain intermediation and organizational ecology Intermediary theory explains why intermediaries exist and discusses their advantage over direct exchange (Spulber, 1999). They can be used to reduce transaction costs, pool and diversify risks, lower the costs of matching and searching, or alleviate adverse selection (Wu, 2004). Organizational ecology in turn focuses on organizational diversity and the relationship between organizations and their environment (Hannan; Freeman, 1989). Spulber (1999) proposes The intermediation theory of the firm that explains the existence of companies through the need to intermediate exchange between suppliers and their customers. Namely, an intermediator firm is formed in situations, where intermediated exchange is more economic than direct exchange. Accordingly, Wu (2004, 68) defines companies as intermediaries which establish and operate markets. Resnick et al. (1998) divide intermediaries between market makers that buy, sell, and hold inventories and brokers who provide services instead of owning goods. Organizational ecology explains the dynamics in organizational populations through entries and exits of organizations, which are explained by exogenous environmental conditions (cf. Hannan; Freeman, 1989). The exogenous environment consists of resources, institutions, technology, and political forces. Resources are used as inputs in production, institutions and political forces place external demands on organiza- 5

6 tions, whereas technological development generally fuels most organizational activities (Meyer; Scott, 1983; Klepper; Simons, 1997; Carroll; Hannan, 2000). 3. Case study methodology and data collection We have carried out a longitudinal case study (c.f. Eisenhardt, 1989; Yin, 2003) of the service operations of HitechCo (the name is an acronym), a leading global investment goods manufacturer providing industrial services. The research focuses on the development of the service operations from the early 1970s until present. The methodology was selected as the interaction between a phenomenon and its context is best understood through an in-depth case study (Dubois; Gadde, 2002). Furthermore, Eisenhardt (1989) sees case study supporting theorizing on new phenomena and the emergence of new theory, and according to (Yin, 2003) case study is appropriate for exploratory and theory building research. We aim to reflect the development path of HitechCo s service operations to the general path presented in the servitization literature, and thereby add to existing theories. The research was carried out in two phases: June 2008 November 2009 we discovered HitechCo s current challenges with its service operations and the reasons behind it. May 2010 August 2010 we had a look into the historical development of HitechCo s business and service operations particularly. The research is a part of an industrial service research project, comprising global manufacturing companies. HitechCo was selected as a manufacturer that had achieved years of successful provision of advanced industrial services, but was currently struggling with its service operations due to major changes in the operational environment induced by evolving technology of its products. The company operates globally and has service resources, operated by itself or partners, in over 50 countries. Our data consists of semi-structured interviews with HitechCo employees in the centralized product support unit and three local business units in three European countries, interviews with representatives of four integrators, workshops with the company s key decision makers, the company s internal documents and presentations, data of delivered products, a book about the historical development of Hitech- Co s product and business, meetings with HitechCo and its customers, and observations in the company s premises during two four-month on-site research periods. The interviews in the first phase covered especially aspects related to the integrator market, market segmentation, HitechCo s value offering, and information sharing in the service supply chain. The focus in second phase interviews was in HitechCo s offering in the 1970s, 80s, and 90s and the part of services in it, as well as the role of different parties in ensuring the optimal operations of the installed base of the company s products. Altogether 18 persons were interviewed in the first phase and three persons in the second phase, and the interviews lasted 30 to 120 minutes. Most interviews were recorded, overviews of the interviews written and sent to the interviewees to verify the contents. The interviews were triangulated with written material whenever possible. Additional interviews were carried out until theoretical saturation was reached; i.e. when no new information emerged (cf. Eisenhardt 1989). Following the abductive case study approach (Dubois and Gadde, 2002) our main goal was to generate new concepts and develop existing models as opposed to confirming existing theories. In this approach, theory, empirical data, and case analysis 6

7 are continuously matched to create insights that are coherent with both theory and empirical observations. In practice this meant continuous iterations between literature, data collection, and data analysis. The data analysis was carried out according to Eisenhardt s (1989) qualitative case study methodology. 4. Empirical findings We describe first the business of HitechCo, a leading global manufacturer, and the role of industrial services in it from the launch of the new high technology products in the early 1970s until the end of the century. Then we discuss how technology evolution changed supply chain structures, which disrupted the company s abilities to continue effective service provision. Hence, also the operations of other parties in the industry were affected significantly HitechCo s business in In the 1960s HitechCo was providing investment goods used in optimizing various industrial processes. As the markets became saturated the company started seeking new sources of revenue. As we read the BBC article (12/1964) about the new technology, a new world of opportunities opened up in front of us (HitechCo s R&D Manager). In the early 1970s HitechCo started the production of investment goods based on new innovative technology. At that time there were only two or three competitors, globally, who could deliver products of similar technology. There was no mass production and the products were sold as project deliveries containing various kinds of services to enable the proper functioning of the devices as well as optimizing end user s production efficiency. The biggest customer segments in the early years were the Transportation sector and Paper and pulp industry. The necessity of advanced services for HitechCo s business is reflected on one of the company s first projects in the Transportation sector. It took 2,5 years from customer order to get the first products operating on customer site. Following the deliveries the company carried out various tests on the delivered products to troubleshoot problems occurring during operations. The tests were carried out both on customer site as well as in the factory and additional tests were done every time the products received improved and updated components. HitechCo even designed some new components for the delivered products to meet the operational requirements that had come up in the tests (Harmoinen, 2002). The phase of frequent testing and product improvements lasted altogether five years in the project and HitechCo was responsible of most of it, as the end user mainly only supervised it. The company simply was obliged to provide this kind of services in order to integrate the products into customer processes and to enable end users to receive the benefits that the new technology provided. During the first few years the production volumes of the new products increased exponentially. Thereby HitechCo moved into mass production by the end of 1970s; first the smaller sized products that were produced in higher volumes, gradually also the bigger products. Product family Evo3 (acronym) introduced 1985 represented a major shift in product design. The product family meant a shift from analog to digital technology and it involved a processor to take care of all of the control functions. 7

8 From service operations point of view the most significant change was that these products were designed to include separate modules that could be combined in various ways depending on the operational requirements. This new modular structure made it possible to move many of the service tasks operated previously on-site to back office. HitechCo s service engineers or technicians carried out all installation and commissioning related tasks during the first years in the 1970s. From early on the company started giving end users training lasting several days on servicing the products. As end users went through this training and got more experience of the operations of the products, the ones with most experience and service resources started to carry out part of the installations by themselves. However, all of them relied still heavily on HitechCo in service related issues. There were no external service providers, simply because no service company had enough expertise and knowledge on the technology that the products were based on. At this time the company can be seen as providing Product-oriented PSS (cf. Neely, 2009) as it offered design and development, installation and implementation, maintenance and support, as well as consulting services related to the products. The company was active in modernizing: it contacted customers using its older products to discuss replacing those with products based on new technology. The company also developed marketing material to make the new technology understandable and concrete for the possible customers. The marketing used various analogies instead of presenting technical details: One campaign in 1979 compared the product s role in the industrial processes to the role of human brain. Another campaign Höga varv och djupa dalar stressing energy efficiency made comparisons between energy consumption and Swedish geography. There was also a marketing bus with different types of products driving around Sweden, which enabled possible customers to get to try the products in action. The nature of the marketing reflects the huge gap in understanding the new technology that existed between HitechCo and its possible customers in the early years. This fact made it possible, and even mandatory, for the company to develop rapidly advanced service operations Service operations after a major change in industry structure HitechCo has through history been strong in servicing the installed base (IB), in situations where it has direct contact to end user: it is generally considered as one of the Industry benchmarks. However, whereas in the 1970s the company had direct contact to end user in all product deliveries, currently approximately 80% of its product sales go through indirect channels. Here we discuss the development and the reasons behind it. HitechCo s products are currently mostly integrated into the equipment of integrators, who provide end users with more strategic equipment consisting of many interrelated subunits. Therefore, HitechCo is pushed up-stream in supply chain causing it to lose direct contact to end users and visibility to the IB of its products (Figure 2). Nowadays, the company does not even know who finally receives its specific product individuals in indirect channels and where the IB and end users are located. This ruins its abilities to manage effectively the services related to its products and forces the service operations from proactive to reactive mode. 8

9 HitechCo Integrator Integrator Integrator End user End user End user End user End user End user Delivered base Installed base Line of visibility Fig. 2: HitechCo s visibility in indirect channels. Currently HitechCo s visibility in indirect channels is only to the point where the products are delivered, which we call Delivered base in respect to the established concept of IB. This situation poses challenges in delivering IB related services and HitechCo has been forced to only reacting to service orders. Our sales guys are not really selling services; I would rather call what they are doing order handling (HitechCo s Area Sales Manager). The new situation has caused severe challenges for different parties in the service supply chain. Integrators usually see HitechCo as a competitor in service operations, as the company is renowned for its advanced service operations in end user segment. Thus they are often very reluctant to share IB information with the firm, which makes it practically impossible for the company to proactively service its IB. However, when competing against each other in service provision, both HitechCo and the integrators are worse off. HitechCo has great difficulties in servicing the IB as it does not know where the IB is located, whereas integrators are not able to optimize the operational efficiency of the IB because of lack of proper equipment and accumulated expertise knowledge of products: It would give us definitely added value if HitechCo could give us information of how to maintain the products (the Chief Buyer of an integrator). In addition, end users suffer production losses when the IB is maintained sub optimally and the down times are therefore greater. The new situation with indirect channels, i.e. supply chain intermediation (cf. Wu 2004), has pushed the company s offering left towards increasing product dominance in Oliva and Kallenberg s (2003) Product-service continuum. Hence, the company s current challenge with service provision is contradictory to what is the situation with most manufacturers described in the servitization literature: the firm is struggling to retain a relevant role downstream, where it had previously been successfully doing business. 9

10 5. Discussion Our empirical research shows that evolving product technology can have unanticipated effects on the servitization journey of manufacturers. Servitization literature is almost unanimously suggesting that manufacturers are increasingly adding services into their offerings (e.g. Wise; Baumgartner, 1999; Mathieu, 2001a; Baines et al. 2009a), whereas HitechCo has been doing the exact opposite. The literature surely gives some examples, of companies taking steps back words in servitizing (cf. Sawhney et al., 2004; Schmenner, 2009). These have though been due to management decisions and usually based on unsuccessful development of business. In the empirical case of this research the situation is different. The production volumes and revenues of HitechCo have soared: 1986 to 1996 the production volumes quadrupled and the sales were in times the number in 1981 (Harmoinen, 2002). Accordingly, the company has been extremely successful although environmental factors have forced it back words in its servitization journey. The development that pushed HitechCo up-stream and towards increasing product dominance was caused by supply chain intermediation induced by product technology evolution. Namely, as the technology matured products became less complex and less expensive to produce. At the same time competitors started to provide products with similar technology, which reduced product prices even further. This development meant that end users started to view the products as less strategic and thereby were unwilling to buy the products separately; instead they wanted to have the products integrated into more expensive and critical equipment used in their operations (cf. Wu, 2004). Thus, there emerged integrator companies in the supply chain between HitechCo and end users (cf. Spulber, 1999), which caused the company to lose visibility to its installed base. As HitechCo s current visibility in the indirect channels is only to Delivered base, its previous service orientation has turned into more or less traditional manufacturing. The reason why the development path that HitechCo has gone through does not fit into existing servitization theory is that the company s industry was undergoing a major structural change from the introduction of the new technology until its wide use in various industrial applications. In other words, one of the factors shaping the exogenous environment (cf. Klepper; Simons, 1997) of HitechCo underwent a gradual change that meant a major change in supply chain structures. Servitization literature in turn does not account for this kind of changes of the whole industry; implicitly all industries are assumed static, at least from the manufacturers point of view. This kind of assumption seems not fitting well in every industry, especially not in those characterized by high technology. We argue that servitization literature needs to take into account changing environmental factors (cf. Meyer; Scott, 1983; Klepper; Simons, 1997; Carroll; Hannan, 2000) that can affect the abilities of manufacturers to provide industrial services. In some cases the manufacturer might not have the choice between service and product orientation, it is rather pushed to specific direction by a change in the exogenous environment. We suggest that learning from organizational ecology (e.g. Hannan; Freeman, 1989; Klepper; Simons, 1997; Carroll; Hannan, 2000) would benefit servitization literature. 10

11 Based on the empirical research we also found out that paradoxically many authors see technological development as facilitating servitization (Baines et al., 2009a; Neely, 2009; Schmenner, 2009), whereas in the empirical case of this paper it is technological development itself that induces commoditization of the products, supply chain intermediation, and eventually moves the manufacturer away from integrated offerings. This research is based on a single, although in-depth, case study; hence the results may not apply directly to a wider set of manufacturers. Despite this limitation, we see that this research gives new understanding to servitization literature. Our results are relevant to several manufacturers of high technology products either already in service business or considering entering it. We encourage new research on the effects technology evolution or other environmental changes can have on servitization. References Auguste, B.G.; Harmon, E.P.; Pandit, V. (2006): The right service strategies for product companies. McKinsey Quarterly, no. 1, pp Auramo, J.; Ala-Risku, T. (2005): Challenges for going downstream. International Journal of Logistics, Vol. 8, No. 4, pp Baines, T.S., Lightfoot, H.W., Evans, S., Neely, A., Greenough, R., Peppard, J., Roy, R., Shehab, E., Braganza, A., Tiwari, A., Alcock, J.R., Angus, J.P., Bastl, M., Cousens, A., Irving, P., Johnson, M., Kingston, J., Lockett, H., Martinez, V., Michele, P., Tranfield, D., Walton I.M. and Wilson, H. (2007): State-of-the-art in product-service systems. IMechE Proc. IMechE Vol. 221, Part B: J. Engineering Manufacture. Baines, T.S.; Lightfoot, H.W.; Benedettini, O.; Kay, J.M. (2009a): The servitization of manufacturing: A review of literature and reflection on future challenges. Journal of Manufacturing Technology Management, Vol. 20, No. 5, pp Baines, T.S.; Lightfoot, H.W.; Peppard, J.; Johnson, M.; Tiwari, A.; Shehab, E. (2009b): Towards an operations strategy for product-centric servitization. International Journal of Operations & Production Management, Vol. 55, No. 7, pp Brax, S. (2005): A manufacturer becoming service provider challenges and a paradox. Manufacturing Service Quality, Vol. 15 No. 2, pp Carroll, G.R.; Hannan, M.T. (2000): The Demography of Corporations and Industries. Princeton University Press: New Jersey. Cohen, M.A.; Lee, H.L. (1990): Out of Touch with Customer Needs? Spare Parts and After Sales Service. Sloan management review, Vol. 31, No. 2, pp. 55. Cohen, M.A.; Cull, C.; Lee, H.L.; Willen, D. (2000): Saturn's Supply-Chain Innovation: High Value in After-Sales Service. Sloan management review, Vol. 41, No. 4, pp Cohen, M.A.,; Agrawal, N.; Agrawal, V. (2006): Winning in the aftermarket. Harvard Business Review, May. 11

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