Test of Collaborative Effect between the Servitization and Product Innovation Input of Manufacturing Enterprises: An Explanation of the “Servitization Paradox”

Abstract

Abstract:

Many manufacturing enterprises have experienced the decline of performance in servitization process, which is called the "servitization paradox". From the collaborative perspective of servitization and product innovation, this paper analyzes the complementary functions of two kinds of innovation in value creation. At the same time, it further divides the service into product orientated mode and customer oriented mode, and demonstrates the role of two kinds of business models and product input in performance. Results indicate that the complementarity between servitization and product innovation bring long-term benefits at the cost of next year's performance. On the contrary, both servtization in isolation and product innovation can improve enterprises' performance in short term but in long term they damage the value of enterprises.

Key words: servitization paradox, product-oriented business model, customer-oriented business model, performance, enterprise value

Xiao Ting. Test of Collaborative Effect between the Servitization and Product Innovation Input of Manufacturing Enterprises: An Explanation of the “Servitization Paradox”[J]. , 2019, 31(7): 274-285.

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