Servitization of the manufacturer’s value chain

Abstract

Servitization, the offering of product-services, is a more and more pervasive concept. When applied correctly, it exploits the product and generates additional added value for the manufacturer as for the customer. Until now, servitization has been applied only onto the usage phase of the product, creating services around it. However the product is not the only valuable and tradable asset in a manufacturing enterprise. Therefore this article scrutinizes the possibility to additionally exploit the manufacturer’s value chain, by servitizing its components and hence transforming them into products per se. To test this possibility Thoben’s seminal representation of servitization was taken and applied onto the components of the value chain identified by Porter. It was elucidated that the proposed concept is feasible and under certain circumstances, it increases the seller’s and buyer’s sustainable competitive advantage. The article concludes by questioning the effect of this novel concept onto sustainability.