Should manufacturers support the entire product lifecycle with services?

Abstract

The growing trend to develop product–service innovation (PSI) in manufacturing industries has forced firms to consider the real impact of adding services to their sales portfolio. Literature has shown that PSI implementation has heterogeneous effects on performance as it depends on the service development choice and the specific industry in which firms compete. Moreover, PSI implementation has differing effects on performance depending on the manufacturer’s position in the value ecosystem. Although the heterogeneous PSI–performance relationship has previously been studied in terms of its intensity, research has not yet examined whether services should support specific stages or the entire product lifecycle. For shedding light on this issue, a fuzzy-set qualitative comparative analysis (fsQCA) is carried out on a sample of Basque firms that operate in the machine manufacturing sector. This useful technique uncovers a set of specific service combinations that maximize manufacturers’ profit margin and ratio of solvency. As a result, this study is novel in analyzing the service provision over the entire product lifecycle and reveals that although some service complementarities do exist, single or bundled service specialization outperforms an integral and diversified service approach.