Opportunities and Challenges for B2B Manufacturing Firms: Moving from Products to Services-Case SKF

Opportunities and Challenges for B2B Manufacturing Firms: Moving from Products to Services-Case SKF

Esko Penttinen (Helsinki School of Economics, Finland) and Timo Saarinen (Helsinki School of Economics, Finland)
DOI: 10.4018/978-1-59140-629-7.ch008
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Abstract

Today, many traditional manufacturing firms are focusing on their service operations, which are often seen as a better source of revenue than the first-time installations. Information and communications technology (ICT) can accelerate this process by offering efficient ways to deliver services to the customers and by allowing companies to transform their traditional product strategies to services. This chapter tells the story of a traditional component supplier that wanted to become a service firm. The transition is analyzed based on an established theoretical framework identifying efficient strategies for delivering different types of services, thus providing managers with guidelines for choosing the appropriate business model. The findings of this single case study confirm that the role of ICT as an enabler in the transition process is significant. Furthermore, the buyer’s trust in the supplier turned out to be an essential factor in developing new service-based business.

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