Identifying Dualities in Servitization – Conceptualizing the Transition between Business Models

Abstract

Servitization, considered as the phenomenon whereby a firm decides to integrate services in its offering, comes with some changes in the organisational structure. Therefore, the fundamental question of this work aims to identify the five dualities characteristics studied by Graetz and Smith (2008) coming out during the transition, which are simultaneity, relatedness, dynamism, minimal threshold and improvisation. As a secondary objective, paradoxes (Smith and Lewis, 2011) arising during the transformation are detected. For identifying these dualities and paradoxes, an ideal business model (BM) was created and assembled in four different application: Merely Product BM, the initial step of the transition, offering only products, Product and Service BM, offering together product and service, Merely Service BM, involving only services in the offering, and Highly Automated Service BM, with automatised service offering. It is hoped that this study will help the management evaluating the feasibility of servitizing and some suggestions were given in order to handle smoothly the conflicts arising.