Servitization of Manufacturing companies in emerging markets

Abstract

Securing a competitive advantage for manufacturing companies in economies with fierce rivalry has increasing become difficult. With financial success, company growth and differentiation being objectives manufacturers are continuously striving to achieve it has becoming more beneficial to manufacturer to servitize. Servitization is the process through which manufacturers integrate services to product offering as a means of adding value to the offerings, differentiate from the competitors or generate additional revenue. Current literature has predominantly focused on western world manufactures in developed markets with little insight into the process in emerging markets such as that of Kenya as used in this study. This study aimsto examine the role of servitization in the pursuit of differentiation and achieving competitive advantage for manufacturing firms in emerging economies therefore, addressing this gap in current literature. The study utilises two key frameworks which are servitization theory and organizational culture theory addressing the existing literature and its closely related concepts. Thesestwo frameworks are chosen as they serve as the basis for studying manufacturing companies undergoing a service transition. A theoretical lens is created based on the synthesis of these two frameworks from which the developed servitization capabilities can be drawn and providing a simple view of the empirical results. The empirical section of this study includes the analysis of three unnamed manufacturing company. Primary data is collected through semi structured interviews with the managers from the case companies, the data is then analysed using context analysis. The study finds several differences in the motivations, challenges, and effects of servitization with conceptual similarities between the manufacturing companies in developed markets i.e., Europe and north America with emerging markets i.e., Sub Saharan Africa and southeast Asia. The level of servitization in Kenya is also highlighted given the scope of the data collected in the study with varying levels of servitization capabilities noted amongst different industries and the viability of serv