Toward service orientation in manufacturing firms : Requirements and challenges for innovation and new service development process The case of Ericsson AB

Moving toward services business is more than just a new source of revenue for the manufacturing firms. Increased competition blended with ever increasing demands from customers makes the transition toward services an essential shift for competitiveness and survival of manufacturing companies. This new landscape, however, brings about some challenges for the manufacturing firms that possess long lasting organizational routines and processes designed for the context of physical products or software. Idiosyncratic characteristics of services (Intangibility, inseparability, heterogeneity, perishability) urge for routines and processes which are different to those for physical products. New service development (NSD) process is among these critical areas. This research is aimed at understanding the requirements of an effective NSD process through a single in-depth case study. In this research we provide empirical support for the NSD process model suggested by (Kindström and Kowalkowsky(2009). Theoretical contributions also include deeper understanding of services and differentiation of services with regards to 1) their nature of relationship with customers, 2) degree of Standardizability 3) degree of integration/separation of services to physical products. We have also considered typology of service innovation in our study and tried to map empirical findings from the case study to the earlier findings in this context. The study results suggest adjustments to the process according to findings from different service areas. Managerial implications also consider adaptation of knowledge management strategies and supportive approaches to amplify service innovation at Ericsson AB.The research won the third prize from VINNOVA and ESBRI for the best student thesis among Swedish university on the subject of innovation for the year 2011, read more here: http://www.innovationsuppsats.se/tidigare.asp.