Facilitating Servitization in Manufacturing Firms: The Influence of Strategic Orientation

Servitization has significant implications for the sustainable development of manufacturing, the economy, and the environment. However, it does not always produce returns as the firms expect, which may discourage them from engaging in this transition. In this study, we examine the facilitating effects of two dimensions of strategic orientation (i.e., technology and market orientation) on two types of servitization (i.e., basic and advanced service provision), and further investigate the performance impacts of these servitization types contingent on firm size. By conducting an empirical study, using survey data comprising 210 samples, we confirm that both technology and market orientation are positively related to basic and advanced service provision. Moreover, while they have equal effects on basic services, market orientation is more important than technology orientation for providing advanced services. We also find that, for basic services, these two strategic orientations function independently, whereas they reinforce each other in the provision of advanced services. Finally, the relationship between servitization and firm performance is contingent on the size of the firm. Our results show that small firms can benefit from providing basic services, rather than advanced services, while only advanced services can improve the performance of large firms further