A history-based framework of servitization and deservitization

Purpose The purpose of this study is to develop a history-based framework of servitization and deservitization. Design/methodology/approach The study draws on three history-based management theories, i.e. industry lifecycle, strategic pivoting and strategy restoration, to develop a conceptual framework of how servitization and deservitization pivots influence firm performance in different stages of the industry lifecycle. A series of examples involving configurations and reconfigurations in production illustrate the theoretical propositions. Findings The proposed framework predicts that servitization pivots positively influence firm performance in the ferment phase, but this effect gradually diminishes as industries advance into transition and mature phases. In contrast, the framework predicts that deservitization pivots negatively influence firm performance in the ferment phase; this effect, too, becomes negligible in the transition phase but positive in the mature phase. Moreover, the proposed framework predicts that deservitization pivoting outperforms servitization pivoting in mature servitized industries to the extent that such pivots are restorative in nature, thereby suggesting that deservitization may represent a strategic opportunity for firms in mature industries. Originality/value This study highlights the role of history-based management theories in enhancing our understanding of servitization and deservitization.

Automated summary

This study develops a history-based framework of servitization and deservitization, showing how servitization and deservitization pivots influence firm performance in different stages of the industry lifecycle. The framework predicts that servitization pivots have a positive impact in the ferment phase but diminish as industries advance, while deservitization pivots have a negative impact in the ferment phase but become positive in the mature phase. Additionally, deservitization may outperform servitization in mature industries if the pivots are restorative in nature.