Sequence and Dynamics of Service Capability Configurations in Product Firms

The purpose of this paper is to explore the process of service capability base development in manufacturing firms. While scholars mostly studied capabilities in isolation we argue that it seems to be important to assess how service capabilities are interrelated as well as how a firm orchestrate their development and deployment. Study cross-compare 10 national subsidiaries of one capital equipment manufacturer to explore the effectiveness of their service capability base development processes. Results suggest that successful organizations opt for a sequential development of three service capability clusters, which we subsequently label the ‘presence’ (first), ‘progress’ (second) and ‘process’ cluster (third). Furthermore, our cases suggest that less successful organizations either fail to fully develop one or more of these capability clusters; they develop them simultaneously or in a different sequence. The understanding of the process may assist the decision makers to prioritize activities and gradually invest in service business.