Integrating Distribution, Sales and Services in Manufacturing: A Comparative Case Study

Torben Juul Andersen*, Søren Bering

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

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Abstract

Purpose
The aim of this study is to gain important insights on integration oriented servitization identifying essential dimensions of effective structures, coordination approaches and management controls adopted by manufacturing firms that integrate forward towards distribution, sales and services.

Design/methodology/approach
The study adopts a theory-guided qualitative abductive methodology to conduct a comparative case-study of two manufacturing firms in the same industry integrating forward to enhance servitization but with significantly different performance outcomes. The findings are uncovered from a broad spectrum of primary and secondary data spanning two decades.

Findings
The consistently high-performing firm puts equal emphasis on production and downstream distribution, sales and services and motivate individuals to engage in entrepreneurial efforts to develop combined product-services offerings that are valued by customers. The underperforming firm prioritizes operating efficiency driven by engineering prowess and managed through planning, standardization, authority and central controls.

Research limitations/implications
The study is based on two representative firms operating in a specific industry context, which has ramifications for the generalizability of results and calls for replication studies to substantiate and extend findings.

Practical implications
Forward integration from manufacturing into distribution, sales and services represents a specific servitization strategy that needs structure and particular coordination approaches to be effective in complex dynamic product-markets. The characteristics of the outperforming case company provide useful insights on effective integrated servitization efforts.

Social implications
Forward integration is a commonly adopted strategy among manufacturing firms that constitute the backbone of modern economies and effective governance of these integration oriented servitization efforts has important implications for societal value creation.

Originality/value
This study builds on rationales from management science including economic theory, corporate strategy and different micro-foundational lenses and thereby hone recent calls for broader theoretical foundations to enlighten studies of the servitization puzzle.
Original languageEnglish
JournalInternational Journal of Operations and Production Management
Volume43
Issue number10
Pages (from-to)1489-1519
Number of pages31
ISSN0144-3577
DOIs
Publication statusPublished - 2023

Bibliographical note

Published online: 17 January 2023.

Keywords

  • Servitization
  • Incentives
  • Coordination
  • Interdependencies
  • Forward integration

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