Servitization : Challenges, Classification and Categorization

Service industries have grown significantly through past decades, and have become dominant concept in todays economy. Saturation of market regarding tangible products has made manufacturers look for innovative solutions to be able to provide more value for the customers. Adding services, making long term relation with customers, satisfying customers needs, respecting to customer demands as well as differentiating the products from competitors are some examples of the solutions. Servitization, the term coined by Vandermerwe and Rada (1988), is now widely recognized as the process of creating value by adding services to products. factors such as; financial, marketing, and competitive advantages play a vital role for manufacturers to accept the challenges to be service providers as well as to gain profit and stable share of the market. Obviously, applying Servitization trend is not simple, and drivers make manufacturers to cope with challenges. In the current book, seven major challenges facing manufacturers toward Servitization were found and described as; cultural, managerial, marketing, production, delivery, product-design, and communication. In order to describe Servitization