Implementing a servitization strategy in B2B markets: the case of Océ

Many companies are shifting from selling manufactured goods to selling complex solutions consisting of product-service bundles capable of fulfilling customer needs. Such a transition is usually referred to as servitization. In spite of the vast literature on servitization there is still a lack of work “that provides guidance, tools or techniques, that can be used by companies to servitize” (Baines et al. 2009a). The main purpose of the paper is to investigate the servitization phenomenon within the context of manufacturing companies selling capital goods in B2B market. In particular the paper aims at explaining how a servitization strategy can be implemented in such a context. The paper is based on a retrospective (Voss, Tsikriktsis & Frohlich, 2002) in-deep case study. The case selected is Océ, a leading multinational company, operating in the professional printing sector. The reason for choosing Océ as a unit of analysis is that it represents an “extreme situation” (Eisenhardt 1989). Firstly, Océ was one of the first companies in its sector that successfully made the transition toward a servitized business model. Being a market leader, Océ lead the change in its segment and is still considered as a benchmark. Secondly, the variety and complexity of the HW and SW products sold by Océ allow an in-depth investigation of the issues related to the delivery of complex integrated solutions (including HW, SW and services) and the interconnections between Service, R&D, Marketing and Sales. Finally, Océ servitized its business following a well-structured, defined and documented approach, which makes it easier to infer cause and effect relationships. The paper is based on multiple sources. Firstly, the author carried out a face-to-face, tape-recorded, interview with the person who, from 1997 to 2003, was responsible for the development and implementation of the Océ servitization strategy worldwide. Such a person (hereinafter: Informant A) is now the CEO of Italian branch of Océ and at that time was the Océ (worldwide) Vice President for Customer Service of the Wide Format Printing Systems Business Unit (WFPS). The interview was conducted in April 2010, lasted 3 hours, and was followed by several interactions via email for clarifications. Secondly, the author had the authorization to access the reserved material (presentations, manuals, checklists), that was used by Informant A to support the strategy implementation. Thirdly, in order to delve into specific issues (e.g. SW development and service marketing), the author was allowed to inquire, via email: the former Services Marketer at Océ WFPS (who now holds the position of Service Operations Manager at Océ Netherland, hereinafter: Informant B), and the Software Support & System Integration Manager at WFPS (hereinafter: Informant C). Both of these people were deeply involved in the Océ servitization process. Fourthly, public materials such as annual reports, case histories, and fact sheets (available on the corporate web site) were consulted for further triangulation. Finally, the author had several informal conversations with the National Service Manager of Océ Italy, who participate, together with the author, in the ASAP Service Management Forum. The paper is organized as follows. In the first paragraphs the company profile will be presented. In the second paragraph the environment in which the company operated when the decision to servitize was taken will be briefly described. Then, the main steps characterizing the company’s servitization process as well as the framework adopted to deliver integrated solutions will be presented. Finally, in the concluding section, the study limitations and generalizations will be discussed.