IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v271y2024ics0925527324000859.html
   My bibliography  Save this article

The order of the factors matters: How digital transformation and servitization integrate more efficiently

Author

Listed:
  • Vendrell-Herrero, Ferran
  • Para-González, Lorena
  • Mascaraque-Ramírez, Carlos
  • Freixanet, Joan

Abstract

This article draws on existing debates on standardization versus adaptation to propose two possible pathways for digital servitization. On the one hand, the standardization pathway posits that digital transformation enables servitized firms to make their service-based business model more standardized, and as a result, scalable. On the other hand, the adaptation pathway advocates that servitization enables highly digitalized firms to make their digital offerings more adaptable to heterogeneous customer needs, and as a result, customizable. We investigate which of these two paths integrates more effectively, and which one is thus likely to prevail in the long run. We use a purpose-built survey of 127 Spanish product firms to test these relationships using partial least squares structural equation modelling (PLS-SEM), and test single- and multi-mediation models. The results corroborate the existence of both pathways, but also suggest that the standardization pathway contributes more to performance than the adaptation pathway. This is consistent with historical transitions in adoption (services existed before digital transformation) and services being dependent on digital technologies delivered remotely. These findings suggest the benefits of customization in digital servitization are lower than previous studies seem to imply, and provide important managerial implications.

Suggested Citation

  • Vendrell-Herrero, Ferran & Para-González, Lorena & Mascaraque-Ramírez, Carlos & Freixanet, Joan, 2024. "The order of the factors matters: How digital transformation and servitization integrate more efficiently," International Journal of Production Economics, Elsevier, vol. 271(C).
    • Handle: RePEc:eee:proeco:v:271:y:2024:i:c:s0925527324000859
    DOI: 10.1016/j.ijpe.2024.109228
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527324000859
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2024.109228?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Christina E. Shalley & Lucy L. Gilson, 2017. "Creativity and the Management of Technology: Balancing Creativity and Standardization," Production and Operations Management, Production and Operations Management Society, vol. 26(4), pages 605-616, April.
    2. Zhou, Dan & Yan, Tingting & Dai, Weiqi & Feng, Junzheng, 2021. "Disentangling the interactions within and between servitization and digitalization strategies: A service-dominant logic," International Journal of Production Economics, Elsevier, vol. 238(C).
    3. Vandermerwe, Sandra & Rada, Juan, 1988. "Servitization of business: Adding value by adding services," European Management Journal, Elsevier, vol. 6(4), pages 314-324, December.
    4. Li, Huanli & Wu, Yun & Cao, Dongmei & Wang, Yichuan, 2021. "Organizational mindfulness towards digital transformation as a prerequisite of information processing capability to achieve market agility," Journal of Business Research, Elsevier, vol. 122(C), pages 700-712.
    5. MacKenzie, Scott B. & Podsakoff, Philip M., 2012. "Common Method Bias in Marketing: Causes, Mechanisms, and Procedural Remedies," Journal of Retailing, Elsevier, vol. 88(4), pages 542-555.
    6. Kohtamäki, Marko & Parida, Vinit & Patel, Pankaj C. & Gebauer, Heiko, 2020. "The relationship between digitalization and servitization: The role of servitization in capturing the financial potential of digitalization," Technological Forecasting and Social Change, Elsevier, vol. 151(C).
    7. Shen, Lei & Sun, Wanqin & Parida, Vinit, 2023. "Consolidating digital servitization research: A systematic review, integrative framework, and future research directions," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    8. Sullivan, Yulia & Fosso Wamba, Samuel, 2024. "Artificial intelligence and adaptive response to market changes: A strategy to enhance firm performance and innovation," Journal of Business Research, Elsevier, vol. 174(C).
    9. Gregory G. Dess & Richard B. Robinson, 1984. "Measuring organizational performance in the absence of objective measures: The case of the privately‐held firm and conglomerate business unit," Strategic Management Journal, Wiley Blackwell, vol. 5(3), pages 265-273, July.
    10. Shad S. Morris & Sharon A. Alvarez & Jay B. Barney & Janice C. Molloy, 2017. "Firm-specific human capital investments as a signal of general value: Revisiting assumptions about human capital and how it is managed," Strategic Management Journal, Wiley Blackwell, vol. 38(4), pages 912-919, April.
    11. Choi, Tsan-Ming & Feng, Lipan & Li, Rong, 2020. "Information disclosure structure in supply chains with rental service platforms in the blockchain technology era," International Journal of Production Economics, Elsevier, vol. 221(C).
    12. Kohtamäki, Marko & Parida, Vinit & Oghazi, Pejvak & Gebauer, Heiko & Baines, Tim, 2019. "Digital servitization business models in ecosystems: A theory of the firm," Journal of Business Research, Elsevier, vol. 104(C), pages 380-392.
    13. Mithani, Murad A., 2023. "Scaling digital and non-digital business models in foreign markets: The case of financial advice industry in the United States," Journal of World Business, Elsevier, vol. 58(4).
    14. Teece, David J., 2018. "Profiting from innovation in the digital economy: Enabling technologies, standards, and licensing models in the wireless world," Research Policy, Elsevier, vol. 47(8), pages 1367-1387.
    15. Harkonen, Janne & Haapasalo, Harri & Hanninen, Kai, 2015. "Productisation: A review and research agenda," International Journal of Production Economics, Elsevier, vol. 164(C), pages 65-82.
    16. Álvaro Nicolás-Agustín & Daniel Jiménez-Jiménez & Francisco Maeso-Fernandez, 2021. "The role of human resource practices in the implementation of digital transformation," International Journal of Manpower, Emerald Group Publishing Limited, vol. 43(2), pages 395-410, October.
    17. Arnold Tukker, 2004. "Eight types of product–service system: eight ways to sustainability? Experiences from SusProNet," Business Strategy and the Environment, Wiley Blackwell, vol. 13(4), pages 246-260, July.
    18. Bag, Surajit & Pretorius, Jan Ham Christiaan & Gupta, Shivam & Dwivedi, Yogesh K., 2021. "Role of institutional pressures and resources in the adoption of big data analytics powered artificial intelligence, sustainable manufacturing practices and circular economy capabilities," Technological Forecasting and Social Change, Elsevier, vol. 163(C).
    19. S Tamer Cavusgil & Shaoming Zou & G M Naidu, 1993. "Product and Promoting Adaptation in Export Ventures: An Empirical Investigation," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 24(3), pages 479-506, September.
    20. Parry, Glenn & Bustinza, Oscar F. & Vendrell-Herrero, Ferran, 2012. "Servitisation and value co-production in the UK music industry: An empirical study of Consumer Attitudes," International Journal of Production Economics, Elsevier, vol. 135(1), pages 320-332.
    21. Ted London & Stuart L Hart, 2004. "Reinventing strategies for emerging markets: beyond the transnational model," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(5), pages 350-370, September.
    22. Nasiri, Mina & Ukko, Juhani & Saunila, Minna & Rantala, Tero, 2020. "Managing the digital supply chain: The role of smart technologies," Technovation, Elsevier, vol. 96.
    23. AlNuaimi, Bader K. & Kumar Singh, Sanjay & Ren, Shuang & Budhwar, Pawan & Vorobyev, Dmitriy, 2022. "Mastering digital transformation: The nexus between leadership, agility, and digital strategy," Journal of Business Research, Elsevier, vol. 145(C), pages 636-648.
    24. Leminen, Seppo & Rajahonka, Mervi & Wendelin, Robert & Westerlund, Mika & Nyström, Anna-Greta, 2022. "Autonomous vehicle solutions and their digital servitization business models," Technological Forecasting and Social Change, Elsevier, vol. 185(C).
    25. Halawa, Farouq & Dauod, Husam & Lee, In Gyu & Li, Yinglei & Yoon, Sang Won & Chung, Sung Hoon, 2020. "Introduction of a real time location system to enhance the warehouse safety and operational efficiency," International Journal of Production Economics, Elsevier, vol. 224(C).
    26. Jang, Kyeong Kook & Bae, Joonheui & Kim, Kyung Hoon, 2021. "Servitization experience measurement and the effect of servitization experience on brand resonance and customer retention," Journal of Business Research, Elsevier, vol. 130(C), pages 384-397.
    27. Gong, Cheng & Ribiere, Vincent, 2021. "Developing a unified definition of digital transformation," Technovation, Elsevier, vol. 102(C).
    28. Ali Ziaee Bigdeli & Oscar F. Bustinza & Ferran Vendrell-Herrero & Tim Baines, 2018. "Network positioning and risk perception in servitization: evidence from the UK road transport industry," International Journal of Production Research, Taylor & Francis Journals, vol. 56(6), pages 2169-2183, March.
    29. Jovanovic, Marin & Sjödin, David & Parida, Vinit, 2022. "Co-evolution of platform architecture, platform services, and platform governance: Expanding the platform value of industrial digital platforms," Technovation, Elsevier, vol. 118(C).
    30. Vendrell-Herrero, Ferran & Bustinza, Oscar F. & Opazo-Basaez, Marco & Gomes, Emanuel, 2023. "Treble innovation firms: Antecedents, outcomes, and enhancing factors," International Journal of Production Economics, Elsevier, vol. 255(C).
    31. Wirtz, Jochen & Fritze, Martin P. & Jaakkola, Elina & Gelbrich, Katja & Hartley, Nicole, 2021. "Service products and productization," Journal of Business Research, Elsevier, vol. 137(C), pages 411-421.
    32. Qun Tan & Carlos M. P. Sousa, 2013. "International Marketing Standardization," Management International Review, Springer, vol. 53(5), pages 711-739, October.
    33. Yu-Shan Chen & Ching-Hsun Chang, 2013. "The Determinants of Green Product Development Performance: Green Dynamic Capabilities, Green Transformational Leadership, and Green Creativity," Journal of Business Ethics, Springer, vol. 116(1), pages 107-119, August.
    34. Aquilante, Tommaso & Vendrell-Herrero, Ferran, 2021. "Bundling and exporting: Evidence from German SMEs," Journal of Business Research, Elsevier, vol. 132(C), pages 32-44.
    35. Ferran Vendrell-Herrero & Christian K. Darko & Emanuel Gomes & David W. Lehman, 2022. "Home-market economic development as a moderator of the self-selection and learning-by-exporting effects," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(7), pages 1519-1535, September.
    36. Shleha, Waleed & Vaillant, Yancy & Vendrell-Herrero, Ferran, 2023. "Entry mode diversity and closing commercial deals with international customers: The moderating role of advanced servitization," International Business Review, Elsevier, vol. 32(1).
    37. Michael A. Cusumano & Steven J. Kahl & Fernando F. Suarez, 2015. "Services, industry evolution, and the competitive strategies of product firms," Strategic Management Journal, Wiley Blackwell, vol. 36(4), pages 559-575, April.
    38. Jimmy Huang & Ola Henfridsson & Martin J. Liu, 2022. "Extending Digital Ventures Through Templating," Information Systems Research, INFORMS, vol. 33(1), pages 285-310, March.
    39. Lafuente, Esteban & Vaillant, Yancy & Rabetino, Rodrigo, 2023. "Digital disruption of optimal co-innovation configurations," Technovation, Elsevier, vol. 125(C).
    40. Sjödin, David & Parida, Vinit & Kohtamäki, Marko & Wincent, Joakim, 2020. "An agile co-creation process for digital servitization: A micro-service innovation approach," Journal of Business Research, Elsevier, vol. 112(C), pages 478-491.
    41. Chidlow, Agnieszka & Ghauri, Pervez N. & Yeniyurt, Sengun & Cavusgil, S. Tamer, 2015. "Establishing rigor in mail-survey procedures in international business research," Journal of World Business, Elsevier, vol. 50(1), pages 26-35.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bustinza, Oscar F. & Opazo-Basaez, Marco & Tarba, Shlomo, 2022. "Exploring the interplay between Smart Manufacturing and KIBS firms in configuring product-service innovation performance," Technovation, Elsevier, vol. 118(C).
    2. Tian, Jiamian & Coreynen, Wim & Matthyssens, Paul & Shen, Lei, 2022. "Platform-based servitization and business model adaptation by established manufacturers," Technovation, Elsevier, vol. 118(C).
    3. Wim Coreynen & Arjen van Witteloostuijn & Johanna Vanderstraeten, 2021. "Toward Servitized Research: An Integrated Approach for Sustainable Product-Service Innovation," Sustainability, MDPI, vol. 13(15), pages 1-21, July.
    4. Aquilante, Tommaso & Vendrell-Herrero, Ferran, 2021. "Bundling and exporting: Evidence from German SMEs," Journal of Business Research, Elsevier, vol. 132(C), pages 32-44.
    5. Vendrell-Herrero, Ferran & Bustinza, Oscar F. & Opazo-Basaez, Marco, 2021. "Information technologies and product-service innovation: The moderating role of service R&D team structure," Journal of Business Research, Elsevier, vol. 128(C), pages 673-687.
    6. Mosch, Philipp & Schweikl, Stefan & Obermaier, Robert, 2021. "Trapped in the supply chain? Digital servitization strategies and power relations in the case of an industrial technology supplier," International Journal of Production Economics, Elsevier, vol. 236(C).
    7. Weiyu Wang & Maria João Guedes, 2025. "Timing and experience in global markets: unraveling the impact of servitization on new manufacturing venture survival," International Entrepreneurship and Management Journal, Springer, vol. 21(1), pages 1-27, December.
    8. Huikkola, Tuomas & Kohtamäki, Marko & Rabetino, Rodrigo & Makkonen, Hannu & Holtkamp, Philipp, 2022. "Overcoming the challenges of smart solution development: Co-alignment of processes, routines, and practices to manage product, service, and software integration," Technovation, Elsevier, vol. 118(C).
    9. Schiavone, Francesco & Leone, Daniele & Caporuscio, Andrea & Lan, Sai, 2022. "Digital servitization and new sustainable configurations of manufacturing systems," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    10. Kohtamäki, Marko & Bhandari, Krishna Raj & Rabetino, Rodrigo & Ranta, Mikko, 2024. "Sustainable servitization in product manufacturing companies: The relationship between firm's sustainability emphasis and profitability and the moderating role of servitization," Technovation, Elsevier, vol. 129(C).
    11. Alberto de la Calle & Inmaculada Freije & Aitor Oyarbide, 2021. "Digital Product–Service Innovation and Sustainability: A Multiple-Case Study in the Capital Goods Industry," Sustainability, MDPI, vol. 13(11), pages 1-29, June.
    12. Jonas Wirth & Mirko Schneider & Leon Hanselmann & Kira Fink & Stephan Nebauer & Thomas Bauernhansl, 2024. "An Exploratory Analysis of the Current Status and Potential of Service-Oriented and Data-Driven Business Models within the Sheet Metal Working Sector: Insights from Interview-Based Research in Small a," Sustainability, MDPI, vol. 16(7), pages 1-19, March.
    13. David Hidalgo-Carvajal & Ruth Carrasco-Gallego & Gustavo Morales-Alonso, 2021. "From Goods to Services and from Linear to Circular: The Role of Servitization’s Challenges and Drivers in the Shifting Process," Sustainability, MDPI, vol. 13(8), pages 1-26, April.
    14. Lerch, Christian M. & Horvat, Djerdj & Jasny, Johannes, 2024. "When manufacturers turn into digital platform providers: A transformation model to understand the platformization pathway," International Journal of Production Economics, Elsevier, vol. 273(C).
    15. Jifei Xie & Lulu Ma & Jiamin Li, 2023. "Servitization, Digitalization or Hand in Hand: A Study on the Sustainable Development Path of Manufacturing Enterprises," Sustainability, MDPI, vol. 15(13), pages 1-17, July.
    16. Shen, Lei & Sun, Wanqin & Parida, Vinit, 2023. "Consolidating digital servitization research: A systematic review, integrative framework, and future research directions," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    17. Marie-Anne Le-Dain & Lamiae Benhayoun & Judy Matthews & Marine Liard, 2023. "Barriers and opportunities of digital servitization for SMEs: the effect of smart Product-Service System business models," Service Business, Springer;Pan-Pacific Business Association, vol. 17(1), pages 359-393, March.
    18. Shleha, Waleed & Vaillant, Yancy & Vendrell-Herrero, Ferran, 2023. "Entry mode diversity and closing commercial deals with international customers: The moderating role of advanced servitization," International Business Review, Elsevier, vol. 32(1).
    19. Vendrell-Herrero, Ferran & Bustinza, Oscar F. & Opazo-Basaez, Marco & Gomes, Emanuel, 2023. "Treble innovation firms: Antecedents, outcomes, and enhancing factors," International Journal of Production Economics, Elsevier, vol. 255(C).
    20. Yong Chen & Zhengjie Wu & Wenchao Yi & Bingjia Wang & Jianhua Yao & Zhi Pei & Jiaoliao Chen, 2022. "Bibliometric Method for Manufacturing Servitization: A Review and Future Research Directions," Sustainability, MDPI, vol. 14(14), pages 1-26, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:271:y:2024:i:c:s0925527324000859. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.