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Challenge or opportunity? A case of tire rental servitization from financial and channel perspectives

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  • Myungjin Hyun

    (Hanyang University)

  • Jieun Kim

    (Hanyang University)

Abstract

Using a case study of a Korean tire manufacturing firm that became a tire rental servitization provider during 2015–2019, this study disentangles revenue and cost implications and highlights moderating factors (i.e., the internal and external channel conflicts) that hinder firm performance. The study mitigates the inherent time lags of the firm’s product and service portfolio variables and analyzes financial data. The servitization and non-servitization revenue streams are independent and non-cannibalizing. Initial profitability is small, given the operational costs increase with the service growth. Internal organizational change affects servitization performance, challenging manufacturing firms to maintain servitization profitability.

Suggested Citation

  • Myungjin Hyun & Jieun Kim, 2021. "Challenge or opportunity? A case of tire rental servitization from financial and channel perspectives," Service Business, Springer;Pan-Pacific Business Association, vol. 15(1), pages 1-17, March.
    • Handle: RePEc:spr:svcbiz:v:15:y:2021:i:1:d:10.1007_s11628-020-00433-6
    DOI: 10.1007/s11628-020-00433-6
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    References listed on IDEAS

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    Cited by:

    1. Saad Zighan & Moheeb Abualqumboz, 2022. "Dual focus: service-product orientation to manage the change paradox following servitization strategy," Service Business, Springer;Pan-Pacific Business Association, vol. 16(1), pages 29-55, March.
    2. Håkon Osland Sandvik & David Sjödin & Thomas Brekke & Vinit Parida, 2022. "Inherent paradoxes in the shift to autonomous solutions provision: a multilevel investigation of the shipping industry," Service Business, Springer;Pan-Pacific Business Association, vol. 16(2), pages 227-255, June.

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