Service Networks as an Enabler for Servitization : Challenges that emerge and capabilities needed when operating in a service network

Abstract: Purpose - The purpose of this study is to explore the challenges that emerge and the capabilities needed when operating within a service network to achieve servitization. In doing so, we provide a contingency framework that presents seven capabilities that mitigate five potential challenges that emerge when operating in a service network, enabling a smoother journey towards servitization. Method - To fulfill the purpose of the study, an explorative single case study research approach has been employed at a Swedish company that acts as an external service facilitator involved in a service network. Consisting of an incumbent OEM firm of consumer durables and construction equipment based in Sweden and its retailers. In total, 22 interviews were conducted in three waves with actors representing the whole network, providing a multi-actor perspective on the network’s operations. These interviews were then analyzed using a thematic analysis. Findings - The study has resulted in seven presented capabilities: Communication, Collaboration, Product and customer knowledge, Adaptability, Leadership, Digitalization, and Innovation. As well as five identified challenges: Implementing a new mindset, Resistance to change, Managing multiple actors, Adopting a new technology, and Identifying the right partners that emerge when operating in a service network. These were then matched in a contingency framework in order to determine the capabilities' proficiency in mitigating each challenge. Theoretical contributions - This study adds to prior literature by applying a multi-actor perspective, highlighting the servitization journey of service networks. We complement current findings by proposing that service network actors, indeed, play a crucial role in a manufacturer's servitization efforts. Furthermore, the study extends prior literature's findings that actors experience different challenges in their servitization efforts depending on their position within the service network. Lastly, we build on prior literature by highlighting important capabilities needed within a service network. Practical contributions - This study contributes to managers' understanding of operating in a service network, which could aid managers to become proactive rather than reactive in their daily operations. Our findings aid managers in being attentive to the five challenges that we have presented, as well as ensuring that the capabilities that can mitigate these are developed within the service network.  Limitations and future research - The study has been conducted as a single case study in the consumer durables industry in the initial stages of servitization. Therefore, future research could benefit from exploring a wider range of industries, collecting a wider set of data to both confirm the identified capabilities and challenges, as well as to finding new ones.