Title: The logic for increasing service revenue in product manufacturing companies

Authors: Heiko Gebauer

Addresses: Institute of Technology Management, Dufourstrasse 40a, CH-9000 St. Gallen, Switzerland

Abstract: To respond to increasing challenges from competitors, manufacturing companies have developed a growing interest in extending their service business. They have started initiatives to generate revenue growth through services. However, creating service revenue is not easy. The majority of manufacturing companies still earn a relatively small share of their total revenue through services. If services were fundamentally ineffective in generating revenue, it would be easy to explain why companies struggle to succeed in deriving a high percentage of overall revenue from services. It would not explain, however, why some companies have, in the past, achieved a high share of service revenue. Based on five focus groups and ten in-depth bi-polar case studies, we attempt to provide a better understanding of how manufacturing companies can increase their service revenue. We illustrate the implicit logic of increasing service revenue, the keys to success and fundamental dimensions for implementing them.

Keywords: service revenue; managerial motivation; service strategy; organisational arrangements; service management; manufacturing companies.

DOI: 10.1504/IJSOM.2007.013462

International Journal of Services and Operations Management, 2007 Vol.3 No.4, pp.394 - 410

Published online: 30 Apr 2007 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article