Servitization strategy and financial performance of manufacturing SMEs: a necessary alignment between the service concept and the operational service system

Abstract : This paper aims to investigate the relationship between servitization strategies and firms’ financial performances. We postulate that it is the right alignment between the firm’s operational service system and the type of service strategy (viewed as the service concept implemented) that is likely to increase the firm’s overall profitability. We built a research model testing the impact of the type of service concept on the relationship between the firm’s operational service system and its financial performance. Globally, the more developed the service concept, the stronger the positive relationship between the dimensions of the operational service system and the firm’s financial performance indicators. The model is tested on data gathered from a survey conducted in face-to-face interviews with CEOs of 184 French manufacturing SMEs offering services, and it is completed with financial indicators. Results indicate that to perform, firms must focus on different operational service dimensions according to the service concept implemented. While this is not relevant for a company proposing an added services-based strategy to invest in a complex operational service system, firms adopting a reconfiguration-based service strategy should focus on the service delivery system as firms offering PSS must develop a high level of service culture.