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Servitization has become an increasingly popular phenomenon within both academia and practice. Servitization is generally seen as the transition from selling a product to providing a service (Vandermerwe & Rada, 1988; Baines et al, 2009b). Inherent in this transition is the appreciation that an organisation’s focus shifts from value in exchange to value in use (Baines et al, 2007). In acknowledging this shift, it is evident that there is a move away from the traditional transactional exchange between firm and customer, to a longitudinal relationship centred on product service systems (Smith et al, 2014).

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Many manufacturing firms have now designated service business units and provide a range of service types as an extension of their manufacturing capabilities. The rationale behind this is that as manufacturing revenues have begun to decline, servitization provides an opportunity for organisations to create additional value and improve their competitive advantage through the provision of services (Baines et al, 2009b). This provides an opportunity to improve profit margins, create customer lock in and enable greater differentiation rather than competing with others on cost alone (Gebauer et al, 2011; Bustinza et al, 2015). As a result of this increased attention, facilitating servitization has recently become a service research priority (Ostrom et al, 2015).

The servitization literature has inherently focussed on the product-centric servitization (Baines et al, 2009a) where the physical asset is central and the services provided are wrapped around and coupled to the existing asset (Baines et al, 2009b; Ng & Briscoe, 2012). Thus, the service activities were seen as the phenomenon of interest for the academic community and this is reflected in the vast body of knowledge contained within academic journals. For instance, Baines et al (2009a) stress that the addition of service activities necessitates that organisations need to transform existing organisational structures and processes to accommodate the differences between products and services. This has led to a number of scholars focussing on business model innovation and organisational, structural and cultural changes brought about by the new service activities (e.g., Martinez et al, 2010; Hypko et al, 2010; Selviaridis & Wynstra, 2014; Vendrell- Herrero et al, 2014; Bustinza et al, 2015; 2017; Visnijc et al, 2016).

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In terms of focus and a shared understanding of what servitization is, the academic community agree that Vandermerwe and Rada’s (1988) definition is one of the first and most comprehensive definitions of servitization. Whilst not all disciplines (i.e., marketing, design, operations management, ecology etc) utilise the same label, they predominantly align with the original definition whereby manufacturing firms ‘add’ services to existing product offerings and create a value proposition that is a mixture of both product and service components. In addition, Vandermerwe and Rada’s original definition explicitly pointed toward an increased customer focus.

An analysis of the literature presents some key defining features associated with the three dominant terms used within the management community; servitization, service infusion and product service systems (PSS). A PSS can be defined as ‘a market proposition that extends the traditional functionality of a product by incorporating additional services (Baines et al, 2007. PP. 1544). First, servitization and service infusion are arguably the most interchangeable as they are both associated with the ‘transition’ from a manufacturer to a service provider. That is, both research streams are concerned with the continuum of which manufacturers move along as they ‘servitize’ or ‘infuse services’ into their existing business. This notion of a continuum implies that there are varying degrees of product and service configurations across the continuum and it is these configurations that make up the different types of PSS. Baines et al (2009a) explicitly state this and make clear reference to PSS’s in their definition of servitization. Thus, it can be argued that servitization and service infusion are associated with the transition from manufacturer to service provider whilst the PSS is the value proposition offered by

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the firm to the customer and the PSS can vary in degree of product and service components. This is the understanding of servitization and PSS that will be used within this thesis.

Within the literature, it appears that most authors agree that servitization was based on an emerging phenomenon within industry and whilst studied from different disciplines, they all share common characteristics and principles. First, they are all underpinned by the acceptance that manufacturing firms are paying more attention to service and different forms of value proposition are made up of varying degrees of product and service components (e.g., Robinson et al, 2002; Mont, 2002; Oliva & Kallenberg, 2003; Tukker, 2004; Ulaga & Reinartz, 2011; Baines & Lightfoot, 2013). Second, is the common understanding that the shift to service embodies a departure from a value-in-exchange to value-in-use and customer centricity (Green et al, 2017). Third, the appreciation of the increasing importance of technology as an enabler of service is gaining considerable popularity. Neely (2008) states that as technology continues to advance, it will not only be an enabler for service, but a driver for new types of service. This is reflected in Dinges et al (2015) report on technologies in servitization. Fourth, that the transition from manufacturing to service and the provision of a PSS could change the roles and relationships between the ‘firm’ and ‘customer’. In shifting from an exchange mind set to one based on use, reflects the customer gaining value in the use of the offering, as opposed to the ownership of the offering and that this change requires reconsideration of each party’s role and relationship (Ng et al, 2013). Finally, and one of the more recent themes to emerge within the literature is that the design of

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a PSS (Morelli, 2006; Maussang et al, 2009), and in particular the role and understanding of the physical asset within servitization, requires new tools, methods and theories than when the offering was designed for exchange (Ng & Nurudupati, 2010; Smith et al, 2014; Green et al, 2017). This means that servitization may force a re-design of the physical asset itself to incorporate human activities associated with use and context (Ng, 2013; Smith et al, 2014; Green et al, 2017). Given its relative newness, this last theme has received little empirical attention within the literature.