Gestão & Produção
Gestão & Produção
Artigo Original

Failure-to-service may lead industrial business to bankruptcy: drivers and ways to mitigate them

Luiz Reni Trento; Michele de Souza; Leandro Zvirtes; Giancarlo Medeiros Pereira

Downloads: 1
Views: 580


Abstract: In recent decades, the service strategy has increased in importance both in scientific research and on the agendas of industrial organizations. Service can help such companies to diversify their offerings, avoiding commoditization as well as increasing operational results. However, failures in the service process may generate significant negative impacts on these organizations. This case study investigates the drivers that contributed to the failure in service delivery in the industrial organization. Such drivers ultimately bankrupted the profit organization. The article uses the qualitative exploratory methodology and a unique, in-depth case study. The findings reveal the following drivers: assigning the operation to inexperienced employees; lack of ability to implement organizational needs; organizational alignment; and knowledge of how to disable complex operations. Also, the study contributes to the construction of a framework to mitigate such drivers. The framework is structured in service operation, decommissioning, and implementation.


Servitization, Service Infusion, Service failure, Bankruptcy


Aarikka-Stenroos, L., & Jaakkola, E. (2012). Value co-creation in knowledge intensive business services: a dyadic perspective on the joint problem solving process. Industrial Marketing Management, 41(1), 15-26.

Amarilla, R. S. D., & Iarozinski, A., No. (2018). Comparative analysis of the main business processes of building companies in civil construction. Gestão & Produção, 25(2), 269-283.

Baines, T. S., & Lightfoot, H. W. (2011) Towards an operations strategy for the infusion of product-centric services into manufacturing. In H. Demirkan, J. Spohrer & V. Krishna (Eds.), Service systems implementation (Service Science: Research and Innovations in the Service Economy). Boston: Springer.

Baines, T., Lightfoot, H., Peppard, J., Johnson, M., Tiwari, A., Shehab, E., & Swink, M. (2009). Towards an operations strategy for product‐centric servitization. International Journal of Operations & Production Management, 29(5), 494-519.

Bastl, M., Johnson, M., Lightfoot, H., & Evans, S. (2012). Buyer‐supplier relationships in a servitized environment. International Journal of Operations & Production Management, 32(6), 650-675.

Benedettini, O., Neely, A., & Swink, M. (2015). Why do servitized firms fail? A risk-based explanation. International Journal of Operations & Production Management, 35(6), 946-979.

Benedettini, O., Swink, M., & Neely, A. (2017). Examining the influence of service additions on manufacturing firms’ bankruptcy likelihood. Industrial Marketing Management, 60, 112-125.

Benyoussef Zghidi, A., & Zaiem, I. (2017). Service orientation as a strategic marketing tool: the moderating effect of business sector. Competitiveness Review, 27(1), 40-61.

Bikfalvi, A., Lay, G., Maloca, S., & Waser, B. R. (2013). Servitization and networking: large-scale survey findings on product-related services. Service Business, 7(1), 61-82.

Böhm, E., Eggert, A., & Thiesbrummel, C. (2017). Service transition: a viable option for manufacturing companies with deteriorating financial performance? Industrial Marketing Management, 60, 101-111.

Brax, S. A., & Visintin, F. (2017). Meta-model of servitization: the integrative profiling approach. Industrial Marketing Management, 60, 17-32.

Carlborg, P., & Kindström, D. (2014). Service process modularization and modular strategies. Journal of Business and Industrial Marketing, 29(4), 313-323.

Corbin, J. M., & Strauss, A. (1990). Grounded theory research: procedures, canons, and evaluative criteria. Qualitative Sociology, 13(1), 3-21.

Coreynen, W., Matthyssens, P., & Van Bockhaven, W. (2017). Boosting servitization through digitization: pathways and dynamic resource configurations for manufacturers. Industrial Marketing Management, 60, 42-53.

Denzin, N. K., & Lincoln, Y. S. (2000). Handbook of qualitative research (pp. 428-444). London: Thousand Oaks.

Devece, C., Palacios, D., & Martinez-Simarro, D. (2017). Effect of information management capability on organizational performance. Service Business, 11(3), 563-580.

Diógenes, J. R. F., Queiroz, F. C. B. P., Queiroz, J. V., Furukava, M., Lima, N. C., & Souza, G. H. S. (2019). Quality culture in the Brazilian car dealerships. Gestão & Produção, 26(2), e2046.

Dmitrijeva, J., Schroeder, A., Ziaee Bigdeli, A., & Baines, T. (2020). Context matters: how internal and external factors impact servitization. Production Planning and Control, 31(13), 1077-1097.

Eggert, A., Hogreve, J., Ulaga, W., & Muenkhoff, E. (2014). Revenue and profit implications of industrial service strategies. Journal of Service Research, 17(1), 23-39.

Eisenhardt, K. M. (1989). Building theories from case study research. Academy of Management Journal, 14(4), 532-550.

Finne, M., Brax, S., & Holmström, J. (2013). Reversed servitization paths: a case analysis of two manufacturers. Service Business, 7(4), 513-537.

Forkmann, S., Ramos, C., Henneberg, S. C., & Naudé, P. (2017). Understanding the service infusion process as a business model reconfiguration. Industrial Marketing Management, 60, 151-166.

Gebauer, H., & Kowalkowski, C. (2012). Customer‐focused and service‐focused orientation in organizational structures. Journal of Business and Industrial Marketing, 27(7), 527-537.

Gebauer, H., Edvardsson, B., Gustafsson, A., & Witell, L. (2010). Match or mismatch: strategy-structure configurations in the service business of manufacturing companies. Journal of Service Research, 13(2), 198-215.

Gebauer, H., Fleisch, E., & Friedli, T. (2005). Overcoming the service paradox in manufacturing companies. European Management Journal, 23(1), 14-26.

Gonzalez, R. V. D., & Martins, M. F. (2015). Competências habilitadoras da melhoria contínua: estudo de casos em empresas do setor automobilístico e de bens de capital. Gestão & Produção, 22(4), 725-742.

Huikkola, T., & Kohtamäki, M. (2017). Solution providers’ strategic capabilities. Journal of Business and Industrial Marketing, 32(5), 752-770.

Huikkola, T., Rabetino, R., Kohtamäki, M., & Gebauer, H. (2020). Firm boundaries in servitization: interplay and repositioning practices. Industrial Marketing Management, 90, 90-105.

Kamal, M. M., Sivarajah, U., Bigdeli, A. Z., Missi, F., & Koliousis, Y. (2020). Servitization implementation in the manufacturing organisations: classification of strategies, definitions, benefits and challenges. International Journal of Information Management, 55(July), 102206.

Kamp, B., Ochoa, A., & Diaz, J. (2017). Smart servitization within the context of industrial user–supplier relationships: contingencies according to a machine tool manufacturer. International Journal on Interactive Design and Manufacturing, 11(3), 651-663.

Kindström, D., & Kowalkowski, C. (2014). Service innovation in product-centric firms: a multidimensional business model perspective. Journal of Business and Industrial Marketing, 29(2), 96-111.

Kindström, D., Kowalkowski, C., & Sandberg, E. (2013). Enabling service innovation: a dynamic capabilities approach. Journal of Business Research, 66(8), 1063-1073.

King, N. (2012). Doing template analysis. In G. Symon & C. Cassell (Eds.), Qualitatve organizational research: core methods and current challenges. London: Sage.

Kohtamäki, M., Rabetino, R., & Einola, S. (2017). Paradoxes in servitization. In M. Kohtamäki, T. Baines, R. Rabetino & A. Z. Bigdeli (Eds.), Practices and tools for servitization: managing service transition (pp. 185-199). Cham: Palgrave Macmillan.

Kowalkowski, C., Gebauer, H., & Oliva, R. (2017a). Service growth in product firms: past, present, and future. Industrial Marketing Management, 60, 82-88.

Kowalkowski, C., Gebauer, H., Kamp, B., & Parry, G. (2017b). Servitization and deservitization: overview, concepts, and definitions. Industrial Marketing Management, 60, 4-10.

Kowalkowski, C., Kindström, D., Alejandro, T. B., Brege, S., & Biggemann, S. (2012). Service infusion as agile incrementalism in action. Journal of Business Research, 65(6), 765-772.

Kowalkowski, C., Windahl, C., Kindström, D., & Gebauer, H. (2015). What service transition? Rethinking established assumptions about manufacturers’ service-led growth strategies. Industrial Marketing Management, 45(1), 59-69.

Kreye, M. E. (2017a). Can you put too much on your plate? Uncertainty exposure in servitized triads. International Journal of Operations & Production Management, 37(12), 1722-1740.

Kreye, M. E. (2017b). Relational uncertainty in service dyads. International Journal of Operations & Production Management, 37(3), 363-381.

Lenka, S., Parida, V., Sjödin, D. R., & Wincent, J. (2018). Towards a multi-level servitization framework. International Journal of Operations & Production Management, 38(3), 810-827.

Lin, Y., Luo, J., Zhou, L., Ma, S., & Zhou, Z. (2011). Servitization strategy: Strategic priority, capacity requirement, and organizational feature. In Proceedings of 2011 IEEE International Conference on Service Operations, Logistics and Informatics, SOLI 2011 (pp. 191-196). New York: IEEE.

Luoto, S., Brax, S. A., & Kohtamäki, M. (2017). Critical meta-analysis of servitization research: constructing a model-narrative to reveal paradigmatic assumptions. Industrial Marketing Management, 60, 89-100.

Lütjen, H., Tietze, F., & Schultz, C. (2017a). Service transitions of product-centric firms: an explorative study of service transition stages and barriers in Germany’s energy market. International Journal of Production Economics, 192, 106-119.

Lütjen, H., Tietze, F., & Schultz, C. (2017b). Service transitions of product-centric firms: an explorative study of service transition stages and barriers in Germany’s energy market. International Journal of Production Economics, 192, 106-119.

Mantere, S., & Ketokivi, M. (2013). Reasoning in organization science. Academy of Management Review, 38(1), 70-89.

Martin, S., Foulonneau, M., Turki, S., Ihadjadene, M., Paris, U., & Tudor, P. (2013). Risk analysis to overcome barriers to open data. Electronic Journal of E-Government, 11(1), 348-359.

Medeiros, S. A., Christino, J. M. M., Gonçalves, C. A., & Gonçalves, M. A. (2020). Relationships among dynamic capabilities dimensions in building competitive advantage: a conceptual model. Gestão & Produção, 27(1), e3680.

Miles, M. B., Huberman, M. A., & Saldana, J. (2014). Qualitative data analysis: a methods sourcebook. Los Angeles: SAGE.

Mustak, M. (2014). Service innovation in networks: a systematic review and implications for business-to-business service innovation research. Journal of Business and Industrial Marketing, 29(2), 151-163.

Neely, A. (2009). Exploring the financial consequences of the servitization of manufacturing. Operations Management Research, 1(2), 103-118.

Owen Raddats, C., & Burton, J. (2014). Creating multi-vendor solutions: the resources and capabilities required. Journal of Business and Industrial Marketing, 29(2), 132-142.

Peillon, S., Dubruc, N., & Mansour, M. (2018). Service and customer orientation of corporate culture in a French manufacturing SME. Procedia CIRP, 73, 91-95.

Raddats, C., Zolkiewski, J., Story, V. M., Burton, J., Baines, T., & Ziaee Bigdeli, A. (2017). Interactively developed capabilities: evidence from dyadic servitization relationships. International Journal of Operations & Production Management, 37(3), 382-400.

Reim, W., Parida, V., & Sjödin, D. R. (2016). Risk management for product-service system operation. International Journal of Operations & Production Management, 36(6), 665-686.

Rhodes, J., Lok, P., Loh, W., & Cheng, V. (2016). Critical success factors in relationship management for services outsourcing. Service Business, 10(1), 59-86.

Rodriguez, M., Doloreux, D., & Shearmur, R. (2016). Innovation strategies, innovator types and openness: a study of KIBS firms in Spain. Service Business, 10(3), 629-649.

Rönnberg Sjödin, D., Parida, V., & Kohtamäki, M. (2016). Capability configurations for advanced service offerings in manufacturing firms: using fuzzy set qualitative comparative analysis. Journal of Business Research, 69(11), 5330-5335.

Siggelkow, N. (2007). Persuasion with case studies. Academy of Management Journal, 50(1), 20-24.

Silva, J. C., Longaray, A. A., Munhoz, P. R., & Castelli, T. M. (2019). Using the view of Business Process Management (BPM) for process improvement in the shipping industry and offshore construction sector: a case study of the Rio Grande (RS) naval pole. Gestão & Produção, 26(4), e3909.

Smith, L., Maull, R., & C.L. Ng, I. ( (2014). Servitization and operations management: a service dominant-logic approach. International Journal of Operations & Production Management, 34(2), 242-269.

Story, V. M., Raddats, C., Burton, J., Zolkiewski, J., & Baines, T. (2017). Capabilities for advanced services: a multi-actor perspective. Industrial Marketing Management, 60, 54-68.

Valtakoski, A. (2017). Explaining servitization failure and deservitization: a knowledge-based perspective. Industrial Marketing Management, 60, 138-150.

Valtakoski, A., & Witell, L. (2018). Service capabilities and servitized SME performance: contingency on firm age. International Journal of Operations & Production Management, 38(4), 1144-1164.

Vandermerwe, S., & Rada, J. (1988). Servitization of business: adding value by adding services. European Management Journal, 6(4), 314-324.

Werlang, N. B., & Rossetto, C. R. (2019). The effects of organizational learning and innovativeness on organizational performance in the service provision sector. Gestão & Produção, 26(3), e3641.

Yildiz, A. E., Dikmen, I., Birgonul, M. T., Ercoskun, K., & Alten, S. (2014). A knowledge-based risk mapping tool for cost estimation of international construction projects. Automation in Construction, 43, 144-155.

Yin, R. K. (2009). Case study research: design and methods. Thousand Oaks: Sage.

Yin, R. K. (2014), Case study research: design and methods: design and methods. London: Sage. Retrieved in 2019, December 9, from

Ziaee Bigdeli, A., Bustinza, O. F., Vendrell-Herrero, F., & Baines, T. (2018). Network positioning and risk perception in servitization: evidence from the UK road transport industry. International Journal of Production Research, 56(6), 2169-2183.

Zimmer, M., Salonen, A., & Wangenheim, F. V. (2020). Business solutions as market signals that facilitate product sales. Industrial Marketing Management, 91, 30-40.

62309ca2a9539531922bcd24 gp Articles

Gest. Prod.

Share this page
Page Sections