1 Introduction

The process of servitization involves a growing number of manufacturing companies that are strategically choosing to couple their traditional product offering with service components. They aim to renew and reorganize their business models to respond better to market demand and eventually gain market share while increasing their revenues. The typical offering of such companies—generally referred to as servitised companies—is a product-service systems (PSS), i.e. an integrated solution of products and services [40].

Quantitative studies on the extent and relevance of the servitization process are usually limited to specific manufacturing sectors or geographic markets, due to the scarcity of databases containing data of companies across multiple countries and industrial sectors [13]. The most important works combining the analysis of a substantial number of companies distributed worldwide appear to be the preliminary quantification of the process proposed by Neely [41, 42]. Relying on the analysis of balance data of a sample of companies retrieved from the OSIRIS database, these analyses are mainly focused on the economic impact of the process. The author however points out to several limitations of his study: (i) there is sample heterogeneity in terms e.g. of size, core business and geographical location and (ii) the study concerns a small number of nations, some represented by a non-significant number of companies.

An analysis of the global extent of servitization process is herein proposed, aimed at overcoming these limits. According to the conceptual scheme suggested by Neely for the discrimination of servitised companies, a worldwide sample of an unprecedented number of manufacturing companies from all over the world has been analysed to quantify the portion of servitised companies, also discriminating the services offered.

This paper provides three major contributions: (i) an updated picture of the extent of the servitization process in the world, by analysing secondary data related to more than 190,000 manufacturing companies in 114 countries; (ii) an investigation of the servitization process with respect to different factors, such as the geographical location, company dimension and commodity sector; (iii) the introduction of two indicators to perform an analysis of company positioning with respect to its competitors.

The rest of the paper is organised as follows. Section 2 contains a literature review concerning the servitization process. A taxonomy of product-related services is defined in Section 3, while the method of analysis is described in Section 4. Results are presented in Section 5, while Section 6 proposes an approach to analyse company positioning. The concluding section summarizes the main contributions focusing on the benefits, limitations and possible developments.

2 Literature review

The term servitization was first used by Vandermerwe and Rada in 1988 to describe the processes of adding value to product offerings through services [51]. Over the past 30 years, a growing body of literature has described the servitization process from a multitude of points of view [7]. Existing research recognises the critical role played by services in the achievement of a sustainable competitive advantage and in the improvement of manufacturing companies’ performance [13]. The following sections focus on the results of previous studies concerning the service infusion process, opportunities and barriers arising from the shift towards service-oriented strategies and the measurement of the extent of the servitization process.

2.1 The service infusion process

Various studies addressed the transition from product-oriented to service-oriented strategies in manufacturing companies [30, 38, 48]. The term “service infusion” has been used by Kowalkowski et al. [29] to define the process whereby the relative importance of the service offerings of a company increases [17, 28, 29].

Peillon et al. [46] proposed a conceptual framework to investigate a servitization path in industry; their study showed that the servitization path is typically not reversible. Brax and Visintin [10] defined eight meta-models of servitised value constellation: (i) products with limited support, (ii) installed and supported products, (iii) complementary services, (iv) product-oriented solutions, (v) systems leasing, (vi) operating services, (vii) managed service solutions and (viii) total solutions.

Recently, Mastrogiacomo et al. [38] defined a servitization scale with the aim of providing a conventional tool to assess the servitization level of different manufacturing companies. The shift towards service-oriented business models in manufacturing companies resulted to be associated with internal changes that mainly affect five servitization dimensions: revenue strategy (i.e. how revenues are generated), design (i.e. the objectives and objects of the design activities), corporate organization (i.e. the integration of different organizational functions and business units), quality control and management (i.e. the focus of quality activities) and customer relationship (i.e. the extent of interactions between a company and customers).

2.2 Opportunities and barriers for the transition to services

Existing research recognises several factors as drivers and barriers for the implementation of the servitization strategies [2, 31, 49].

Many reasons may explain why manufacturing companies are going to undertake a transition towards service provision: (i) services are found to increase the degree of differentiation from competitors [13, 15], setting barriers to competition [45] and improving product reliability [35]; (ii) the establishment of a long-lasting relationship with customers is positively associated with the level of customer loyalty [9, 22, 53]; and (iii) the offering of a network of services may positively influence the overall perception of quality [8]. Moreover, services are usually more profitable than products for manufacturing companies [16, 19, 27].

However, the implementation of service strategies creates not only opportunities, but also barriers for manufacturing companies [4, 52]. In this regards, Martinez et al. [36] identified five categories of challenges: (i) the need for a product-service culture for traditional manufacturing companies, (ii) the ability to manage the delivery of integrated offering through a plurality of touch-points, (iii) the acquisition of the internal processes and capabilities in order to compete in new service markets, (iv) the alignment of mindset and understanding towards service provision and (v) the ability to build new supplier relationships and to cooperate in innovative service ecosystems.

2.3 Previous studies on the extent of the servitization process

There is a relatively small body of literature that is concerned with the assessment of the servitization extent. To date, some of the most relevant works addressing this issue have been carried out by Neely and colleagues [41, 42, 44]. The secondary data analysis is based on the information of a sample of 12,500 publicly listed manufacturing companies drawn from the OSIRIS database [12]. The major outcome of these studies is a comparison of the servitization extent in 27 countries, with a view on the evolution trend from 2007 to 2011 (see Fig. 1). The number of analysed companies per country ranges from 62 (Greece) to 2590 (USA).

Fig. 1
figure 1

Analysis of servitization extent in 27 countries of the world [44]. Per each country, the graph shows the percentage of servitised companies

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Neely et al. [44] also provide insights on (i) the different product-related services offered by manufacturing companies, (ii) the relationship between the servitization process and company size (number of employees) and (iii) the impact of the servitization process on economic and financial performance indicators.

Another important analysis of the servitization process has been carried out by Dachs et al. [14] who focussed their attention on European manufacturing companies. Their quantitative study is based on the data contained in the European Manufacturing Survey, a firm-level primary database collected through a questionnaire, which contains, among others, information on company business model and portfolio of product-related services [21]. Their results evidence that around 86% of the 3693 examined companies offer at least a service (see Table 1 for the data concerning the different European countries). It is noteworthy how their results differ greatly from the ones proposed by Neely et al. [44]. The differences can be partially explained by the different samples of analysed companies (only publicly listed companies in Neely et al. [44]) and by the different data collection method (primary vs. secondary data).

Table 1 Analysis of servitization extent in nine European countries [14]
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Dachs et al. [14] also concluded that (i) national differences in servitization play a minor role, (ii) firm size is relevant and (iii) the degree of servitization is not linearly linked to firm size; they found a U-shaped distribution.

Léo and Philippe [33] conducted a similar study focusing their attention on the association between services and products among French exporters. Their analysis found that around 30% of French exporters couple their product offering with at least one service. Seventy percent of them offer more than one single type of service.

Huxtable and Schaefer [26] analysed the extent of the servitization process in UK, concluding that 61% are offering a product-service mix and 39% generate revenue only from goods. Their analysis highlights that in 75% of the firms, services generate less than 40% of the revenues.

Other studies attempted to quantify the extent of the servitization process and its dynamics applying empirical approaches based on a limited number of real cases [1, 3, 6, 34, 43, 47, 54]. The main weakness of these works is the relatively limited size of the sample of companies. Also, a previous work by the same authors of this paper analysed secondary data from AIDA database [11] with the purpose of presenting a picture of the extent of the servitization process limited to Italian manufacturing companies [37].

The majorities of the studies regarding the extent of the servitization process are focused on European countries, but it is clear that all the world economies are interested. Many evidences show that also emergent economies in Africa, Asia and South America are following the route taken by other countries [20, 53].

Three elements emerge from the reviewed studies:

  1. (i)

    The analysis of the servitization extent is available for a limited number of countries and often based on the study of a small sample of companies. This limitation is due to the method of analysis adopted, which often uses surveys, questionnaires or interviews. Clearly, these approaches can be applied to the study of a limited set of companies, often located in specific geographical contexts.

  2. (ii)

    There is a high variance between results presented by the different studies; this is due to the heterogeneous nature of the aforementioned studies both from a methodological and chronological point of view.

  3. (iii)

    There is no agreement on the role and interaction of the structural enablers (company size, geographical location, commodity sector) in the implementation of servitization strategies.

The aim of the study hereafter presented is to address and overcome the aforementioned limitations.

3 Product-related services

The scientific literature proposes a number of different classifications of product-related services, depending on the type of service, the nature of the company, the time of the offer, its purpose, the nature of the interaction between customer and provider, etc. [24]. Summarizing the different proposals, product-related services can be clustered in the following macro typologies [37]:

  • Consultancy services: the manufacturing company shares his practical experience in the field to advise and assist customers.

  • Design and development services: the company customizes the design and development of the product for third parties so as to meet the specific needs of their customers.

  • Retail and distribution services: the manufacturing company directly promotes and distributes its products to the end customers, exports it to foreign countries and sells it. These services do not include those of the simple sale of goods produced without an articulated organization to support the customer service.

  • Financial services: the company directly manages long-term credits related to its products, deferring their payment or proposing rental or leasing contracts.

  • Logistic services: the company provides delivery, transport and/or storage services for its or customer’s products, components or raw materials.

  • Installation and setup services: the company installs and tests its products, also training the personnel in charge of their use.

  • Management and operating services: the company operates its products throughout their life cycle, the customer receives only the benefits of the use of the product without having to run it.

  • Maintenance and support services: the company offers the necessary support services to solve potential operational problems during the life cycle of the product, offering spare parts and skilled labour capable of repairing or updating the product features. Possible support services are also those that allow the regular functioning of the product.

  • Disposal and conversion services: at the end of the life cycle of the product, the manufacturing company deals with the demolition, conversion or recycling of the product materials.

As shown in Table 2, this taxonomy can be related to a selection of the most significant ones available in the literature [25, 39, 45, 50]. Mathieu [39] distinguished between three types of services: customer services, product service and service as a product. Customer service facilitates the interaction between customer and seller (e.g. online tutorial). Product services directly support the product (e.g. technical assistance). Services as a product are independent from the product (e.g. consulting services). Oliva and Kallenberg [45] proposed to classify product-related services into four categories: (a) basic installed base services, (b) maintenance services, (c) professional services and (d) operational services. Tukker [50] provided a classification into three classes: (i) product-oriented services, including services that are needed during the usage phase of the product and advice and consultancy service; (ii) use-oriented services, including services where the ownership of the product is not transferred to the customer that pays for the use of the product; and (iii) result-oriented services, in which the provider maintains product ownership, manages the asset and distributes product results. Gebauer et al. [25] proposed a classification where nine categories of product-related services are selected considering the whole value chain of the product (see Table 2).

Table 2 Relationship between the proposed and other taxonomies concerning product-related services [25, 39, 45, 50]
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4 Method of analysis

Data used for the proposed analysis were retrieved in September 2018 from the ORBIS database which contains personal, commercial and financial data of about 275 million companies across the globe [12]. Only manufacturing companies with more than 50 employees were considered, thus resulting in a sample of 190,407 companies. In detail, the analysed sample contains companies located in 114 different countries: 35% are large companies (number of employees greater than 250), while the remaining 65% are medium-sized enterprises (number of employees between 50 and 250). Small companies were excluded from the study due to the limited availability of reported information. In order to select manufacturing companies only, the ORBIS query was limited to companies belonging to NACE (Nomenclature statistique des activités économiques dans la Communauté Européenne) sectors classified with codes from 10 to 32 (see Table 3).

Table 3 Detail of NACE rev. 2 sectors from 10 to 32 [18]
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Among other information, the ORBIS database provides a textual overview of the main activities and trades characterizing each company. In accordance with the method proposed by Neely [42], this information has been processed for discriminating between servitised, pure manufacturing and pure service companies. In detail, an automatic keyword research within the textual overview has been implemented. To this end, two different sets of keywords have been defined to describe manufacturing and service activities (see Table 8 in Annex 3). To build the keyword list, the authors analysed a preliminary sample of 250 overviews randomly drawn from the set of analysed companies. An iterative procedure was then used to enrich the list of keywords: in each iteration, an additional sample of 100 company overviews was analysed and the result of the automatic categorization was compared with information retrieved from other sources (white papers, corporate web sites and public databases). The iterative procedure was stopped when the addition of an overview sample did not result in any change in the list of keywords. The list of keywords was then extended with variants and synonyms to get the final set. In this sense, this approach is similar to the one proposed in a previous work of the same authors [37]. The keywords related to service activities were further clustered into the product-related services discussed in Section 3 (see Table 8 in Annex 3).

The defined sets of keywords were then used to scan the textual overview of the complete sample of companies. Analysed companies were classified as pure manufacturing, or pure service when respectively containing keywords belonging to the relevant keyword set only. Those companies including keywords belonging to both the sets were classified as servitised. Figure 2 provides a schematization of the method, also showing the distinction between product-related service typologies. see Table 7 in Annex 2 for a detailed example of the application of the method.

Fig. 2
figure 2

Schematization of the classification method. Inputs of the method are (1) the textual overview of the company activities and (2) two set of keywords characterizing service and manufacturing activities (see Table 8 in Annex 3). A keywords research within the textual overview allowed to distinguish between manufacturing, pure service and servitised companies

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The results of the automatic classification were validated by comparing the assigned category of a randomly selected sample composed of 200 companies with a manual category assignment. The manual category assignments were performed using information retrieved also from other resources (white papers, corporate web sites and public databases). The validation showed that the automatic process produced a category assignment which did not differ significantly from the results obtained by a manual categorization: from the sample of 200 companies, we found one false positive (categorizing a company as servitised when it is not) and two false negatives (categorizing a company as not servitised when it is) only.

5 Results

The sample analysis shows an interesting aggregate result: 72790 out of 190,407 (38%) are servitised companies; 113,861 (60%) are pure manufacturing companies and 3756 (2%) are pure service companies. Typically, companies in this latter category are originally from the manufacturing sector and eventually changing business model, deciding to limit their activities to the provision of services.

5.1 The worldwide extent of servitization

Figure 3 presents a qualitative overview of the achieved result in the analysed countries: darkest areas of the map correspond to countries presenting the highest percentage of servitised companies. Note that the map only considers countries with at least 100 analysed companies. For a detail of the results per country, we refer the reader to Tables 6 in the Annex 1.

Fig. 3
figure 3

World map of servitization. Dotted areas distinguish countries not covered by the study. Only countries with at least 100 manufacturing companies are considered

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European countries, North America and Oceania are the most servitised geographical areas. Focusing on the single country, China shows a significant percentage of servitised companies (38%), with a radical increase from the result reported by Neely [42] in 2011 (19%) and 2007 (1%). Not surprisingly, UK and USA are among the most servitised countries, presenting a percentage of servitised companies respectively of 56% and 53%.

Many different reasons may be used to explain this behavioural diversity, including the specificity of local markets, the heterogeneous management culture, the diverse aversion to risk, the customer proximity, the availability of specialised skills and the diffusion of key enabling technologies, among others. Further studies are surely needed to test these hypotheses.

These outcomes support the relevance of the servitization process in manufacturing companies. The servitization extent of European manufacturing companies in this investigation is far below those observed by Dachs et al. [14]. Results are in general in line with those observed by Neely et al. [44]. However, the servitization extent of some countries (such as China and Czech Republic) resulted significantly different.

5.2 Product-related services, company size and commodity sector

Changing perspective, the servitization process can be observed considering the different types of product-related services offered by the companies. Figure 4 reports the distribution of these services. Note that maintenance and support activities, and retail and distribution are the most common product-related services. These services are offered by 34% and 19% of the manufacturing companies respectively. On the other hand, disposal and conversion as well as transportation and logistics services are offered by a minority of the analysed manufacturing companies (around 5%).

Fig. 4
figure 4

Distribution of product-related services among servitised companies (72,797 companies)

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The distributions of product-related services typologies per country are generally comparable, with some significant differences. For instance, Canada and USA have a considerably high percentage of companies providing design and development services (around 30%); in the UK, Netherlands and Australia, the percentage of servitised companies that provide financial services is higher than the average, ranging from 16 to 22%.

Different commodity sectors show dissimilar behaviours in the provision of different types of services. Table 4 reports the percentage of servitised companies providing a specific typology of product-related service for each NACE sector. As we can see, the distribution of service typologies per NACE sector can be rather different, for example 85% of NACE 15 companies (manufacture of leather and related products) offer retail and distribution services; this percentage drops to 17% if we consider NACE 26 (manufacture of computer, electronic and optical products).

Table 4 Distributions of product-related service typologies per NACE Sector (NACE 12 data are not present due to the low number of companies included in the ORBIS database)
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The servitization variety—intended as the number of different typologies of services offered by each company—is another interesting viewpoint of the servitization process. Figure 5 shows the servitization variety per country: UK, Australia, Netherlands and USA are countries with a high servitization variety. It is noteworthy that countries with a high percentage of servitised companies are also characterised by a high servitization variety.

Fig. 5
figure 5

Distribution of the servitization variety per country. Only countries with at least 500 servitised companies are herein considered

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Both the percentage of servitised companies and service variety show a correlation with the dimension of the company. Figure 6(a) shows how the percentage of servitised companies tends to increase with the size of the company in terms of number of employees.

Fig. 6
figure 6

Company dimension versus a percentage of servitised company (190,407 companies) and b service variety (72,797 companies)

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Similar considerations hold for service variety: larger manufacturing companies tend to offer a wider range of services (see Fig. 6(b)). The reasons behind these two evidences can be probably found in the greater availability of financial and human resources which allows and enhances the diversification of each company’s offering while reducing the reluctance to face and overcome servitization barriers [5].

Also, the percentage of servitised companies and the variety of offered services are markedly related to the commodity sector in which a company operates (see Fig. 7). For instance, companies in NACE sectors 10 (food production) and 13 (textiles production) have a low percentage (less than 27%) of servitised companies. Companies in these sectors also offer a low service variety: less than 15% provide more than one service typology. On the other hand, companies producing computer, electronic and optical products (NACE 26) and machinery of equipment (NACE 28) have a higher propensity to servitization: nearly half of the companies (49%) are servitised, and the proportion of companies offering more than a service is close to 30%. This finding can be related to the intrinsic features of the products offered by different commodity sectors, but also to the specificity of the market segment [32].

Fig. 7
figure 7

Commodity sector versus a percentage of servitised companies and b service variety (NACE 10—20,300 companies; NACE 13—5622 companies; NACE 17—5549 companies; NACE 22—12,131 companies; NACE 26—13,790 companies)

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6 Company positioning

These insights have significant implications for the development of service strategies in manufacturing companies, in particular for the definition of the service portfolio variety. As reported in Section 5, some factors, such as company dimension, geographical location and commodity sectors, may influence the tendency to offer services. However, there is no general evidence of a direct relationship between a company servitization variety and its success: companies need to identify the service strategy that best fits the competitive environment [23].

The position of the analysed company can be compared with other competitors in the marketplace. To this end, it is firstly necessary to determine the number of different product-related services offered by the company (service variety) and an indication on its overall profitability (e.g. return of investment (ROI)). Having these data, all the positions (service variety vs. profitability) of the competitor companies can be represented in a chart. As an example, Fig. 8 plots the data referred to service variety vs. profitability for an explanatory set of companies (sample of Italian manufacturing companies in the optical products sector, NACE 26). Each point on the graph indicates the position of a specific company. The distribution of companies on this chart provides a picture of an industrial sub-sector in terms of its variety of offered services and its profitability with respect to the investments made (ROI).

Fig. 8
figure 8

Service variety vs. profitability. This example refers to a subset of Italian companies in the Optical products sector (NACE 26)

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The position of a company can be related to that of the others, or, in general, to the position of the market barycentre. The market barycentre (pb; vb) is intended as the point representing the average behaviour of the analysed companies in term of variety of product-related services and profitability:

$$ {p}_{\mathrm{b}}=\frac{\sum_{i=1}^N\left({n}_i\bullet {p}_i\right)}{\sum_{i=1}^N\left({n}_i\right)} $$
(1)
$$ {v}_{\mathrm{b}}=\frac{\sum_{i=1}^M\left({m}_i\bullet {v}_i\right)}{\sum_{i=1}^M\left({m}_i\right)} $$
(2)

ni and mi are respectively the number of companies with profitability (pi) and variety (vi); N and M are the number of groups with a specific profitability and variety in the sub-sector considered. The market barycentre can be interpreted as the position of the “average” company in the sector, so that comparisons between the position of a specific company and that of the barycentre can be used to support the strategic choices of the company management. To this aim, two indicators can be defined:

$$ \mathrm{Profitability}\ \mathrm{GAP}=\left({p}_i-{p}_{\mathrm{b}}\right) $$
(3)
$$ \mathrm{Variety}\ \mathrm{GAP}=\left({v}_i-{v}_{\mathrm{b}}\right) $$
(4)

These two indicators respectively indicate whether the company has a profitability and a service variety that differ from the market average.

The joint information of these two GAPs could provide insights on the possible strategies to undertake (see Table 5). Four different types of position can be defined according to the values of the identified indicators:

  • Dominant position: both the profitability and variety gaps are positive. While being more profitable than its competitors, the company provides a higher number of product-related services to its customers. This type of position must be managed and defended.

  • Specialised position: companies that fall into this category offer fewer services than the market barycentre, but they achieve above-average profitability. Specialization in a niche of services allowed these companies to optimize their service delivery processes and improve their economic performance. This position must be defended and managed, also considering the possibility of expanding the provision of services.

  • Ineffective position: while being less profitable than competitors, these companies offer a higher variability of services. Companies that fall into this category may decide to reconsider their strategy of service provision in order to enhance their profitability.

  • Subordinate position: companies that fall into this category couple a limited service offering with a profitability that is lower than competition ones. Substantial changes in strategies are necessary to align the company to market. The option of providing a wider range of services could improve the long-term competitiveness of the company.

Table 5 Classification of company positioning according to the profitability and variety gaps
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With reference to the exemplificatory case presented in Fig. 8, the position of the market barycentre has been calculated: pb = 7.9% and vb = 1.2. When compared with the analysed company’s position (pi = 11.2% and vi = 3), the two GAP values are determined as follows:

$$ \mathrm{Profitability}\ \mathrm{GAP}=\left({p}_i-{p}_{\mathrm{b}}\right)=\left(11.2-7.9\right)=3.3 $$
(5)
$$ \mathrm{Variety}\ \mathrm{GAP}=\left({v}_i-{v}_{\mathrm{b}}\right)=\left(3-1.2\right)=1.8 $$
(6)

Being above the average both in terms of profitability and variety of services offered, these values describe a company that can be classified in a dominant position. This is an example of position of probable competitive advantage that company management must be able to manage.

7 Conclusions

The purpose of the present study was to provide an updated and solid picture of the servitization phenomenon on a worldwide scale. The investigation on more than 190,000 manufacturing companies showed disparities in the extent of servitization process among the 116 countries analysed, in terms of both percentage of servitised manufacturing companies and variety of offered product-related services. In particular, this study provides significant new evidences on the servitization extent in 38 different countries.

The analysis reveals that, on a worldwide scale, 38% of the manufacturing companies can be classified as servitised. UK, USA and Australia resulted the countries with the highest percentage of servitised companies in the manufacturing sector (more than 50%). In general, “maintenance and support” and “retail and distribution” are the most commonly provided services.

A remarkable finding is that both the service variety and the percentage of servitised manufacturing companies seem to be influenced by company dimension, geographical location and commodity sector.

The strengths of this investigation were the large size of the analysed sample and its representativeness in terms of company dimension, geographical location and commodity sector.

Providing a quantitative vision of the servitization process, this study can help researchers and practitioners in their understanding of the process. Operatively, this output can be used by a generic company to perform an analysis of its positioning with respect to its competitors. The findings herein presented support the view that the “optimal” servitization strategy is likely to be affected by the context in which the specific company operates. On the basis of this consideration, we suggest a preliminary data-driven approach to compare the service offering of a company with a properly defined set of companies.

The main limitation of this study probably stems from the specificity of the method of analysis, which is based on a specific taxonomy of product-related services: a different choice (for example in the number or typologies of categories of services) can lead to different results.

Further efforts are needed to ensure effective monitoring of the worldwide servitization process over time. A natural progression of this work is to analyse factors (such as leadership, technology, degree of competition, financial resources) that may enable the servitization process in manufacturing companies.