The Servitization of Manufacturing: An Empirical Case Study of IBM Corporation

Abstract

A conceptual model of firm process transition from manufacturing to servitization is proposed based on empirical case study. It denotes that the firm process in traditional manufacturing is run by resource and technology, and the primary objective of the company is making a good quality product, which has been observed a significant difference in servitized manufacturing firms that are conducted through skills and knowledge, and the firms main focus on developing value added services and more solutions oriented to customers. This research explains how a traditional hardware manufacturer, namely ‘IBM Corporation’ revolutions in the computer industry through non-hardware (Service-ware) depend services activities; consulting, financing, training, and so on and has fundamentally shifted their business from not only producing goods to offering a bundle of goods and services (Servitization). It also discusses the pertinent aspects of the firm’s cultural adaptation and strategic change process towards servitization of manufacturing based on our observations and interview results of IBM professionals.