Exploring Servitization and Digital Transformation of Manufacturing Enterprises: Evidence from an Industrial Internet Platform in China

Abstract

The paper links between servitization and digitalization in general and industrial internet in particular. Servitization is vital to the competitive advantages and financial performance of manufacturing enterprises in contemporary digitalization environments. Enterprises are increasingly relying on industrial Internet platforms to satisfy potential customers’ needs as well as to create superior value, but the literature has neglected to explain how enterprises can leverage digital technologies to improve the efficiency and effectiveness of their service production. To date, the literature has focused on customized offerings of the products and services downstream of the value chain. Yet, digital technologies are reshaping the virtual work of every function in the value chain. To improve the whole level of manufacturing servitization, the service efficiency of the upstream value chain is necessary. We bridge this gap in the literature by exploring how the industrial Internet platform enables upstream value chain servitization of manufactures. Based upon the meta-theoretical foundations of service-dominant logic, we identify the “sense and respond” strategy of upstream value chain servitization enabled by the industrial Internet platform. We collect a questionnaire survey data set that examines how the characteristics of the industrial Internet platform should be managed to enhance the manufacturers’ efficiency of the servitization strategy. The research results show that two characteristics—connectivity and compatibility—of the industrial Internet platform positively impact the servitization strategy. Connectivity impacts resource integration, resource reconfiguration, and market perception via compatibility as a mediating variable, while connectivity has no direct effect on market perception. We argue that the industrial Internet platform impacts an organization’s ability to sense the market and resource management actions; these operational resource actions are a significant antecedent of the servitization strategy.

Keywords: Industrial Internet platform, servitization, service-dominant logic, platform characteristics