Services, Industry Evolution and the Competitive Strategies of Product Firms

41 Pages Posted: 14 Jan 2014 Last revised: 5 Feb 2014

See all articles by Michael Cusumano

Michael Cusumano

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Steven Kahl

Dartmouth College; Dartmouth College - Tuck School of Business

Fernando Suarez

Northeastern University, D'Amore-McKim School of Business

Date Written: January 14, 2014

Abstract

Services of different types have become increasingly important for product firms. While these firms mainly focus on products, managers and researchers lack a comprehensive framework to understand when to make significant investments in particular kinds of services. We identify three categories of product-related services from a product firm – smoothing and adapting services, which complement products, and substitution services, which enable customers to pay for the use of a product without buying the product itself. We develop propositions about the relative level of these different kinds of services vis-a-vis industry evolution, as well as suggest how these services affect industry structure. We draw upon various literatures, though we conclude that the relationship between products and services is more complex and richer than any one literature suggests.

Keywords: services, strategy, industry evolution, industry lifecycle

Suggested Citation

Cusumano, Michael A. and Kahl, Steven and Suarez, Fernando, Services, Industry Evolution and the Competitive Strategies of Product Firms (January 14, 2014). Available at SSRN: https://ssrn.com/abstract=2378868 or http://dx.doi.org/10.2139/ssrn.2378868

Michael A. Cusumano

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

E52-555
Cambridge, MA 02142
United States
617-253-2574 (Phone)
617-253-2660 (Fax)

Steven Kahl

Dartmouth College ( email )

100 Tuck Hall
Hanover, NH 03755
United States

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

Fernando Suarez (Contact Author)

Northeastern University, D'Amore-McKim School of Business ( email )

220 B RP
Boston, MA 02115
United States

HOME PAGE: http://www.fernandofsuarez.com

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