Network positioning and risk perception in servitization: evidence from the UK road transport industry

Ali Ziaee Bigdeli*, Oscar F. Bustinza, Ferran Vendrell-Herrero, Tim Baines

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

For manufacturing firms, the integration of advanced services into their customer offerings has become a crucial decision. Such commercial decisions require weighting the risks and rewards of implementing a business model based on advanced services. While academic experts acknowledge uncertainty of returns on investment despite potential advantages, research generally fails to address the challenge of calculating the actual risks involved in ‘servitization’. This paper seeks better understanding of managers’ risk perception and of servitization implications for strategic partnerships and network positioning, while considering the impact of factors such as entry barriers, technological knowledge and position in the supply chain (SC). Qualitative evidence is drawn from an industrial case study involving firms in the UK’s road transport industry: fourteen in-depth interviews with senior executives from seven companies (manufacturers, operators, technology providers). During interviews, a payment card exercise measured risk perception and willingness to take strategic ‘make-or-buy’ decisions. Results suggest that implementing advanced services is perceived as a high-risk strategy, especially when firms lack in-house technological knowledge. However, collaborative strategic partnerships within supply chain networks can mitigate this risk and prove crucial to building entry barriers against external competitors. Based on these findings, implications for network positioning are developed.
Original languageEnglish
Pages (from-to)2169-2183
JournalInternational Journal of Production Research
Volume56
Issue number6
Early online date16 Jun 2017
DOIs
Publication statusPublished - 2018

Fingerprint

Risk perception
Supply chains
Industry
Managers
Road transport
Positioning
Transport industry
Service economy
Strategic partnership
Entry barriers
Technological knowledge

Bibliographical note

This is an Accepted Manuscript of an article published by Taylor & Francis in International Journal of Production Research on 16/6/17, available online: http://www.tandfonline.com/10.1080/00207543.2017.1341063

Funding: EPSRC (EP/K014064/1, EP/K014072/1 and EP/K014080/1); Spanish Government (ECO2014-58472-R); and Junta de Andalusia (P11-SEJ-7294).

Keywords

  • servitization
  • risk perception
  • network positioning
  • strategic partnership
  • advanced services

Cite this

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title = "Network positioning and risk perception in servitization: evidence from the UK road transport industry",
abstract = "For manufacturing firms, the integration of advanced services into their customer offerings has become a crucial decision. Such commercial decisions require weighting the risks and rewards of implementing a business model based on advanced services. While academic experts acknowledge uncertainty of returns on investment despite potential advantages, research generally fails to address the challenge of calculating the actual risks involved in ‘servitization’. This paper seeks better understanding of managers’ risk perception and of servitization implications for strategic partnerships and network positioning, while considering the impact of factors such as entry barriers, technological knowledge and position in the supply chain (SC). Qualitative evidence is drawn from an industrial case study involving firms in the UK’s road transport industry: fourteen in-depth interviews with senior executives from seven companies (manufacturers, operators, technology providers). During interviews, a payment card exercise measured risk perception and willingness to take strategic ‘make-or-buy’ decisions. Results suggest that implementing advanced services is perceived as a high-risk strategy, especially when firms lack in-house technological knowledge. However, collaborative strategic partnerships within supply chain networks can mitigate this risk and prove crucial to building entry barriers against external competitors. Based on these findings, implications for network positioning are developed.",
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author = "{Ziaee Bigdeli}, Ali and Bustinza, {Oscar F.} and Ferran Vendrell-Herrero and Tim Baines",
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Network positioning and risk perception in servitization : evidence from the UK road transport industry. / Ziaee Bigdeli, Ali; Bustinza, Oscar F.; Vendrell-Herrero, Ferran; Baines, Tim.

In: International Journal of Production Research, Vol. 56, No. 6, 2018, p. 2169-2183 .

Research output: Contribution to journalArticle

TY - JOUR

T1 - Network positioning and risk perception in servitization

T2 - evidence from the UK road transport industry

AU - Ziaee Bigdeli, Ali

AU - Bustinza, Oscar F.

AU - Vendrell-Herrero, Ferran

AU - Baines, Tim

N1 - This is an Accepted Manuscript of an article published by Taylor & Francis in International Journal of Production Research on 16/6/17, available online: http://www.tandfonline.com/10.1080/00207543.2017.1341063 Funding: EPSRC (EP/K014064/1, EP/K014072/1 and EP/K014080/1); Spanish Government (ECO2014-58472-R); and Junta de Andalusia (P11-SEJ-7294).

PY - 2018

Y1 - 2018

N2 - For manufacturing firms, the integration of advanced services into their customer offerings has become a crucial decision. Such commercial decisions require weighting the risks and rewards of implementing a business model based on advanced services. While academic experts acknowledge uncertainty of returns on investment despite potential advantages, research generally fails to address the challenge of calculating the actual risks involved in ‘servitization’. This paper seeks better understanding of managers’ risk perception and of servitization implications for strategic partnerships and network positioning, while considering the impact of factors such as entry barriers, technological knowledge and position in the supply chain (SC). Qualitative evidence is drawn from an industrial case study involving firms in the UK’s road transport industry: fourteen in-depth interviews with senior executives from seven companies (manufacturers, operators, technology providers). During interviews, a payment card exercise measured risk perception and willingness to take strategic ‘make-or-buy’ decisions. Results suggest that implementing advanced services is perceived as a high-risk strategy, especially when firms lack in-house technological knowledge. However, collaborative strategic partnerships within supply chain networks can mitigate this risk and prove crucial to building entry barriers against external competitors. Based on these findings, implications for network positioning are developed.

AB - For manufacturing firms, the integration of advanced services into their customer offerings has become a crucial decision. Such commercial decisions require weighting the risks and rewards of implementing a business model based on advanced services. While academic experts acknowledge uncertainty of returns on investment despite potential advantages, research generally fails to address the challenge of calculating the actual risks involved in ‘servitization’. This paper seeks better understanding of managers’ risk perception and of servitization implications for strategic partnerships and network positioning, while considering the impact of factors such as entry barriers, technological knowledge and position in the supply chain (SC). Qualitative evidence is drawn from an industrial case study involving firms in the UK’s road transport industry: fourteen in-depth interviews with senior executives from seven companies (manufacturers, operators, technology providers). During interviews, a payment card exercise measured risk perception and willingness to take strategic ‘make-or-buy’ decisions. Results suggest that implementing advanced services is perceived as a high-risk strategy, especially when firms lack in-house technological knowledge. However, collaborative strategic partnerships within supply chain networks can mitigate this risk and prove crucial to building entry barriers against external competitors. Based on these findings, implications for network positioning are developed.

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