Servitization and Firm Performance: The Role of Customer Integration.

Manufacturing companies are increasingly turning to more intensively cooperating with their suppliers and customers in order to overcome the effects of ?°service paradox?±. The current servitization literature on supply chain cooperation mostly focuses on suppliers, with little attention given to customers. As an inseparable part of service, customers are a key component of the servitization strategy for manufacturing firms, and therefore, require more attention. Based on a survey of 931 manufacturing plants from 22 countries, this study examined the relationship between servitization and firm performance as well as the moderating effect of customer integration. We considered two distinct forms of servitization, the product- dominant ?®Services Support Products' (SSP) and the service-dominant ?®Services Support Customers' (SSC). Results show that SSC is positively related to firm performance, but the relationship between SSP and firm performance is insignificant. Furthermore, customer integration weakens the relationship between SSP and firm performance, and strengthens the relationship between SSC and firm performance. These results suggest that the distinct forms of servitization differentially affect performance and that customer integration moderates these effects differentially as well. The theoretical and practical implications of these findings are discussed. [ABSTRACT FROM AUTHOR]