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Servitizing Company X : an assessment on service strategies and service design

Elzen, Tijmen van den (2019) Servitizing Company X : an assessment on service strategies and service design.

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Abstract:This research is performed to find out what Company X’s strategy should be in terms of servitization. Here we will summarize the results of the research and give Company X recommendations on how to servitize their business. Company X knows they need to servitize their business to be less dependent on building ships and to satisfy customer demand. In this process of servitization we saw several problems at Company X. The most important problem is that there is no clear service strategy. Together with a lack of collaboration between Digital Business and Asset Services this led Company X to develop IRIS which did not satisfy customer demand. This is clearly showing because customers do not use the IRIS tool Company X developed. To solve this problem, we developed a service strategy which should help Company X to satisfy customer demand in terms of services and establish a new reoccurring revenue stream. We started by looking into examples in literature about servitization in industry. Baines et al. (2009) describe how Rolls-Royce servitized their business and why. We used literature which helped us understand what the motivations are for companies to servitize their business and how the process of servitization works. To find out which different service strategies exist we used theory on service strategies by Ebeling et al. (2014). They identify four different external environments which are connected to different service strategies. One of these service strategies will be chosen based on research within Company X and be modelled. After evaluating the different service strategies, we chose the service strategy of the after-sales service provider. This service strategy fits well for the Dredger customers and we identified that Company X is not ready to offer complex services to larger customers yet. Also, the higher volume of Dredgers is favourable for scalability. The after-sales service strategy can also be a good stepping-stone towards servitization with larger customers. The chosen service strategy consists of providing spare parts, basic training, hotline, repairs and inspections. Many of the individual services are integrated with each other which increases the value of the total service offering, this is described in ArchiMate in figure 13. We advise Company X to install sensors on Dredgers and fix their sensor data storage problems as soon as possible to ensure they have reliable data they can work with. While doing this the core services in the service offering should be set up for commercial use which consist of providing spare parts, basic training, hotline, repairs and inspections. Then Company X could start looking into possibilities of condition-based maintenance and preventive maintenance. We advise Company X to use the IRIS dashboard tool for internal use at the hotline. There it can be used to do quick remote diagnostics for customers which want to make use of the hotline. In IRIS, visualisations of data regarding common problems can also be viewed and analysed for all kinds of uses like product development or improving training courses. After implementing the service strategy, Company X has created a new constant revenue stream. This makes Company X more stable during difficult times during which customer order less ships. It also gives Company X the incentive to enable the customers to have high production and focus on their core business. This is a better incentive than building as many ships as possible against the highest margin. This does not motivate Company X to innovate as much and does not fully satisfy the customer.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:50 technical science in general, 85 business administration, organizational science
Programme:Industrial Engineering and Management BSc (56994)
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