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Integrated Solutions in the Capital Goods Sector: Exploring innovation, service and network perspectives
Linköping University, Department of Management and Engineering. Linköping University, The Institute of Technology.
2007 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

With varying degrees of success, a number of firms in the capital goods sector are experimenting with different ‘integrated solutions’ initiatives. Integrated solutions include product innovations which enable increased process control that allows the optimisation of the customers’ processes, as well as business innovations which change the firms’ business models and customer approach. It is not always easy to develop and commercialise these new offerings, especially for firms that have traditionally focused on developing and selling products. Integrated solutions challenge these firms to shift the focus from physical products, spare parts and support services to emphasis on delivery of performance optimisation and productivity.

This thesis is a compilation of five papers and five supporting chapters that discuss and analyse the challenges with developing and commercialising integrated solutions in the capital goods sector. The research builds on case studies of firms experimenting with integrated-solution offerings. The firms produce complex, expensive industrial machinery to customers in the process and manufacturing industries. The main case is based on a five-year, in-depth longitudinal study of Alfa Laval, and more specifically of the developments within the wastewater industry. Other case studies include ITT Flygt and Atlas Copco.

The thesis shows that the development and commercialisation of integrated solutions represent a multifaceted, iterative and complex process for the firms under study, who need to combine product, service and business innovations, create new business structures, and create new relationships with customers and possible partners. Consequently, the development of integrated solutions is not confined to or explained by one theoretical field in this thesis, but is linked to innovation, service and network perspectives.

The thesis also shows that the three activities of innovating, organising and building relationships are dependent on changing market structures, customer demands and business cycles. Therefore it becomes important to manage the coexistence of different types of offerings, such as products, services and integrated solutions.

Place, publisher, year, edition, pages
Institutionen för ekonomisk och industriell utveckling , 2007.
Series
Linköping Studies in Science and Technology. Dissertations, ISSN 0345-7524 ; 1098Dissertations from the International Graduate School of Management and Industrial Engineering, ISSN 1402-0793 ; 107
Keyword [en]
Integrated solutions, Innovation, Capital goods
National Category
Production Engineering, Human Work Science and Ergonomics
Identifiers
URN: urn:nbn:se:liu:diva-8869ISBN: 978-91-85715-06-0 (print)OAI: oai:DiVA.org:liu-8869DiVA: diva2:23580
Public defence
2007-05-25, C3, C Huset, Linköping Universitet, Linköping, 13:00 (English)
Opponent
Supervisors
Available from: 2007-05-21 Created: 2007-05-21 Last updated: 2015-03-04
List of papers
1. Manufacturing firms and integrated solutions: characteristics and implications
Open this publication in new window or tab >>Manufacturing firms and integrated solutions: characteristics and implications
2004 (English)In: European Journal of Innovation Management, ISSN 1460-1060, E-ISSN 1758-7115, Vol. 7, no 3, 218-228 p.Article in journal (Refereed) Published
Abstract [en]

For an increasing number of firms in the capital goods industry, combinations of products and services, so called integrated solutions, are becoming part of their future growth strategies. By analysing three case studies, the article highlights the variety of such solutions and some important implications for the involved companies. The analysis suggests that companies need an extended set of competences to succeed in providing integrated solutions, amounting to a balance of technical and integration competence with market/business, consulting and partnering competences. This implies a move from product-focus to customer-centric orientation and focus on optimisation of user processes. From a research perspective the paper underlines the importance of integrating studies of product and service innovation, two fields that so far have been studied separately.

Keyword
Capital, Innovation, Manufacturing industries, Services
National Category
Production Engineering, Human Work Science and Ergonomics
Identifiers
urn:nbn:se:liu:diva-14481 (URN)10.1108/14601060410549900 (DOI)
Available from: 2008-11-12 Created: 2008-11-12 Last updated: 2017-12-13
2. Developing integrated solutions: the importance of relationships within the network
Open this publication in new window or tab >>Developing integrated solutions: the importance of relationships within the network
2006 (English)In: Industrial Marketing Management, ISSN 0019-8501, Vol. 35, no 7, 806-818 p.Article in journal (Refereed) Published
Abstract [en]

Firms that have traditionally focused on selling products, spare parts and services face difficulties with increasing competition and declining margins. They are therefore turning to new strategies where products and services are integrated into so-called integrated solutions. Research on the challenges this presents is sparse, but there is evidence that internal factors as well as external relationships play an important role. In this paper we investigate the relationships within the business network in order to uncover some of the complex issues related to integrated solutions, including how and to what extent these relationships facilitate or impede the development of integrated solutions. Two case studies of one more and one less successful initiative within the same firm are used to illustrate challenges and possible success factors for the development of integrated solutions in the capital goods industry.

The paper identifies the following six factors as important when developing integrated solutions: the strength of the relationships between the different actors involved, the firm's position in the network, the firm's network horizon, the solution's impact on existing internal activities, the solution's impact on customers' core processes, and external determinants. It shows that inter- and intra-firm relationships can both enable and obstruct the development of integrated solutions. For the firms involved in the development of integrated solutions, it becomes crucial to manage this duality.

Keyword
Integrated solutions; Relationships; Network theory; Capital goods
National Category
Engineering and Technology
Identifiers
urn:nbn:se:liu:diva-14482 (URN)10.1016/j.indmarman.2006.05.010 (DOI)
Available from: 2007-05-21 Created: 2007-05-21 Last updated: 2015-03-04
3. Suppliers in the privatised UK wastewater market and their possible moves towards integrated solutions
Open this publication in new window or tab >>Suppliers in the privatised UK wastewater market and their possible moves towards integrated solutions
2006 (English)In: Water Policy, ISSN 1366-7017, Vol. 8, no 6, 559-572 p.Article in journal (Refereed) Published
Abstract [en]

An increasing number of companies in the capital goods industry are turning towards new strategies where the focus is to add value for customers by providing integrated solutions (combining products and services), instead of selling components, spare parts and support services. These new strategies represent moves in the value chain and create a need for new business models as well as new competencies.

In this paper, the fairly new concept of integrated solutions is explored in the context of a privatised industry. The findings are based on empirical case studies carried out at two companies supplying products and services to the UK wastewater industry. In the UK, both water companies and their suppliers are influenced by economic and environmental regulations, an increased focus on cost, and outsourcing. On one hand, the two manufacturers have increased their competence with respect to system integration and operational services – competencies for supplying integrated solutions. On the other hand, a fragmented and vertically structured market with a multitude of different actors increases the distance between the water companies and the manufacturers. In addition, the division of the industry into a capital and operational side complicates the coordination between new sales and services.

Keyword
Capital goods; Integrated solutions; Privatisation; Services; Solutions; Wastewater
National Category
Engineering and Technology
Identifiers
urn:nbn:se:liu:diva-14483 (URN)10.2166/wp.2006.056 (DOI)
Available from: 2007-05-21 Created: 2007-05-21 Last updated: 2013-10-23
4. Managing technology-driven business innovations: the case of Alfa Laval and Octopus (IMIE Research Report 2007:1)
Open this publication in new window or tab >>Managing technology-driven business innovations: the case of Alfa Laval and Octopus (IMIE Research Report 2007:1)
(English)Manuscript (Other (popular science, discussion, etc.))
Identifiers
urn:nbn:se:liu:diva-14484 (URN)
Available from: 2007-05-21 Created: 2007-05-21 Last updated: 2010-01-14
5. Managing technology-driven business innovations: the case of Alfa Laval and Octopus
Open this publication in new window or tab >>Managing technology-driven business innovations: the case of Alfa Laval and Octopus
2007 (English)Report (Other academic)
Series
IMIE Research Report, ISSN 1403-0861 ; 1
National Category
Production Engineering, Human Work Science and Ergonomics
Identifiers
urn:nbn:se:liu:diva-14485 (URN)
Available from: 2007-05-21 Created: 2007-05-21
6. Integrated solutions - the ambiguity of combining services- and goods-centred logics in the capital goods industry
Open this publication in new window or tab >>Integrated solutions - the ambiguity of combining services- and goods-centred logics in the capital goods industry
2007 (English)In: Industrial Marketing Management, ISSN 0019-8501, E-ISSN 1873-2062Article in journal (Refereed) Submitted
National Category
Engineering and Technology
Identifiers
urn:nbn:se:liu:diva-14486 (URN)
Available from: 2007-05-21 Created: 2007-05-21 Last updated: 2017-12-13

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