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The Business of Integrated Solutions
Linköping University, Department of Management and Economics. Linköping University, The Institute of Technology.
2005 (English)Licentiate thesis, comprehensive summary (Other academic)
Abstract [en]

The after-sales market is increasing in importance for many manufacturing firms. Sales of spare-parts and services is at the same time facing stiffer competitions from third-party suppliers. For many of these companies, the answer to this development has been to engage in the sales of integrates solutions, an offering that allows manufacturing firms to add customer value by including sophisticated products and services, activity specific knowledge and/or resources, and incentives based on successful customer operations. However, not all firms have succeeded in this endeavor and the main research question investigated in this licentiate thesis is: when and under which circumstances are certain integrated solutions preferable options to traditional sales of products and services?

The thesis is constituted of one cover paper and four appended papers. Although the individual aims of each paper vary, they all work together towards answering the main research question. The results of each have been synthesized and analyzed for this purpose in the cover paper. Paper 1 investigates three cases and highlights some important implications for firms moving towards integrated solutions. Among the implications identified is the need of an extended set of new competencies. The need for an increased customer-centric orientation is also acknowledged. Paper 2 suggest that the one of the important challenges facing these mentioned firms is creating value-adding offerings based on deepened relationships with their customers. Paper 3 expand on the discussion of the offering by providing a tentative conceptual model for buying ,integrated solutions. The paper is written from a customer perspective rather than taking the view of the supplier, which have been the most common perspective in the academic area of integrated solutions until now. Paper 4 addresses the issue of pricing the solution based on the performance of the supplying firm, the intent of this pricing model being increased performance and better cost coverage. A contingency framework is suggested as a way to analyze integrated solutions from this perspective. The cover paper gives special attention to the importance of supplier-customer relationships. It also returns to the main research question by suggesting that integrated solutions as a concept may be viewed from several perspectives and each perspective brings forth various organizational and offering options which may or may not be applicable under certain circumstances.

Place, publisher, year, edition, pages
Linköping: Linköpings universitet , 2005. , 38 p.
Series
Linköping Studies in Science and Technology. Thesis, ISSN 0280-7971 ; 1151
National Category
Social Sciences
Identifiers
URN: urn:nbn:se:liu:diva-24473Local ID: 6589ISBN: 91-85297-52-6 (print)OAI: oai:DiVA.org:liu-24473DiVA: diva2:244793
Available from: 2009-10-07 Created: 2009-10-07 Last updated: 2013-11-27
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, 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: 2014-05-12
2. Creating Business Offerings: the case of integrated solutions in manufacturing firms
Open this publication in new window or tab >>Creating Business Offerings: the case of integrated solutions in manufacturing firms
2004 (English)In: Proceedings of the 20th Annual IMP Conference, Köpenhamn: IMP Group , 2004Conference paper, Published paper (Refereed)
Abstract [en]

Relationships have been discussed thoroughly in interorganizational relationship theories.However, little has been done to study the object of this interaction, that is, how the businessto business offering is designed in regard to the reality in which the company exists. Byproviding Integrated Solutions, the increased overall responsibility over a function leads to ahigher risk-taking for the supplier. The challenge is to succeed in creating a new offering thatincreases customer value instead of charging the customer for the risk taking. Well-managedcustomer relationships are a critical factor in the creation of Integrated Solutions offerings.They proved to add customer value by bringing an opportunity to deepen cooperation,identify elements delivering benefits, and changing sacrifices into benefits. In this regard,offerings of integrated solutions facilitate a shift from charging for service to sharing profitswith customers resulting from a more efficient running.

Place, publisher, year, edition, pages
Köpenhamn: IMP Group, 2004
Keyword
integrated solutions, offering, value, relationship, outsourcing
National Category
Social Sciences
Identifiers
urn:nbn:se:liu:diva-23468 (URN)2926 (Local ID)2926 (Archive number)2926 (OAI)
Conference
20th Annual Conference of the Industrial Marketing and Purchasing (IMP ) Group. Copenhagen, Denmark. 2-4 September 2004.
Available from: 2009-10-07 Created: 2009-10-07 Last updated: 2013-11-27
3. Purchasing Complete Functions: Integrated Solutions from a Customer Perspective
Open this publication in new window or tab >>Purchasing Complete Functions: Integrated Solutions from a Customer Perspective
(English)Manuscript (preprint) (Other academic)
Abstract [en]

The industrial goods customer face various challenges when services are increasingly being included in the offerings of their suppliers, as compared to traditional purchasing of individual components and services. One such offering is integrated solutions, an offering that allows firms to purchase complete ftmctions including sophisticated products and services and gain access to the supplier's activity specific knowledge and/or resources. In the article, a tentative conceptual model for purchasing integrated solutions is suggested, as a way to structure some of the challenges. Still, results indicate that the evaluation of integrated solutions is a main challenge due to the complexity of the offerings, the multitude of offering variations and, in the long-term, the dynamic relationship between customer and supplier.

National Category
Engineering and Technology
Identifiers
urn:nbn:se:liu:diva-102028 (URN)
Available from: 2013-11-27 Created: 2013-11-27 Last updated: 2013-11-27
4. Performance-based pricing of integrated solutions
Open this publication in new window or tab >>Performance-based pricing of integrated solutions
(English)Manuscript (preprint) (Other academic)
Abstract [en]

As manufacturing fmns are moving towards integrated solutions, they may find themselves in need of new capabilities. Developing and maintainutg these is expensive and for the supplier, innovative pricing models are needed to cover these excess costs. Although pricing of integrated solutions can be designed in various ways, performance-based pricing remains one of the most effective ways to create an incentive for optimal performance, and also to cover the 'hidden' cost of developing capabilities. The paper maps some performance-based pricing models as has been found in two case studies of manufacturing firms. Furthermore, an investigation of how the design of these pricing models is affected by different contextual factors is also carried out. The results show that viable performance-bases are availability of supplied function or the change of profitability for the customer.

Keyword
Integrated solutions, performance-based pricing, business offering
National Category
Engineering and Technology
Identifiers
urn:nbn:se:liu:diva-102029 (URN)
Available from: 2013-11-27 Created: 2013-11-27 Last updated: 2013-11-27

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