Servitization, digitization and supply chain interdependency

Vendrell-Herrero, Ferran; Bustinza, Oscar F.; Parry, Glenn; Georgantzis, Nikos

Abstract

© 2016 The Author(s) This study draws on literature at the intersection of servitization, digital business models and supply chain management. Work empirically explores how digital disruption has affected Business-to-Business (B2B) interdependencies. Dematerialization of physical products is transforming the way firms are positioned in the supply chain due to a reduction in production and transport costs and the different ways business engage with customers. Specifically, we propose that these new market conditions can empower downstream firms. We further propose that upstream firms can still capture additional value through digital service if their servitized offer includes difficult to imitate elements. The context of the analysis is the publishing industry. The Payment Card method employed is used to test UK and US consumer's perceptions of digital formats (eBooks) and assess their willingness to pay in relation to printed formats. The method undertaken enables us to elicit aggregated consumer demand for eBooks which in turn identifies optimal pricing strategies for the digital services. Analysis demonstrates that during digital servitization upstream firms should seek to deploy unique resources to ensure their strategic position in the supply chain is not diminished.

• Journal Article Type: Article
• Acceptance Date: Jun 17, 2016
• Online Publication Date: Jun 30, 2016
• Publication Date: Jan 1, 2017
• Deposit Date: Jul 11, 2016
• Publicly Available Date: Jul 11, 2016
• Journal: Industrial Marketing Management
• Print ISSN: 0019-8501
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 60
• Pages: 69-81
• DOI: https://doi.org/10.1016/j.indmarman.2016.06.013
• Keywords: servitization, digitization, interdependences, publishing industry, payment card
• Public URL: https://uwe-repository.worktribe.com/output/899420
• Publisher URL: http://dx.doi.org/10.1016/j.indmarman.2016.06.013
• Contract Date: Jul 11, 2016