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Industrial services, product innovations, and firm profitability : a multiple-group latent growth curve analysis


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Eggert, Andreas ; Hogreve, Jens ; Ulaga, Wolfgang ; Münkhoff, Eva:
Industrial services, product innovations, and firm profitability : a multiple-group latent growth curve analysis.
In: Industrial Marketing Management. 40 (Juli 2011) 5. - S. 661-670.
ISSN 0019-8501 ; 1873-2062



Manufacturers in many industries seek service-led growth beyond their product core. Yet research on the link between service revenue growth and firm profitability is still at an early stage. To shed further light on this complex relationship, we report the results of a longitudinal study based on panel data of 414 companies in the German mechanical engineering industry collected over a five-year period. Employing latent growth curve modeling and using multiple group analysis, the study provides empirical evidence for the causality between service infusion strategies and manufacturers' profit trajectories. The results also reveal differential effects of service categories and the moderating role of manufacturers' product innovation efforts. For companies with high product innovation activity, services supporting the product (SSPs) directly increase firm profitability, while services supporting the clients' actions (SSCs) do not display any link with long-term profitability. Conversely, for companies with low product innovation activity, SSCs have a significant, positive effect on firm profitability, while SSPs have only an indirect effect. In sum, our findings caution managers that service offerings do not automatically improve company profits. Manufacturers must carefully consider the fit between their service offerings and product innovation activities to grow bottom line results.

Weitere Angaben

Schlagwörter:Industrial services; Latent growth curve modeling; Service infusion; Service strategies
Sprache des Eintrags:Englisch
Institutionen der Universität:Wirtschaftswissenschaftliche Fakultät > Betriebswirtschaftslehre > ABWL und Dienstleistungsmanagement
Die Zeitschrift ist nachgewiesen in:
Titel an der KU entstanden:Ja
Eingestellt am: 09. Dez 2011 08:38
Letzte Änderung: 09. Jun 2016 17:37
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