Competitive Advantage through Service Differentiation: Evidences from Italian Manufacturing Firms

The culture and the operational methods of service management have become a formidable competitive weapon even for manufacturing firms. The term "service factory" has been proposed for identifying that particular integration of products and services, achieved by the excellent manufacturing firm, where "service is a multidimensional concept". The creation of a service factory necessarily implies a radical change in the operational and organizational characteristics of the firm. In order to support manufacturing firms in adopting a service strategy, it is relevant on the one hand to identify the bundle of services which have to be provided for the customers and, on the other hand, to understand the implications for firm management model. As regards the first point, the paper proposes a framework which classifies the services along with two dimensions: time-dimension and target-dimension. The proposed framework is of interest for manufacturing firms because it allows a better recognition of services that are more perceptible for the customers. In the second part of the paper, authors discuss the implications of a service strategy adoption on the management model of manufacturing firms. In order to carry out this analysis, authors propose a model that combines four service dimensions with three decision-making categories (Organization, Methodologies and Technologies). In the end, the proposed framework has been applied in a sample of Italian hot water heater manufacturers and a case study analysis has been carried out.