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The impact of servitization and digitization on productivity and profitability of the firm: a systematic approach

Kharlamov, Alexander and Parry, Glenn (2020) The impact of servitization and digitization on productivity and profitability of the firm: a systematic approach Production, Planning and Control.

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Abstract

We propose a new systematic method to answer the research question: ‘What is the financial and economic impact of servitizing the firm, digitising the firm, and combined servitization and digitization strategy?’ Our method quantifies servitization, digitization and their synergy by analysing their relationship with firm financial and economic outcomes. The method is applied to the British publishing industry. Using text-mining and econometric analysis of secondary data, 258 UK book publishers (93% of the market share) are analysed over a period of 10 years (1,508 observations). Firms are categorised as servitized (S-firms), digitized (D-firms), digitized and servitized (DS-firms) and pure (P-firms) that are neither servitized nor digitized (control group). We detect no significant difference in terms of productivity and profitability between P-firms and D-firms. Although we find evidence of a servitization paradox, both S-firms and DS-firms show greater productivity than P-firms. Profitability of DS-firms is greater than that of P-firms, but profitability of S-firms is lower than that of P-firms. The research improves on the existing methodology employed to examine the impact of servitizing or digitising the firm and provides a means to measure how servitization and digitization impact on the productivity and profitability of a firm within a specific context.

Item Type: Article
Divisions : Faculty of Arts and Social Sciences > Surrey Business School
Authors :
NameEmailORCID
Kharlamov, Alexander
Parry, Glenng.parry@surrey.ac.uk
Date : 10 January 2020
Funders : Engineering and Physical Sciences Research Council (EPSRC)
OA Location : https://www.tandfonline.com/doi/full/10.1080/09537287.2020.1718793
Grant Title : EPSRC Grant
Copyright Disclaimer : � 2020 Informa UK Limited, trading as Taylor & Francis Group
Uncontrolled Keywords : Servitization; digitization; servitization paradox; publishing industry
Depositing User : James Marshall
Date Deposited : 04 Feb 2020 13:46
Last Modified : 04 Feb 2020 13:46
URI: http://epubs.surrey.ac.uk/id/eprint/853643

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