Kastalli, Van Looy - Servitization

Question 1

Framework

Answer 1

1 - Increase in product sales results in increasing service sales
= dependent on companies ability to offer cost effective bundles

2 - Increase in service sales results in increasing product sales
= better understanding of customer needs may result in improved product design

3 - Customer proximity results in increased product sales

4 - curvilinear relation between service scale and profit margin
= steep decrease in margin at low scale -> low hanging fruits
= investments needed -> decrease of profit margin at medium scale
= economies of scale -> further increase in profit margin, investment pays off