Examining the influence of service additions on manufacturing firms' bankruptcy likelihood
By O. Benedettini, Morgan Swink, Andy Neely. 2017
120 citations recorded by the source corpus.
Abstract By evaluating secondary data from 74 bankrupt manufacturers and 199 matched non-bankrupt competitors, this study investigates the relationship of manufacturers' service offerings to their survival. While showing that the number of services offered is not significantly associated with bankruptcy likelihood, the results suggest that greater numbers of product-related and product-unrelated service offerings do reduce bankruptcy likelihood when properly complemented by firm-level contextual factors. Offering more product-related services causes bankruptcy likelihood to decrease for those companies that have a sufficiently diversified product business. In turn, companies with sufficient slack resources can expect bankruptcy likelihood to be reduced from the offering of more product-unrelated services. In contrast, companies should not expect that successful product sales performance will increase their chances of survival by focusing on product-dependent services. In light of these findings, this study challenges the notion from conceptual literature that additional services per se increase the chances of firm survival; it extends prior empirical studies in uncovering critical firm-level context effects; and it proposes portfolio theory as a theoretical foundation to examine manufacturers' service expansions.
Subfields: Economics and Econometrics, Management of Technology and Innovation, Strategy and Management
View Paper: https://www.semanticscholar.org/paper/011554851840829da32aff18bfe90bc2c6ae75c1
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Citations in the corpus
- Servitization and deservitization: Overview, concepts, and definitions (2017, unknown): “Cases such as Xerox challenge the notion that addingmore services represents a viable strategy for product firms in general, and Benedettini, Swink, and Neely (2017) demonstrate empirically that such a strategy does not increase the chances of survival.”
- Service Growth in Product Firms: Past, Present, and Future (2017, methodology): “The second contextual dimension highlighted by the empirical studies in this special section (Böhm et al., 2017; Benedettini et al., 2017) is the fact that most service growth research focuses on companies that face a certain maturity in their industry lifecycle and product commoditization; the…”