• Journal of Information Technology Services
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• v.15 no.4
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• pp.111-123
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• 2016

The purpose if this study was to find and investigate effective mediation factors influencing performance of servitization through servitization acceptance activities by means of empirical results. According to the previous researches, two main mediation factors which were related with servitization competencies such as ICT competency of servitization and competency of servitization process were distinguished from lots of competencies which are relying on servitization process. Using a 373 sample data investigated from CEOs, directors and managers of small and medium sized firms in Korea, the structured mediation model was proposed. The measurement for the each variable was accepted for this study when the respondents were revealed to understand the servitization concepts which explained especially company's business moving towards the service specific gravity from selling existing products. The measurement for the each variable reflected that respondents were participating in any sort of servitization type or had intension to be involved with any servitization categories. The mediation hypotheses were tested in the way of analytical measures with the result of strong reliability. According to analysis, two mediators showed positive mediation role and statistically adopted between servitization acceptance activities and servitization performance in the 99% significant level. We confirmed that ICT competency of servitization and competency of servitization process were in the role of positive mediation between servitization acceptance activities and performance of servitization. The total of indirect effects were 0.2546 to support each mediation hypotheses. Tested two mediators were not on the same level. The most affecting mediation element on servitization performance was appeared as competency of servitization process. With the result of this study, we expect that the small and medium sized companies might have servitization business strategies including proper service competencies and mediators through acceptance activities to obtain suitable performance. According to the analysis, Companies which consider product-servitization need to set strategies to reinforce above two competencies.

• Journal of Service Research and Studies
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• v.1 no.1
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• pp.1-27
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• 2011

In this research, we study on the servitization of manufacturing firms. We review literature on the servitization based on business ecosystem and internalization with extended servitization framework. We develop and suggest a conceptual framework to understand the servitization. This conceptual framework includes four parts: service competitive strategy(Porter Michael, 1980), product-service-knowledge system(PSKS), value chain, and servitization configuration. To confirm the applicability of this model, six cases are employed.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.41 no.2
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• pp.32-46
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• 2018

Research in the Servitization of Manufacturing has become focused more on cases than concepts over the past decade. This is because governments have emphasized some practical research with policies to support their industries. Manufacturers need differentiated strategies to gain competitiveness by servitization in the global market. They should examine how common servitization has become in the same industries and markets. They should also make sure how it works and for what purpose it is done since it is necessary to make the best decision to be able to distribute the limited resources most effectively to defeat the global competitors. South Korea has the sixth largest trade volume in the world, but Korean SMEs' marketing capabilities fall short compared to that of major global companies. This paper seeks to develop the proper model and its application for the servitization with global cases which are recommended for Korean SMEs. They need to check the urgency in servitization according to their products, industries and target markets. In addition, factors such as purposes, time and types of the servitization are examined to see how they are related each other. The most significant implication of this study is that the processes for early-stage companies in servitazation are modeled to help them make the best choices.

• Journal of Information Technology Services
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• v.11 no.2
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• pp.307-317
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• 2012

We investigate the long-term effect of servitization strategy on firm value. Manufacturing companies recognize servitization as their competitive strategies. While most of existing literature have focused on developing theory, presenting framework, or cases, only a few papers examine effects of servitization strategy empirically. We aims to empirically test the long-term relationship between servitization strategy and firm value. Service ratio and Tobin's q are used to measure the degree of servitization and firm performance, respectively. Data set covers 130 manufacturing companies for 12 years from 1998 to 2009.

• East Asian Economic Review
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• v.26 no.4
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• pp.257-277
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• 2022

Does servitization improve manufacturing firms' performance, and in what condition? Following the seminal work of Crozet and Milet (2017), this study analyzes disaggregated firm-level data that covers 40,000 South Korean manufacturing firms surveyed by the Survey of Business Activities of Korea. We compute firm-level servitization intensity with available sales data of each firm by two-digit SIC sub-sectors. We find two novel empirical regularities: Korean servitization intensity distribution shows a very different shape from the French benchmark; Servitized firms tend to perform higher profitability and higher productivity than non-servitized firms.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.42 no.2
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• pp.49-61
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• 2019

As the technological gap amongst manufacturers decreases, the life cycle of products has shortened, and competition accelerates due to the development of technology, incumbent manufacturing companies face growth limitations. In order to overcome such business issues, manufacturing companies are increasingly interested in changes in business models and innovations, especially in the direction of providing services where they can maintain the competitive advantage of their products. In such context, this empirical study examines managerial leadership, differentiation strategies, and products and services pricing as 'servitization factors', which can be driving forces for moving into a new era of growth for Korean SMEs, focusing on the mediating effects of servitization competency. The results are as follows : First, it was confirmed that executive leadership, differentiation strategy, and information & communication technology capability have a direct effect on service sales. Second, the process competency, partnership competency, and ICT competency, which are presented as the service competence of SMEs, were found to play an important role in inducing service sales in managerial leadership, differentiation strategy, product and services pricing. It also emphasized the role of the public policy such as helping to foster SMEs as key partners in the expansion of social facilities and establishing platforms through ICT and data utilization for the convergence of manufacturing services.

• Journal of the Korean Operations Research and Management Science Society
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• v.38 no.2
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• pp.159-178
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• 2013

We present a model, combining servitization decision and a conventional two-sided market approaches, to understand expected outcomes and current market situations. We suppose an individual manufacturer participates in multiple platforms and decides whether to initiate servitization by considering latent profitability and risk. The analytical results from the model show that increasing competition within servitized companies lead to a servitization equilibrium, wherein the ratio of servitized companies in a market is stable, due to a gradual decline in relative benefits compared to non-servitized companies. This holds even in the case that the number of customer is increasing along the diffusion of servitization, under some restricted conditions.

• Journal of the Korean Operations Research and Management Science Society
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• v.36 no.4
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• pp.63-79
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• 2011

In this research, we have investigated the impact of servitization on firm value focused on Fortune 500 company's alliance announcement. The Firms are categorized to understand the impact of servitization and productization. The data includes Fortune 500 companies (2009, USA). Samples used for the hypothesis tests consist of 1,057 American companies that are opened on NYSE and NASDAQ, for the years 1990 through 2010. We test four research hypotheses based upon the various theoretical perspectives in servitization. The market is selective in reacting to alliance category; service company ${\rightarrow}$ manufacturing company, service company ${\rightarrow}$ service company. The findings show that alliance is significant between service company and manufacturing company. Also, the result shows significant relationship inter-service company's alliance. We have a significant relationship between company's alliance announcement and the market value of firms and shows significant AR in financial performance. Finally, this study presents implications for manufacturing companies that pursue service-led expansion as a strategic approach and are seeking to improve market value through alliance, partnership and cooperation. Continual effort must be placed to sustain market value of the firms.

• Journal of the Korean Operations Research and Management Science Society
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• v.41 no.4
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• pp.95-112
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• 2016

The purpose of this study is to develop a quantitative model to evaluate the performance of the servitized business model. We aim to quantitatively analyze the decisions of participants in the servitized supply chains, and provide methods to maximize the performance. We consider servitized supply chains consisting of a manufacturer and a service provider, that can be integrated, separated or coordinated based on the relationship between the manufacturer and the service provider. The decision models in each case are developed, and performance and profitability are analyzed. Utilizing the decision models in different cases, we compare the performances of different business models of the servitization. Since our models can be applied to analyze a wide range of the servitization business models, we expect this study can contribute to promote servitization in manufacturing companies by providing methods to evaluate the profitability of the servitization business model.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.45 no.3
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• pp.204-213
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• 2022

Most of the prior studies on the servitization of manufacturing companies have been actively studied, focusing on the performance and cases of servitization at the single company level. According to the results, most of the servitization at the single company level has been expanded based on the relevance of the company's core products. However, the form of companies that form a large axis of the Korean economy is a large-scale business group, and these business groups incorporate service affiliates for various purposes, so they show different characteristics from that of a single corporate. In addition, since the purpose of forming a business group is different for each business group, the service relevance between affiliates within the business group is different. Therefore, this study aims to examine the effect of service relevance between affiliates within a business group on the management performance of each business group. To this end, an empirical analysis will be conducted using panel data for 10 years from 2011 to 2020 for a total of 98 affiliates listed on KOSPI and KOSDAQ of 9 domestic business groups. Based on these results, the direction for improving management performance and establishing future servitization strategies for large business groups in Korea will be expected to be made.