Master’s thesis project description

Student 1: Vilintas Bernotas

Study Cand.merc. (Management of Innovation and Business
programme/concentration: Development)
Student 2: Natalie Pretzer
Study Cand.merc. (Management of Innovation and Business
programme/concentration: Development)

Topic description:
We would like to examine how an established company can successfully shift its focus
from product-sales systems to product-service systems. In addition, we are interested in
investigating if servitization is a strategic escape route out of industry-based
commoditization or disruption.
We want to answer questions such as:
- Why do companies (in practice) create and offer services additionally to their
product portfolio?
- Which methods do companies use to find out which services would be fitting/
demanded (e.g. open innovation)?
- What is the best way to obtain knowledge about the required service? should the
company build the expertise internally vs. acquire it (e.g. acquire start-up)?
- How does servitization impact the company’s organizational structure? Should the
new unit be integrated into the organizational set-up or should it be spinned off?
- How do companies execute the transformation in practice vs. literature?
- What role does digitalization play in servitization?
- How do service innovations affect a company’s business model?
- What are the main challenges and obstacles when transforming company from
product-based to product-service based?
- What are the key factors to service innovation success?
Relevance:
We know that product-focused companies in mature stages of their industries sooner or
later end up in the commodity trap, where competition is based on product costs
(Chesbrough, 2011). This is happening because manufacturing and business processes
become increasingly widely distributed and difficult to protect from imitation.
As these conditions are found in so many industries and companies seem to begin to grasp
the issue, we think it is very relevant to find appropriate strategic approaches to escape this
dangerous situation. Our aim is to create a guideline on how product-focused firms can
servitize their offer, with a special focus on digitalization.
Our topic is mainly focused on incumbents. Therefore, we aim at delivering results that can
be useful as a guidelines or best practices in a broad range of manufacturing firms.
Methodology:
We would like to base our research on a case study of one or more companies. This can be
done by examining companies who have shifted their focus from just selling solely user-
based products to being a holistic service provider.
We are currently closely in touch with Grundfos A/S, trying to align our academic
requirements and their expectations towards Master Thesis collaboration project. However,
we do not want to limit ourselves only to this one company, therefore we are open to
suggestions from our supervisor. The final definition of research question and methodology
depends on the agreement with a case company and input from supervisor.
Theory/literature:
Tukker (2004): “Eight Types of Product-Service System: Eight ways to sustainability?” 

Chesbrough (2011): “Open Service Innovation”
Teece, Pisano & Shuen (1997): “Dynamic Capabilities and Strategic Management”
Barney (1991): ” Firm Resources and Sustained Competitive Advantage”
Chesbrough (2010): “Business model innovation: Opportunities and barriers”