Competitive Advantage through Service Differentiation: Evidences from Italian Manufacturing Firms

The culture and the operational methods of service management have become a formidable
competitive weapon even for manufacturing firms. The term "service factory" has been proposed for
identifying that particular integration of products and services, achieved by the excellent
manufacturing firm, where "service is a multidimensional concept". The creation of a service factory
necessarily implies a radical change in the operational and organizational characteristics of the firm.
In order to support manufacturing firms in adopting a service strategy, it is relevant on the one hand to
identify the bundle of services which have to be provided for the customers and, on the other hand, to
understand the implications for firm management model. As regards the first point, the paper
proposes a framework which classifies the services along with two dimensions: time-dimension and
target-dimension. The proposed framework is of interest for manufacturing firms because it allows a
better recognition of services that are more perceptible for the customers. In the second part of the
paper, authors discuss the implications of a service strategy adoption on the management model of
manufacturing firms. In order to carry out this analysis, authors propose a model that combines four
service dimensions with three decision-making categories (Organization, Methodologies and
Technologies). In the end, the proposed framework has been applied in a sample of Italian hot water
heater manufacturers and a case study analysis has been carried out.