Hidden Costs and Challenges of Servitization: Cases of Danish and Chinese Manufacturing Firms

Servitization has been recognized as the process of creating value through adding services to products. Labels, such as “route to growth”, “profitability and economic stability”, “closer customer relationship”, have been attached to servitization. However, contrary to the positive connotations of these labels, the potential benefits of servitization are often overshadowed by costs associated with it. By using the cases of Chinese and Danish manufacturing firms, this study takes a closer look at possible hidden costs of servitization and contributes to our understanding of servitization performance paradox.