Servitization and performance: impacts on small and medium enterprises

Abstract

Purpose This study aims to examine the impact of the servitization on the performance of small and medium enterprises (SMEs) in Brazil. Design/methodology/approach The study uses data from Brazilian SMEs and applies partial least squares structural equation modeling (PLS-SEM) to test the research hypotheses. Findings The findings suggest a positive relationship between servitization and SME performance. It is found that the strategy of offering base services does impact SME performance. Furthermore, servitization aims to promote a fit between environmental pressures and SME performance. Practical implications SMEs can use servitization to increase their performance in spite of their resources restrictions, size limitation and low level of service revenue. However, the adoption of servitization should be accompanied by managerial adjustments in servitization practices. Originality/value This paper is dedicated to investigating the servitization-performance relationship in the context of SMEs, which is not a usual research publication. Moreover, it adds to the servitization theory by demonstrating that it is not necessary to reach a critical mass of services to be profitable and base services may be also a source of revenues and profits.

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