The Business Model of Servitization
Developed countries have tried hard to achieve transformation of their manufacturing industry and re-positioning in global value chain due to the globalization of the supply chain and the rise of mainland China. In addition, the value creation of manufacturing more emphasis on innovation as well as engaged in developing service- oriented manufacturing to achieve differentiation in the global manufacturing industry. The OEM/ODM business model in Taiwan has faced challenges of low profit. In order to look for the way of differentiation and re-positioning for Taiwanese manufacturing industry, this research is focusing on potential solution of business model innovation by the servitization. This research takes Caterpillar, Mori Seiki, OTIS, and Kenmec as case studies to derive the driving forces and three kinds of service-oriented business model. And the core capabilities of these three business model are also different. In the model of product extension service, the core capabilities lie in the close relationship between products and manufacturing process. For product function service model, the core capabilities are to focus on product performances and the layout of service system. As for integrated solution model, it integrates process and services with the ability of establishing value system. In the process of promoting service-oriented manufacturing, the government should provide infrastructure and counseling in terms of products, manufacturing process, service system, and value system, according to different business model, to help achieve the target of high value-added manufacturing industry.