Service Transition: A Viable Option for Manufacturing Companies with Declining Financial Performance?

Manufacturers place increasing emphasis on services. while many firms have started their service maneuver in reaction to declining financial performance, theory argues that strategic change processes such as service transitions require a healthy financial outset to succeed. To shed light on the preconditions of successful service transitions, this study draws on configuration theory and empirically demonstrates that firms with healthy and declining financial situations can venture into services and realize future revenue growth. Our findings reveal, however, that firms need to tap different knowledge sources: healthy companies should focus on customers as the primary knowledge source; strug-gling companies need strong links with their suppliers instead.