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Introduction
Manufacturing and service industries are often assumed incommensurable. Whether discussing national economies, business classifications, education, training or employment, they tend to be thought of as separate. Yet manufacturers themselves can base their competitive strategies on services, and the process through which this is achieved is commonly known as servitization (though servitization and servicisation are often used interchangeably) ([53] Wise and Baumgartner, 1999; [40] Oliva and Kallenberg, 2003; [45] Slack, 2005; [44] Schmenner, 2009). This strategy can strengthen customer relationships, create new and resilient revenue streams, and set high barriers for competitors ([4], [2] Baines et al. , 2009b; 2011a).
Interest in servitization continues to gain traction. Modern manufacturing is now seen to extend beyond production ([20] The Financial Times , 2012), and product-service business models are accepted as essential to industrial success in the twenty-first century ([21] Foresight Horizon Scanning Centre, 2010). As researchers we recognise that the commercial benefits of servitization are convincing (Rolls-Royce Plc earn around 50 per cent of their revenue from services); that the environmental arguments are compelling (significant reductions in materials and energy usage); and that the opportunities immense (three quarters of wealth world-wide is now created through services ([103] Royal Society, 2009)).
This growing interest has induced a range of research challenges. These include opportunities to improve the terminology and models used to describe services ([46] Spring and Araujo, 2009; [6] Baines et al. , 2007; [47] Tukker, 2004; [35] Mont, 2000; [26] Goedkoop et al. , 1999), improving our understanding of how integrated product-service business models impact economic success ([38] Neely, 2009; [48] Visnjic and Van Looy, 2009; [19] Fang et al. , 2008), how to innovate and design successful offerings ([23] Gebauer and Friedli, 2005; [17] De Joeng and Vanmeulen, 2003; [13] Coyne, 1989), the relationships needed with partners ([18] Edvardsson et al. , 2008; [22] Galbraith, 2002), and transformational issues facing manufacturers seeking to servitize ([16] Davies et al. , 2006; [52] Windahl and Lakemond, 2006; [33] Mathe and Stuadacher, 2004; [40] Oliva and Kallenberg, 2003; [42] Roscitt, 1990). Such challenges are especially acute for advanced services.
Advanced services are a special case in servitization. Sometimes known as capability, availability or performance contracts, here the manufacturer delivers services (coupled with incentivized contracting mechanism) that are...