The Empirical Research On The Influence Of Service Orientation Of Manufacturers On Financial Performance

Service orientation has already been one of the main strategies of the globalmanufacture enterprises to creat differentiation competitive advantage. In China, over60%listed manufacturing companies provide service business, over70%of them carryout R&D, solution, maintenance and after-sale services, etc. The companies, whichengaging in service differentiation, have distributed into equipment manufacturing, autoindustry, household appliances industry and IT industry, etc. However, the financialperformance of these companies is equal to their competitors’. Therefore, even thoughmanufacturing enterprises input plenty of resources into service businesses, most ofthey can hardly obtain the financial benefit of service businesses during servicestransition. This is “Service Paradox”, which causing a lot of research on relationshipbetween service oriented strategy and financial performance.Based on reviewing a large amount of literatures on service orientation,manufacturing service orientation and relationship between service orientation andenterprise financial performance, this article builds up the model of manufacturerservice orientation, financial performance, enterprise moderators and industrymoderators. The primary goal of this article is to explore the three dimensions of serviceorientation: number of services, broadness of service offerings and emphasis on services,and their respective influence on financial performance. Moreover, the factors withinenterprises and industries are integrated into conceptual model to analyze theirmoderating effects on the relationship between service orientation and financialperformance. The model reveals how enterprise characters and industry charactersinfluence the effectiveness of service orientation strategy. After empirically analyzing asample formed by156Chinese manufacturing companies, the research has severalimportant conclusions. Service orientation strategy has been the strategy choice of mostChinese manufacturing enterprises. In the respect of direct relationship between serviceorientation and financial performance, it is a ‘inverse U’ relation between number ofservice and financial performance, a positive correlation relationship between emphasison service and financial performance. Moreover, in the respect of moderating effects,service relatedness positively moderates the relationship between number of service,emphasis on service and financial performance; market turbulence positively moderatesthe relationship between emphasis on service and financial performance.Based on the results, the researcher suggest manufacturers should (1) operate moderate number of services;(2) give priority to high service-product-relatednessservices;(3) supply services to customers actively.