Research On The Relationship Among Manufacturing Firms Servitization,geographical Diversification And Performance

Under the new normal economy,Chinese manufacturing firms are facing serious problems of rising costs and homogenization of products.In order to cope with the increasing market competition and changing external environment,manufacturing companies have gradually developed a strong interest in services,and believe through service,customer satisfaction and product differentiation can be improved,thereby effectively distinguishing them from their competitors.However,more and more evidence in practice shows that serviceization does not always improve firm performance.So far,the research conclusions are inconsistent.Then,whether servitization can really promote the performance of manufacturing firms,and which industry and firm scenario factors will affect the success of servitization is the focus.This paper first divides the servitization strategy into embedded servitization and mixed servitization according to whether it matches the existing product strategy.Then we consider the adaptability between firm strategies.The shift from pure products to service areas means the expansion of the original business scope and thus has the characteristics of diversification strategy.According to enterprise growth theory,business and geographical diversification are both important growth paths,and the view that there is interaction between them has been generally accepted.China's development path planning for the next ten years also emphasizes the use of services to break the long-standing market segmentation and guide the establishment of an open and orderly market system.With the transition of manufacturing firms today,whether servitization,as an effective means to improve the competitiveness of firms,can effectively exert economies of scale and scope through geographical diversification,and continuously establish advantages in cross-regional operations has become an important research content.Therefore,this paper incorporates geographical diversification into the research framework.Based on the theory of competitive advantage,and resource allocation theory,this article takes Chinese A-share listed manufacturing firms as the research object,and tests the data by regression analysis and other methods.The final conclusions are as follows: there is a significant U-shaped relationship between embedded servitization and performance in listedmanufacturing firms in China;while there is a significant negative correlation between mixed servitization and performance.In addition,geographical diversification weakens the U-shaped relationship between embedded servitization and firms performance;and it enhances the negative correlation between mixed servitization and performance.However,there are significant differences in this moderating effect within industries with different technological levels.Within high-end manufacturing,The moderating effect of geographical diversification is consistent with the overall sample.But,in the low-end manufacturing industry,the opposite result is shown.This article expands and enriches the research on servitization,and to a certain extent deepens the understanding of the relationship between servitization and performance of domestic manufacturing firms.In addition,this article for the first time constructs the interaction between manufacturing servitization and geographical diversification on performance,providing a new research perspective for furture research.At the same time,the results of this study can provide guidance for the practice of Chinese firms.This result shows that in the process of servitization,it is necessary to consider the service characteristics,synergistic effect of strategic combination and the industry in which it is located,having valuable practical significance for firm transition.