Ivanka Visnjic, ESADE Assistant Professor, reveals her latest research findings on how creating additional services can make your business grow Published in the Journal of Operations Management, Ivanka Visnjic's research proves how manufacturing companies seeking business expansion can boost growth and profits by creating additional services. "The message is that services create more revenue streams through sales of additional products. This extra revenue greatly outweighs the slight sales cannibalization services might cause through customers putting off product repurchases," says Visnjic. "Our findings show that profit margins are also boosted when companies increase their service offerings. Initially, the profit margin grows really fast. However, when you try to make services a systematic business, profit margin growth slows and then picks up later on, once you have figured out how to make services into a valuable business." "We believe sharing these results with executives can help them to anticipate what kind of dynamics services have in terms of profit. Executives will be less likely to give up when profit margins level off because they will know it is only temporary." Get the latest knowledge tips from our ESADE experts

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The Research Pitch | Creating services to grow your business

03/2018

Ivanka Visnjic, ESADE Assistant Professor, reveals her latest research findings on how creating additional services can make your business grow


Published in the Journal of Operations Management, Ivanka Visnjic's research proves how manufacturing companies seeking business expansion can boost growth and profits by creating additional services.


"The message is that services create more revenue streams through sales of additional products. This extra revenue greatly outweighs the slight sales cannibalization services might cause through customers putting off product repurchases," says Visnjic.


"Our findings show that profit margins are also boosted when companies increase their service offerings. Initially, the profit margin grows really fast. However, when you try to make services a systematic business, profit margin growth slows and then picks up later on, once you have figured out how to make services into a valuable business."


"We believe sharing these results with executives can help them to anticipate what kind of dynamics services have in terms of profit. Executives will be less likely to give up when profit margins level off because they will know it is only temporary."





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More Knowledge
Servitization: Disentangling the impact of service business model innovation on manufacturing firm performance
Visnjic, Ivanka; Van Looy, Bart
Journal of Operations Management
Vol. 31, n 4, 05/2013, p. 169 - 180
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