Unpacking the effect of digital servitization on a firm’s market value
Résumé
Servitization (S) is a promising growth strategy. However early servitized companies’ have suffered from a service paradox, by which investing in S does not generate the expected benefits. Digitalization (D) could be one way to overcome it: some Digital-Servitized firms (DS-firms) demonstrated better profitability and productivity than only servitized ones. We address the conditions under which the combination between digitalization - customers’ digital interface - and servitization - service market opportunities approach - can be profitable for DS publicly listed firms. We apply a quantitative methodology based on 192 French SMEs listed on the Euronext stock market. Our results show that only firms with a certain level (cut-off) of digital servitization strategy have a successful market value. Under the condition of having an aligned and well-balanced levels of S&D, they have strong potential to attract investors. At these conditions, digitalization boosts the effect of servitization on market value.