From products to services

by Laurie Young

During the last thirty years, a wide range of product companies throughout the Western economies have considered moving into or setting up service businesses. Some have rejected the idea after careful consideration, some have wandered into competitive services without any real idea of what is involved and others have deliberately executed a carefully considered strategic manoeuvre. Included in this debate are some of the most famous business names in the western world: Unisys, Ericsson, Michelin, Nokia and HP. For IBM it was Lou Gerstener's 'big bet'; at GE it was one of former CEO Jack Welch's 'four major strategies' and, at General Motors, the financial services arm was its most profitable business for many years. Yet very little has been published on this profound transition. As a result, myths and idiocies abound. Some routinely claim that the 'evolution from products through services to solutions' is inevitable. Others think that manufacturing is being outsourced to China and Indi