Servitization in Mergers and Acquisitions: Manufacturing Firms Venturing from Emerging Markets into Advanced Economies

We investigate servitization by manufacturing firms that have ventured from emerging markets into advanced economies through mergers and acquisitions (M&A). The study seeks to answer two questions: (a) What is the relationship between M&As and servitization in the case of manufacturing firms? and (b) What are the factors influencing the configuration of servitization strategies and their implementation? The study provides a nuanced and contextualized understanding of servitization in M&As. Existing research on servitization has paid insufficient attention to collaborative partnerships. There is a need to examine the role of servitization in the context of collaborative partnerships. Our empirical setting consists of Chinese manufacturing firms' acquisitions in Germany. Using qualitative research methods, we reveal a typology of servitization strategies - adding, utilizing, and reconfiguring – that underpin the combined influences of different levels of services of both acquirer and target firms in the M&A. We identify integration mode and absorptive capacity as factors influencing service capability development. Our findings contribute to the literature on alternative approaches to servitization by firms from emerging markets venturing into advanced economies. We discuss the theoretical and managerial implications and suggest future research directions for servitization in collaborative partnerships in general and in M&A in particular.