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ISBM Pulse: services

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Disentangling the effect of services on B2B firm value: Trade-offs of sales, profits, and earnings volatility (Nezami, Worm, and Palmatier)

Many B2B manufacturers have moved from their previously successful product-centric strategies to more service-oriented business models. Yet despite their substantial investments in services, firms fail to understand the performance ramifications of these offerings. With a longitudinal data set of 227 B2B manufacturers listed in the S&P 1500 index, this study disentangles the simultaneous effects of financial-based mechanisms that link the service ratio (i.e., share of a firm’s revenue generated from selling services) to firm value.