Timing and experience in global markets: unraveling the impact of servitization on new manufacturing venture survival

Abstract The emergence of global competition and advances in technology have prompted manufacturing firms to reshape their competitive strategies in global markets. Servitization is an innovative strategy, which integrates services into traditional products to offer both domestic and international customers greater value added. In the context of international entrepreneurship and drawing on the resource-based view and internationalization perspectives, this study investigates the relationship between servitization and the survival of new manufacturing ventures that are engaging in global markets. In addition, it further explores whether the pre-internationalization preparation and post-internationalization experience can moderate the servitization-survival relationship from the perspectives of costs, resources, and capabilities developed in different stages. Our findings support the view that, in the context of international markets, new manufacturing ventures are more vulnerable to risk and the additional costs of servitization coupled with the uncertainty of international markets. Later entry into foreign markets and greater international experience enable manufacturing ventures to resist the hazards associated with servitization and the process of internationalization. In doing so, we contribute to an understanding of the service paradox by adopting a dynamic and processual view of internationalization.