What Does it Take to Successfully Implement a Hybrid Offering Strategy? A Contingency Perspective

Abstract

Since the beginning of the 1990s, selling integrated bundles of goods and services – so-called hybrid offerings – have emerged as a trend in industrial markets. Hybrid offerings are proposed to help companies to differentiate in highly competitive markets and to generate higher margins. Meanwhile, as anecdotal evidence suggests, many companies still fail to offer such hybrid offerings successfully. Hence, the purpose of this study is to test whether a positive relationship between implementing a hybrid offering strategy and companies’ financial success exists and which contingency factors moderate this relationship. By using a cross-industry survey of N=299 European industrial companies from various industries which combine products and services to varying degrees, the study at hand reveals that a hybrid offering strategy is especially successful under conditions of fierce competition. Results further reveal that a company’s proactive decision to implement a hybrid offering strategy (instead of a mere reaction to customer pressure) affects the performance gains that the company can reap from hybrid offerings. Furthermore, results indicate that capabilities such as top-management commitment, modularization, as well as a supporting infrastructure significantly leverage the success of a hybrid offering strategy. These results have important implications for academic knowledge on hybrid offerings as well as the management of service infusion processes in companies.