Several strategic goals for a company to engage in service business can be identified. In practice these goals are not mutually exclusive, quite often the goal is a combination of these with differing emphasis. The choice of a specific service business strategy and it's implementation depends on the overall business situation of the company ( e.g. customer demand, own competences, competitor actions, requirements of authotrities, etc.) and it's overall strategy. There is no one best strategy for service business.

Following general strategic goals can be identified:


Growing business is a key overall goal for any company. Service business provides increasing revenue opportunities either directly through services that are payable to customer or indirectly through services that support the product sales (i.e. service is a product feature).

Growth through total business model, integrating product and service businesses, requires profound changes of business logic, organizational structures and processes to success. This is a time consuming process and often requires incremental approach to development.

Often growth is pursued by a manufacturing company by acquiring service companies, which is the the fastest way to get new knowledge, employees and customers. This is an efficient way to do it, since it creates instant growth to the acquiring company but not to the market. Challenge is to integrate different organizations and their cultures.

Position in value chain / market place

Companies are always looking for better position in the value chain or market place. Through better position the company is able to, e.g., get more control of the business in the value chain or make the customers more dependent of its offerings. Usually, service business requires closer cooperation with the customer. Thus, it also provides possibility to influence customer's decisions, e.g., giving an opportunity to guide customer's purchases more towards the service provider's (and its partners) offerings.

Often requirements originate from customer’s customer’s business thus offering access to their business as well. This opens possibilities either to novel joint services with the customer or providing services directly to the customer’s customer. The later makes it possible to radically change the position and game in the value chain, but also carries the danger to alienate the current customer.


Services provide extra means to differentiate the company in the marketplace if the competitors have very similar products. The goal of the service may be, e.g., to enable more efficient delivery or use of the physical products to the customer. In some situations, uniquely structured product-service offering may also make the comparison to the competitors difficult for the customer.

Learning and competence development

Customer knowledge is very vital in any business for a company to be competitive. Service business, in which the service provider and the customer are working together more closely, gives a company a possibility to get more intimate data on the customer's operation. Thus, service business provides possibilities to develop company competences and increase competitiveness.