Advanced services help companies grow faster and create better profit margins
The question of how to grow profitably is high on the strategic agenda of most companies, yet only few are able to realize it. Many businesses are struggling to maintain their existing revenue and profit margins, let alone achieve ambitious growth rates, while others are exhibiting very healthy growth rates. Our European partner Noventum recently published the findings of a year long study they conducted on Drivers for Growth in the service industry. The study attempts to identify factors that influence the growth and profitability disparity that exists between companies.
Given the fact that significant variations appear in the growth strategies companies choose and the role services play within this strategy, Noventum’s research set out to answer the following two questions:
1. Which are today’s and tomorrow’s key drivers for profitable growth?
2. What role do services play in respect of growth?
The research included in-depth interviews and a survey conducted among board members, service managers and directors, primarily from B2B product-orientated companies. The key findings indicate that companies pursuing a broad portfolio of growth strategies, including advanced services, grow faster and have better profit margins. Other success factors for growth are innovation for customer value, agility and alignment of service and corporate values.