This paper aims to examine how firms are organizing to provide integrated solutions: a business model for the supply of capital goods based on the provision of products and services as integrated solutions to individual customer's needs. The industrial marketing literature suggests that the origins of this business model can be traced back to early 1960s when firms adopted strategies and organizations for ‘systems selling’. The marketing literature helps us to identify two contrasting types of organizations: (1) the vertically-integrated systems seller that produces all the product and service components in a system; and (2) the systems integrator that coordinates integration of components supplied by external firms. The paper uses these two ideal types to analyse the strategies and organizations of five case study firms that have recently attempted to move into the provision of integrated solutions. It argues that there is no evidence to support the continuing dominance of the systems seller or a simple transition from systems selling to systems integration. A more complex pattern of organizational forms is emerging, combining elements of both systems selling (i.e. vertical integration into services) and systems integration.
Bibliographical noteThis is the author’s version of a work that was accepted for publication in Industrial Marketing Management. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Industrial Marketing Management, 36, 2, 2007, 10.1016/j.indmarman.2006.04.009
- Integrated solutions
- Systems seller
- Systems integrator
- Complex products and systems (CoPS)