Winning Service Strategies: How to Stay Ahead in a Changing Market

Drive growth by solving emerging customer needs, while enhancing existing

The service landscape for B2B manufacturers is evolving rapidly. While many companies prioritise digital tools and operational improvements, these efforts alone do not ensure growth. The true winners are those who make strong strategic choices about where to play, how to wind, and which capabilities to develop for long-term differentiation.

The service industry is evolving fast—are you keeping up or falling behind?

The service landscape for B2B manufacturers is undergoing a major shift. Digitalisation is transforming not only how manufacturers operate but also customer expectations. Businesses now demand smarter, more integrated solutions that help them optimise operations, reduce costs, and drive better outcomes.

At the same time, new entrants—often digital-native companies—may enter the market with tech-driven, data-centric, integrated service models. These companies aren’t burdened by legacy structures and can move quickly, offering innovative solutions that challenge traditional service models.

To stay competitive, manufacturers must go beyond incremental improvements and rethink their service strategies to create meaningful differentiation.

The Problem: Why Most Service Strategies Fall Short

Many service leaders understand the need for transformation, yet most focus on sustaining strategies—initiatives like predictive maintenance, remote support, and performance-based contracts. While these efforts are necessary, they primarily protect existing businesses rather than drive true competitive advantage.

The challenge? These initiatives are becoming industry standards—they no longer set companies apart. Meanwhile, digital-native players and tech-driven service providers are gaining ground, offering scalable, AI-driven, and customer-centric services that redefine how businesses manage their assets and operations.

Without a bold, forward-looking strategy, traditional manufacturers risk losing relevance, market share, and opportunities for long-term growth.

The Stakes: Falling Behind or Pulling Ahead?

The risk isn’t just slow growth—it’s losing ground entirely. Without a strong, forward-looking service strategy, manufacturers risk becoming commoditised and forced to compete on price rather than value. When service offerings become indistinguishable, margins shrink, and differentiation disappears.

Meanwhile, digital disruptors are on the horizon and may establish themselves as more credible and valuable solution providers, offering better, more comprehensive, and remarkable solutions to the customer’s emerging needs.

Winning in this new landscape requires more than incremental improvements. It demands strategic choices, such as focusing on emerging customer needs, developing unique value propositions, and building competitive advantages that digital-first competitors cannot easily replicate.

Winning Strategies for Differentiation

The concept of making deliberate strategic choices for a winning strategy stems from the framework introduced by Lafley and Martin in Playing to Win.

To succeed in the evolving service landscape, B2B manufacturers need a clear and bold strategy—one that goes beyond maintaining the status quo and instead creates lasting competitive advantages. The key lies in two critical choices:

Where to Play: Identifying Emerging Customer Challenges

The best service growth doesn’t come only from enhancing existing offerings (what all competitors do exactly the same way) —it comes from addressing larger customer challenges. Instead of concentrating only on operational efficiencies or cost reductions, leading manufacturers recognise unmet needs and emerging pain points in areas such as:

• Asset performance and reliability
• Sustainability and compliance pressures
• Workforce shortages and skill gaps
• End-to-end operational efficiency

By shifting the focus from services that maintain assets to services that improve business outcomes, manufacturers can create new demand, stronger customer relationships, and higher-margin revenue streams.

How to Win: Differentiating Through Remarkable Solutions

Standing out requires more than just adding digital layers to existing services. To win in a changing market, manufacturers must develop solutions that are:

• Leveraging proprietary data– Turning unique insights from installed bases into smarter, more predictive services.
• Combining deep industry expertise with technology– Offering not just digital tools but strategic guidance on using them effectively.
• Building service models that create measurable business impact– Moving from equipment support to services that directly improve customer operations and outcomes.

Manufacturers that embrace these principles don’t just compete—they redefine the market. Instead of offering “me-too” digital services, they build remarkable solutions that customers can’t get anywhere else.

Winning in Action: How Leading Manufacturers Differentiate

Industry leaders aren’t just improving services—they’re making bold strategic choices that set them apart. Here’s how some manufacturers have successfully built winning service strategies:

Hilti: From Selling Tools to Managing Productivity
Instead of just selling power tools, Hilti developed a Fleet Management service that helps large construction firms optimise tool availability, reduce downtime, and control costs. This shift from product sales to a subscription-based service model provides ongoing customer value while securing long-term revenue.

MAN Trucks: Enhancing Efficiency with Driver Monitoring
MAN Trucks introduced a driver behaviour monitoring system that helps fleet operators reduce fuel consumption, lower operational costs, and improve safety. MAN provides measurable business impact by leveraging real-time vehicle data and AI-powered insights, strengthening customer relationships and creating a competitive edge.

Caterpillar: Outpacing the Industry with Superior Service Capabilities
While many competitors have adopted predictive maintenance, Caterpillar built industry-leading capabilities in IoT connectivity, data analytics, and AI-driven insights—enabling them to go far beyond basic condition monitoring. Their ability to capture, analyse, and act on real-time equipment data at scale has allowed them to develop high-value service offerings that competitors struggle to match. By investing early and continuously advancing its data-driven service capabilities, Caterpillar has set the industry standard and secured a strong competitive advantage.

Each of these companies made deliberate strategic choices—not just by adopting new technologies, but by rethinking their service models to solve bigger customer challenges. This is what separates those who lead the market from those who follow it

Developing Core Capabilities to Support Growth

An essential part of a winning service strategy is to develop critical internal capabilities—the skills, processes, and infrastructure that enable differentiation and sustained growth. While many companies invest in digital tools, true competitive advantage comes from a unique mix of capabilities that competitors can’t easily replicate.

Key areas to focus on include:

• AI-Powered Analytics & Data Mastery – Moving beyond basic predictive maintenance to leveraging proprietary data for deeper customer insights and smarter service offerings.
• Customer Success & Advisory Models – Developing new service approaches that shift from transactional support to proactive partnership and consulting.
• Ecosystem Integration & New Service Delivery Models – Expanding beyond traditional service structures to offer new types of value-added services, such as training, software solutions, and sustainability advisory.

Companies that build these capabilities aren’t just improving services—they’re reshaping the role they play in customers’ businesses.

Building the Right Supporting Systems

Even the best strategies and capabilities can fall short without the right internal alignment. To scale and sustain service differentiation, companies must embed their strategy into management systems, performance metrics, and organizational culture.

• Innovation Capacity – Investing in structured service innovation processes to continuously identify and develop new growth opportunities.
• Talent Development – Upskilling teams with the expertise needed to deliver high-value services, including digital fluency, consultative sales, and strategic problem-solving.
• Service-Centric KPIs– Shifting from traditional service metrics (uptime, response time) to business-impact-driven KPIs that align with customer value and differentiation.

Manufacturers that align their people, processes, and priorities with their strategic choices can increase differentiation and maintain a competitive edge in an evolving market.

Key Takeaways: The Future of Winning in Service

Competing in services is no longer about simply keeping up—it’s about making bold, strategic choices that drive real differentiation. Manufacturers that continue to rely on standard service offerings will struggle to stand out in an increasingly competitive market.

Winning service leaders are those who:

• Look beyond common initiatives and focus on solving emerging customer challenges.
• Develop remarkable, differentiated solutions that leverage data, expertise, and business impact.
• Build the right internal capabilities and management systems to scale and sustain service innovation.

The future of service belongs to those who play to win—by shaping new markets, creating new customer value, and staying ahead of digital disruptors.

Learn from Industry Leaders: Winning Service Strategies in Action

Want to explore winning service strategies to drive growth and stay ahead of the competition?

Join us at the Service Transformation Summit on Driving Growth with Next-Generation Service Models.

Discover:
✅ How to move beyond fundamental service initiatives and create a differentiated strategy
✅ Key choices that separate market leaders from those just keeping up
✅ Best practices from industry leaders who are shaping the future of service

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Take the lead in building a service strategy that delivers a real competitive advantage.