Exploitation or exploration in service business development? : Insights from a dynamic capabilities perspective

Purpose – The paper aims to explore how dynamic capabilities of sensing, seizing and reconfiguring shape the way in which service business is developed in a broad range of capital goods industries. Design/methodology/approach – The paper takes an interpretative multiple‐case study approach. It seeks to develop primary organizing themes around the key dynamic capabilities and support them with research propositions. Findings – The findings suggest that companies either exploit or explore the opportunities when it comes to service business development. Moreover, dynamic capabilities differ between the two approaches and predict which way a company chooses. Research limitations/implications – Research limitations are mainly due to the nature of qualitative research. The dynamic capabilities identified here are by no means exhaustive; rather, they indicate directions for future research. Practical implications – The research findings provide guidance to managers as to how the strategic shift towards services is influenced by dynamic capabilities. Originality/value – Despite difficulties associated with service business development, the literature remains relatively silent on dynamic capabilities. However, dynamic capabilities are essential to the strategic shift towards service business.