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How could service-orientation contribute to business performance: The mediation effect of service practice

As market competition intensifies, the profit margin of traditional manufacturing industry is decreasing. Commentators suggested to choose a service-oriented strategy and develop more and better services to meet customer needs, for the purpose of achieving competitive advantage and enhancing business performance. Though many researchers have validated the positive relationship between service-oriented strategy and business performance, the mechanism of such relationship is not clear yet. Our study aim to fill the gap, discussing the mediation effect of service practice. Result show that: service orientation is positively related to business performance, and this positive relationship is mediated by service practice. Our research furthers the theory of service orientation and provide guidelines for manufacturing managers. Future studies should focus on the impact of customer orientation on service practice and service orientation strategy.