Service Innovation Decision for Manufacturing Enterprises Based on a Coopetition Perspective

Based on a product’s technology, service innovation can enable manufacturing enterprises to alleviate the fierce market competition brought about by product homogeneity. However, excessive investments in services may cause manufacturing enterprises to fall into the servitization paradox, and the service-oriented transformation of enterprises cannot bring more benefits. Therefore, determining the optimal service innovation investment, service price, and service level becomes an important issue to get out of servitization paradox. This study explores the service innovation of two horizontal manufacturing service integrators (MSIs) by considering the influence of competition and cooperation. We construct a game model to obtain the optimal decision for MSIs. We find that cooperating with competitors for service innovation can achieve higher service levels and demands. However, cooperation is not always better; there is a favorable environment for cooperation that enables MSIs to obtain higher profits with lower service prices and service innovation investments. Additionally, the spillover effect of the competition strategy is positively related to the service innovation performance of MSIs, but it has almost no effect under the coopetition strategy. These findings provide guidance for the sustainable development of manufacturing enterprises’ servitization