Servitization and Strategy Implementation in Healthcare

This assignment explores the concept of servitization within the healthcare sector, specifically focusing on its influence on strategic decision-making and implementation. It encourages students to critically evaluate theoretical frameworks related to servitization and strategy, drawing upon examples from Malaysia's healthcare system. The task involves examining relevant research papers and potentially conducting case studies to demonstrate the practical implications of servitization in this context.

Gobaind Naidu
Research Proposal
Factors influencing the successful implementation of a new digital Servitization
strategy.

Research Proposal 1
Abstract
Malaysian Healthcare sector is an increasingly important or one of the booming industry
as it is proved to be a sustainer in global economic climate. As the Malaysian Government is also
trying to promote Malaysia as a healthcare destination and is focusing on developing the health
tourism industry, with the increasing focus of healthcare, it has become more relevant to
introduce new digital technology to improve the level of service and engagement with patients,
hence the buzzword - Servitization strategy in order transform private healthcare. Servitization is
process of transformation. It is a way of bringing differentiation in the competitive era and it’s
goal is to bring intense customer relationship and satisfying customer at all the level. Digital
Servitization is the new technique which each and every company nowadays is trying to
introduce in their organization to offer bundle of services in to achieve delighted customers. But
bringing in new strategy and adding competitive advantage to any organization is always a big
task, as there are many organizational forces which influences the successful implication of the
same. So it is very necessary to understand what the Factors are that influence the successful
implementation of a new digital Servitization strategy for Private Healthcare sector in Malaysia.
Keywords: [Digital Servitization, Private Healthcare, Strategy.]

Research Proposal 2
Table of Contents
Abstract.......................................................................................................................................................1
Chapter 1 Introduction & Background of Research.....................................................................................4
1.1Justification and Relevance of the study............................................................................................5
1.2 Relevance to the Private Health Care Sector.....................................................................................5
1.3 Relevance to the Academicians, Students and others.......................................................................5
1.4 Need & Scope of Study......................................................................................................................6
1.5 Research Objective:...........................................................................................................................6
1.6 Research Question.............................................................................................................................6
Chapter 2 Review of Literature....................................................................................................................7
2.1 Servitization.......................................................................................................................................7
2.2 Strategy Implementation...................................................................................................................8
2.3 Private health Sector of Malaysia......................................................................................................9
2.4 Research Gap...................................................................................................................................10
2.5 Objective of the Study.....................................................................................................................10
Chapter 3 Research Framework & Design.................................................................................................11
3.1 Research Framework.......................................................................................................................11
.................................................................................................................................................................. 11
3.2 Detailed hypothesis of the Study.........................................................................................................12
3.3 Research Design...............................................................................................................................14
3.4 Research Methodology:...................................................................................................................14
3.5 Sampling design...............................................................................................................................14
3.5.1 Universe....................................................................................................................................14
3.5.2 Sampling Unit...........................................................................................................................14
3.5.3 Sampling Frame........................................................................................................................14
3.5.4 Sampling Technique.................................................................................................................14
3.5.5 Sampling Size...........................................................................................................................14
3.6 Data Collection Technique...............................................................................................................15
3.7 Statistical Techniques for Data Analysis...........................................................................................15
3.7.1 Descriptive statistics.................................................................................................................15
3.7.2 Reliability.................................................................................................................................15

Research Proposal 3
3.7.3 Validity.....................................................................................................................................15
3.7.4 Normality Test..........................................................................................................................15
3.7.5 Hypothesis Testing...................................................................................................................15
3.8 Limitations of the study...................................................................................................................15
References.................................................................................................................................................17

Research Proposal 4
Chapter 1 Introduction & Background of Research
Malaysian healthcare industry is one of the most booming industry, having contributed
approximately RM 1bn (Malaysian Ringgit one billion) to the national GDP (Gross Domestic
Product) during 2016. In 2017 it’s impact on GDP is expected to increase by 33%. With its
increasing importance in national economy the Malaysian government has chosen to prioritize
the same and have injected RM 23bn (Malaysian Ringgit 23 billion) in 2016 which is
approximately 10% of the National annual budget. (Macleod, 2017)
The government is targeting to focus on private healthcare system as the government
plans to make Malaysia as healthcare destination. With increasing importance of healthcare
industry it is very essential to concentrate on enhancing the level of service provided by the
private healthcare system in order to improve the service level and bring in differentiation
(Macleod, 2017)
Digital Servitization is the new buzz word in the market that has the potential to bring in
the required differentiation in an organization. Servitization is actually the transformation
journey of the organization to bring customer in focus and giving high level of integrated and
bundled package of product and service to the customer. In service industry where the core
offering of industry is not a physical product, there the company tries to bring in digital
Servitization in order to improve the service level.
Introducing new strategy to any industry is always a big task, as there are many factors
which influence the smooth functioning of any strategy. This research proposal sought to study
the factors which influence the successful implementation of the new Servitization strategy in the

Research Proposal 5
private healthcare sector in Malaysia and the impact of those factors on successful
implementation of new digital Servitization strategy in the private healthcare center of Malaysia,
there are total 12 private healthcare centers in Malaysia to get the authentic result survey will be
done on all the managers of the 12 hospitals, data collection will be done through self-made
questionnaire, data analysis will done through Structure Equation Modelling with the help of
SPSS version 22.
Figure 1: Digital Servitization
Source: McKinsey Digtal Patient Survey, 2014
Public sector enterprises have limited budget in regards to new product and processes
development. Faced with budgetary crunch they are more reluctant to adopt new features as
Servitization, as their main endeavor remains focused on catering to broader spectrum of patients
at cost affordable rates. Private sector on the other hand might face more time related constraints
especially in regards to management decisions. Private sector however have more readiness to

Research Proposal 6
the concept of servitization. Servitization can lead to tremendous benefits for catering to quality
services in health care. The scope of this study concerns implementation challenge in digital
Servitization strategy. Digital Servitization can lead to enhancement of core competency with
higher profitability trends. Malaysia depicts leading trend globally in servitization across its
private sector. It has dynamically transformed ways in which patient care is provided. It can lead
to creating sustainability for the future of healthcare organisations.
1.1Justification and Relevance of the study
Various studies on Servitization, marketing strategies and its implication have been done
but none of them has been done in regard to private health care sector of Malaysia, lack of such
study provides motivation and scope for the present study.
1.2 Relevance to the Private Health Care Sector
 This study enables us to comprehend the significance of digital Servitization in the
private health care sector of Malaysia.
 The results of the study will help the managers of private health care sector thus they
will be able to have a better insight on the implication of strategy in their organization.
1.3 Relevance to the Academicians, Students and others
 The study will help in understanding the digital Servitization and factors affecting the
successful implications of them in private healthcare sector of Malaysia.
 The study will contribute to the existing body of knowledge and provide new dimensions
for further studies.

Research Proposal 7
Hence, the proposed study would be a systematic attempt to analyze diverse dimensions of
implications of digital Servitization in private healthcare sector of Malaysia.
1.4 Need & Scope of Study:
Present study is an attempt to understand the factors and its impact on successful
implication of digital Servitization in private health care sector of Malaysia. This will help in
understanding determinants that will lead to successful implication of digital Servitization in the
healthcare industry and managers will be able to know which factor contributes more in
successful implication of Servitization strategy in private health care sector in Malaysia.
1.5 Research Objective:
To find out the influence of Mackinsey’s 7’S model on new digital Servitization strategy
in private healthcare sector of Malaysia.
1.6 Research Question
What are the factors which influence the implication of the new digital Servitization
strategy and which factor influence the most in strategy implementation?

Research Proposal 8
Chapter 2 Review of Literature
This part of proposal has been divided in three categories including research papers on
Servitization, Strategy Implementation and Malaysian healthcare industry.
2.1 Servitization
According to Ahmad, Kamoshida & Inohara (2013), in his research paper sought to study
the influence of the organizational factors in effective implementation of Servitization strategy,
researcher has done his study on the 3 international electronic companies including Toshiba,
Fujitsu and Hitachi. With the help of review of literature factors revealed were vision,
organization, HRM, Marketing and leadership. Research proved that organizational forces do
have positive influence on successful implementation of Servitization strategy in the
organization and the study revealed that that vision, leadership and organization has the
significant positive influence on the organization from all the other factors mentioned (Ahmad,
Kamoshida & Inohara, 2013).

Research Proposal 9
Figure 2: Global Servitization Rates
Source:
https://www.researchgate.net/publication/265006912_The_Servitization_of_Manufacturing_Furt
her_Evidence
Public Sector healthcare organisations in Malaysia are lesser responsive to digitalisation
and hence adopting trends related to servitization. These organisations are already facing
challenges pertaining to handling of large number of patients. With steady inflow of large
number of patients to cater to, there remains limited scope for application of issues realted to
servitization. Private sector organisation on the other hand needs to adopt more servitization
related aspects such that they are able to cater to highest possible quality in healthcare. This will
create sustainability for the organisations with emergent scopes and will create extended benefits
for the organisations.

Research Proposal 10
Corynen, Mathyssens, & Bookhaven (2017) in his research paper studied the introduction
of digitization in offering service in the manufacturing industry, in order to reduce the errors in
service offering and to enhance the core offering of the organization, study was done on
Belgium’s manufacturing industries, researcher in their research study discussed Servitization
pyramid by which managers of manufacturing unit of Belgium can analyze the service barriers
coming, and researchers also investigated the digital application in both front and back end
operations which can help companies in addressing the problems arising in the service offering
at all the level of the organization. (Corynen, Mathyssens, & Bookhave, 2017)
2.2 Strategy Implementation
According to Rajeshkar (2014) In his research paper, studies the factors which affects the
successful implementation of the strategy in the service industry, and the impact of those factors
on effective implementation of the strategy in the electric distribution company in the Sultanate
of Oman, and the study proposed seven factors that affects the implementation of strategy and
the study also revealed that leadership is the most important factor which influence the
successful implementation of strategy in service sector. (Rajeshkar 2014)
In the views of Brinkschorder (2014) the challenges in the execution of strategy in the
organization further and the factors responsible for the successful implementation of the
organization, what challenges organization can face in execution of those strategies and what are
the solution to overcome those challenges, researcher with the help review of literature
introduced three key variables strategy, structure, and behavior interplay of which is necessary
for the performance of strategy implementation challenges like challenges in strategy
formulation and planning, challenges in consensus like improper understanding of strategy, lack
of motivation in employees, resource allocation challenges in controlling the working of

Research Proposal 11
strategy , challenges of proper communication, challenges in behavior involves commitment,
leadership and culture context. Researcher suggested strategy implementation is more complex
then strategy planning ignoring any of the part in execution can lead to a problem in the
organization. (Brinkschorder, 2014)
Mbaka & Mugambi (2014) studies the factors affecting the strategy implementation in
water sector of Kenya and the study revealed that that employees in public sector lacks the skills,
attitude and capabilities required, and another problem identified was lack of proper
communication between strategy formulators and the key strategic resources of the organization
i.e. employees of the organization as communication between management and employees,
attitude, skills and capabilities of the employees are most important things to make strategy
implication in the organization successfully, but all these were lacking in the sector under study
which lead to the failure implication of strategy. (Mbaka & Mugambi, 2014)
Ravanfar (2014) in his study of analyzing organizational structure based on 7’S model of
Mackinsey, attempted to analyze if 7’S model of Mackinsey is favorable for the Queshm free
zone a company in Iran and the study revealed that it is not favourable in the organization in the
study,as per the study all the levels of organization cannot work on same or common value.
(Ravanfar, 2014)
2.3 Private health Sector of Malaysia
Jafar, s et.al (2013) Malaysian health sector has experienced growth right from 90’s, and
it is growing at the tremendous rate, Malaysian healthcare sector is divided into two sector public
and private where public healthcare sector holds 70% share and remaining 30% is of private
Malaysian government has a strong vision of making the Malaysian healthcare industry as the
world famous health tourism destination and the same is growing at the rate of 25.3% P.A

Research Proposal 12
approximately. As per the government prediction government will be hosting one lac health
travelers by 2020. (Jafar, S et.al, 2013)
Queck (2014) in his research paper studied the Malaysian healthcare system , and he
identified that Malaysian healthcare is two tired system with both public and private public
healthcare system is very equipped runs on total government budget allocation public hospitals
serve 65% of the population with low affordable fee but to serve them there are only 45% of
medical officers, Private runs wholly from the fee received from service offered researcher
suggested that two tier system cannot work efficiently in long run so he advised to have
partnership of both public and private in order to cater population and tourist easily and more
efficiently in cost effective way. (Queck, 2014)
2.4 Research Gap
The observation of the article reviewed shows that lot of studies are done on Servitization, digital
Servitization and factors affecting the successful implementation of the strategy in the
organization and private health care sector of Malaysia but none of the study has been done on
the effective strategy implementation of digital Servitization in healthcare sector of Malaysia. In
this space of time when Malaysia health care sector is on its growing phase it becomes very
essential to introduce such service model in them in order to bring competitive advantage. The
scope of this study has included several journals, literatures and findings from various websites
as well as company magazines. However, there is certain levels of accomplishments that needs to
be determined in this analysis which has not been incorporated. The study has not been able to
effectively cover scopes of public healthcare sectors. There is a large number of Malaysian
public healthcare organisations that needs to adopt strategies related to Servitization which has
been totally excluded from analysis. Secondly due to lack of time the scholar has not been able to

Research Proposal 13
conduct thorough research concerning primary levels of data hence, the scope of the study is
limited.
2.5 Objective of the Study
1. To understand the factors which influence the successful implementation of strategy.
2. To examine the relationship between Strategy and New digital servitization strategy.
3. To examine the relationship between Structure and New digital servitization strategy.
4. To examine the relationship between Skill and New digital servitization strategy.
5. To examine the relationship between Style and New digital servitization strategy
6. To examine the relationship between Staff and New digital servitization strategy
7. To examine the relationship between shared values and New digital servitization strategy
8. To examine which factor influence the implementation of New digital servitization
strategy most
Chapter 3 Research Framework & Design
This chapter deals in explanation of the research framework and research design to be
used for the study
3.1 Research Framework

Research Proposal 14
Figure 3.1 Research Framework based on Mackinsey’s 7S Framework
3.2 Detailed hypothesis of the Study
With the help of detailed literature review, below mentioned factors were recognized which
influence the successful implementation of strategy which will be used as independent variable
of the study.
1. Ho1: There is no significant positive influence of strategy on implementation of digital
Servitization strategy
Above hypothesis is the null hypothesis which need to be analyzed and is based on 7s model
of Mackinsey, here strategy means the specific plan to achieve a particular goal, thus this
Strategy
Structure
Systems
Higher degree of customer
experience through
New Digital Servitization
Strategy
Skills
Staff
Style
Shared Values

Research Proposal 15
hypothesis aims to analyze the influence of strategy framed on the implication of strategy for
particulars goals of the organization to be achieved.
2. H02: There is no significant positive influence of structure on implementation of
Servitization strategy.
Structure here refers to the environment of the organization where all the action take place.
Cross functional coordination refers to inter department coordination between different
departments, as in order to execute any strategy, all the departments should work with each other
instead of working against each other, and Control by Management refers to handling the
responsibility of managing all the employees rightly. If the vision of doing any task is lost
management should take charge to reallocate the things and guide employees properly. Another
is communication which is the heart of successful working of the organization, proper
communication should be between management and employees of all the levels so as to reach to
assigned goals.
3. Ho3: There is no significant positive influence of Systems on implementation of
Servitization strategy.
This hypothesis aims to examine the relationship of systems and implementation of strategy
systems here refers to procedures of doing things in the organization.
4. H04: There is no significant influence of Shared Values on implementation of new digital
Servitization strategy.
This hypothesis aims to examine the relationship of shared values on implementation of new
digital Servitization strategy, shared values here refers to the norms and standards in which the

Research Proposal 16
employees of the organization works. Shared values is a part of soft element of the 7’S
framework of Mackinsey.
5. Ho5: There is no significant influence of Skills on implementation of new digital
Servitization strategy
This hypothesis aims to study the relationship of skills and implementation of strategy, skill here
refers to employee’s capability of doing things in the organization. Skill is the part of soft
element of the 7’s framework of Mackinsey.
6. Ho6: There is no significant influence of Style on implementation of new digital
Servitization strategy.
This hypothesis aims to study the relationship between style and implementation of the strategy,
Style is the part of soft element of 7’s Mackinsey model style here refers to way in which
management handles the organization
7. H07: There is no significant influence of Staff on implementation of new digital
Servitization strategy
This hypothesis aims to study the influence of staff on implementation on digital Servitization
strategy, Staff here refers to the number of employees to be recruited, training and motivation for
implementation of the organization’s goals.
3.3 Research Design
This section will describe the type of Research Methodology to be used, Sampling
design, data collection to be used and tools of data analysis and data interpretation to be used.

Research Proposal 17
3.4 Research Methodology:
Exploratory cum descriptive research methodology will be used. Exploratory research
methodology will help to understand the topic more clearly and to get the current findings on the
same whereas in descriptive research methodology will help in hypothesis testing
3.5 Sampling design
Sampling procedure has been adopted for the purpose of the study as it is not possible for the
scholar to collect large amounts of data. Random Stratified Sampling technique has been adopted
for this study. A sampling group has been selected for the purpose of attaining to goals and
objectives of the study.
3.5.1 Universe: From the 12 states of Malaysia, one top hospital from each state will be selected
3.5.2 Sampling Unit: it is the geographical area which will be covered in study, thus sampling
unit for this study is Malaysia.
3.5.3 Sampling Frame: Actual respondents list on whom survey is to be done, in present study
sampling frame includes the managers of the hospitals under study
3.5.4 Sampling Technique: Whole population is to be studied.
3.5.5 Sampling Size: 240 will be the sample size of the study including managers of all the
hospitals included in the history
3.6 Data Collection Technique
Data collection Instrument: Both primary and secondary method of data collection will be
used in the study and for primary data collection self-made questionnaire will be used. 5 point
likert scale technique will be used.
3.7 Statistical Techniques for Data Analysis

Research Proposal 18
3.7.1 Descriptive statistics - like mean and standard deviation were used to understand the data,
Descriptive statistics helps in summarizing the data and is a discipline of describing the main
features of a collection of information through quantitative methods.
3.7.2 Reliability– To check the internal consistency of the question Cronbach’s Alpha reliability
test using SPSS software (Version 22) will be used.
3.7.3 Validity –To assess the validity of the questionnaire, the face validity method will be used.
3.7.4 Normality Test- To assess the normal distribution of the data collected Normality test will
be used
3.7.5 Hypothesis Testing: for hypothesis testing SEM-Structure Equation Modelling will be
used.
3.8 Limitations of the study
Although every effort will be made to undertake a representative study, still the following
problems could occur in the course of the study: There may be drop out error i.e. the respondents
who are willing as well as able may not be contacted. There may be go error i.e. the respondents
who are unable or unwilling may be included in the sample. However, the large sample base as
well as the pre-testing will further reduce the chances of these errors. There may be chances of
different perceptions on the wording of the questionnaire or scale. Hence, every effort will be
made to personally interview.

Research Proposal 19
3.9 Delimitating Clause
The study has considered analysis from private healthcare organisations only and public
healthcare organisations have been eliminated from analysis. Scope related to public sector
organisations are huge as there remains large amounts of analysis that needs to be done. As
public organisation needs to cater to large number of patients, data regarding the same will be
huge hence it has been excluded from scopes of analysis.

Research Proposal 20
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Research Proposal 21
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Research Proposal 22
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Research Proposal 23
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