This study aims to investigate how manufacturing firms operating under resource constraints leverage frugal innovation capabilities to transition toward servitization and strengthen their competitive positions in industrial markets.
A multiple-case study design was used to analyze nine Vietnamese industrial firms. Data were collected through semi-structured interviews, internal documents and site observations and analyzed using thematic cross-case coding.
The study identifies three analytically distinct yet interrelated pathways through which frugal innovation supports servitization: (1) efficiency-driven service expansion, (2) customer-proximity service augmentation and (3) modular frugal service systemization. Firms were found to creatively redeploy internal capabilities to develop integrated service offerings despite financial and institutional constraints.
Industrial managers in emerging markets can harness frugal internal capabilities to deliver tailored service solutions, deepen customer relationships and achieve competitive resilience without relying on external investment.
This study extends the literature by conceptualizing frugal innovation as a microfoundation of the dynamic capabilities that enable servitization. It contributes a new understanding of how industrial firms can pursue service-based growth strategies under resource constraints and presents clear implications for B2B marketers and strategists.
