Abstract: Some of the world's leading companies are changing the strategic focus of their activities and following a similar path to success. Increasingly, firms compete by selling complex products and services as integrated solutions that address the needs of large business or government-owned customers. This chapter presents empirical findings within a conceptual framework which examines how the firms are changing the strategic focus of their activities, adapting to new positions in the value chain, and developing new sets of capabilities. To provide products and services as integrated solutions, firms are building core ‘systems integration’ capabilities to provide world-class products with equipment sourced from different vendors, and moving into the provision of services to maintain, finance, and operate a product throughout its life cycle.

Keywords: integrated solutions, outsourcing, product and service bundling, value chain dynamics,