The purpose of this study is to improve the current understanding of the
ways a manufacturer can learn to leverage the benefits associated with
modular solution designs in its transition to a solution provider. We
find that a modular solution design acts as a key integration mechanism,
allowing the provider to orchestrate actors in the supply network for
simultaneous exploitation of resources related to the existing solution
modules and exploration of new ones. Yet, to implement a modular
solution design effectively, the provider needs to engage in strategic
learning that improves its ability to explore customers' readiness to
adopt new types of solutions, while it develops an ability to deploy the
derivative solutions by utilizing the resources related to its core
product business. Mastering the co-evolutionary processes of strategic
learning that combine elements of explorative and exploitative learning
facilitates a pursuit of the industrializer path to service-based
growth. For managers, our findings demonstrate the ways a manufacturer
may unlock the economies of scale in solution business by leveraging the
benefits of a modular solution design.