Exploring the profit model of servitising manufacturers: a resource-based perspective

Servitisation is a kind of business model innovation, and the profit model of servitisation is the core elements of this innovation. In this paper, a comparative case study of two servitising manufacturers was carried out through analysing and cross-comparing different types of servitisation profit models for different product-service offerings within both firms. We classify servitisation profit models into four categories, and then delineating basic profit model elements and finally exploring the relationships between these elements and a firm's resources, capabilities and product-service offerings. The conclusions are that, the effective integration of resources is the prerequisite to foster key capabilities so to build relevant revenue streams, thus forming appropriate servitisation profit models. Understanding the basic logic between elements within the servitisation profit model and the relationship between resources, capabilities and business offerings is critical when the manufacturer is seeking successful transition towards servitisation.