The Impact Mechanisms of Manufacturing Servitization on Firm Profitability

Abstract

With intensifying global manufacturing competition and increasingly diversified customer demands, manufacturing servitization has become a critical path for enterprises to build sustainable competitive advantages. This paper aims to deeply explore the intrinsic mechanism through which manufacturing servitization affects corporate profitability. The research first defines the concept and modes of manufacturing servitization, and then constructs a theoretical framework centered on "Servitization Mode → Mediating Path → Profit Outcome". The article elaborates on how servitization ultimately impacts corporate revenue growth, cost structure optimization, and profit stability enhancement through three core pathways: differentiated competitive advantage, value chain restructuring and optimization, and ecosystem value creation. Simultaneously, this paper identifies and analyzes the main challenges faced during this influence process, such as ambiguous strategic positioning, organizational change resistance, and capability gaps, and proposes corresponding strategic implementation paths. By systematically revealing the internal mechanism, this study provides a theoretical basis and practical guidance for enterprises to effectively promote servitization transformation and achieve value addition and profitability enhancement.