Abstract: The aim of this paper is to describe and further develop existing models of service transition; that is, how companies position and move on the goods-to-services continuum. This study concludes that service transition can be profitable for manufacturing firms as long as they do not become stuck in a mismatch between their organisational arrangements and their offerings. The paper contributes by: providing an overview of companies’ positions on the goods-to-services continuum, introducing movements on the continuum, suggesting service development as a possible engine of renewal and providing empirical evidence on the relationship between positions on the continuum and profit margins.