Conference article

Business Model innovation paths and success in the machine tool industry

G. Copani
ITIA-CNR – Institute of Industrial Technologies and Automation, Milano, Italy

S. Marvulli
ITIA-CNR – Institute of Industrial Technologies and Automation, Milano, Italy

G. Lay
Fraunhofer Institute for Systems and Innovation Research ISI, Karlsruhe, Germany

S. Biege
Fraunhofer Institute for Systems and Innovation Research ISI, Karlsruhe, Germany

D. Buschak
Fraunhofer Institute for Systems and Innovation Research ISI, Karlsruhe, Germany

Download article

Published in: Proceedings of the 2nd CIRP IPS2 Conference 2010; 14-15 April; Linköping; Sweden

Linköping Electronic Conference Proceedings 77:56, p. 437-444

Show more +

Published: 2012-10-11

ISBN: 978-91-7393-381-0

ISSN: 1650-3686 (print), 1650-3740 (online)

Abstract

Service-oriented business models are regarded as one of the main competitive priority for European machine builders willing to keep their global leadership; menaced by the growth of Asiatic competitors and by the financial crisis. Despite the efforts of the research community and of industrial companies in the direction of servitization; there is empirical evidence that only few companies successfully innovated their business model. In this paper; the results of an European case study research are reported; aimed at the understanding of business model innovation mechanisms and success in the machine tool sector. Companies resulted distributed in different clusters; each of them characterized by different business model innovation levels; strategic consciousness and achieved performance. The clusters suggest the existence of three alternative paths of business model innovation; which are described in the paper; showing specific innovation mechanisms that can be followed.

Keywords

Business model; machine tools; services; service strategy

References

[1] www.cecimo.eu

[2] Copani; G.; Molinari Tosatti; L.; Lay; G.; Schroeter; M.; Bueno; 2007; New Business Models diffusion and trends in European machine tool industry; Proceedings 40th CIRP International Manufacturing Systems Seminar; Liverpool 2007.

[3] Mathe; H. and Portioli Straudacher; A.; 2004;Innovative service that reinvent manufacturing; Proceedings of the IMS International Forum; Vol. 1; Cernobbio; Italy; pp. 162-70.

[4] Gebauer; H.; Fleisch; E. and Friedli; T.; 2005; Overcoming the service paradox in manufacturing companies; European Management Journal; Vol. 23; pp. 14-26.

[5] Windahl; C.; Andersson; P.; Berggren; C.; Nehler; C.; 2004; Manufacturing firms and integrated solutions: characteristics and implications; European Journal of innovation management; Vol. 7; pp. 218- 228.

[6] Cohen; M. A. and Whang; S.; 1997; Competing in Product and Service: A Product Life-Cycle Model; Management Science; Vol. 43; pp. 535 545.

[7] Brax; S.; 2005; A manufacturer becoming service provider – challenges and a paradox; Managing Service Quality; Vol. 5; pp. 142-155.

[8] Oliva; R. and Kallenberg; R.; 2003;Managing the transition from products to services; International Journal of Service Industry Management; Vol. 14; pp. 160-72.

[9] Baines; T. S.; Lightfoot; H. W.; Benedettini; O.; Kay; J. M.; 2009; The servitization of manufacturing: A review of literature and reflection on future challenges; Journal of Manufacturing Technology Management; Vol. 20; pp. 547-567.

[10] Jacob; F. and Ulaga; W.; 2007; The transition from product to service in business markets: an agenda for academic inquiry; Industrial Marketing Management; Vol. 37; pp. 247–253.

[11] Pine; J. B.; 1993; Mass Customization: The New Frontier in Business Competition; Boston; Harvard Business School Press.

[12] Anderson; D. M.; 1997; Agile Product Development for Mass Customization: How to Develop and Deliver Products for Mass Customization; Niche Markets; JIT; Build to Order and Flexible Manufacturing; Irwin Professional Pub..

[13] Bolden; R.; Waterson; P.; Warr; P.; Clegg; C.; Wall; T.A; 1997; New Taxonomy of Modern Manufacturing Practices; International Journal of Operations & Production Management; Vol. 17; pp. 1112-1130.

[14] Dugay; C. R.; Landry; S. and Pasin; F.; 1997; From Mass Production to Flexible/Agile Production; International Journal of Operations & Production Management; Vol. 17; pp. 1183-1195.

[15] Koren; Y.; Heisel; U.; Jovane; F.; Moriwaki; T.; Protshow; G.; Ulsoy; G.; Van Brussel; H.; 1999; Reconfigurable Manufacturing Systems; Annals of the CIRP. Vol. 48/2.

[16] Son; S. Y.; Olsen; T. L. and Yip-Hoi; D.; 2000; Economic benefits of Reconfigurable Manufacturing
Systems; Proceedings of the 2000 Japan USA Flexible Automation Conference Michigan; Ann Arbor.

[17] Molinari Tosatti; L.; Pierpaoli; F.; Urbani; A.; Jovane; F.; 2002; New frontiers for manufacturing in Mass Customization; Proceedings of the 35th CIRPInternational Seminar on Manufacturing Systems Seoul; Korea.

[18] Urbani; A. and Pasek; Z.; 2002; Description and analysis of a possible supply chain evolution based on a service pattern; Proceedings of the 5th International Conference on Managing Innovations in Manufacturing (MIM); Milwaukee; Wisconsin; USA.

[19] Hill; T.; 1977; On goods and services; Review of Income and Wealth; Vol. 23; pp. 315-38.

[20] Judd; R. C.; 1964; A case for redefining services; Journal of Marketing; Vol. 28; pp. 59-65.

[21] Kotler; P.; 1994; Marketing Management: Analysis; Planning; Implementation and Control; Englewood Cliffs; NJ; Pentice-Hall.

[22] Levelock; C. H.; 1983; Classifying services to gain strategic marketing insights; Journal of Marketing; Vol. 47; pp. 9-20.

[23] Rathmell; J.; 1974; Marketing in the Service Sector; Cambridge; MA; Winthrop Publishing.

[24] Shostack; G. L.; 1977; Breaking free from product marketing. Journal of Marketing; Vol. 41; pp. 73-80.

[25] Lalonde; B. and Zinszer; P. H.; 1976; Customer Service: Meanings and Measurement. Chicago; IL; National Council of Physical Distribution Management.

[26] Frambach; R. T.; Wels-Lips; I. and Guendlach; A.; 1997; Proactive product service strategies: an application in the European health market; Industrial Marketing Management; Vol. 26; pp. 341-352.

[27] Samli; A. C.; Jacobs; L. W. and Willis; J.; 1992; What pre-sale and post-sale services do you need to be competitive?; Industrial Marketing Management; Vol. 21; pp. 33-41.

[28] Homburg; C. and Garbe; B.; 1999; Towards an improved understanding of industrial services: quality dimensions and their impact on buyer-seller relationships; Journal of Business-to-Business Marketing; Vol. 6; pp. 39-71.

[29] Johansson; P. and Olhager; J.; 2006; Linking product–process matrices for manufacturing and industrial service operations; Int. J. Production Economics ; Vol. 104; pp. 615–624.

[30] Mathieu; V.; 2001; Service strategies within the manufacturing sector: benefits; costs and partnership; International Journal of service industry management; Vol. 12; pp. 451-475.

[31] Azarenko; A.; Roy; R.; Shehab; E.; Tiwari; A.; 2009; Technical product-service-systems: some implications for the machine tool industry; Journal of Manufacturing Technology Management; Vol. 20; pp. 700-722.

[32] Cook; M. B.; Bhamra; T. A. and Lemon; M.; 2006; The transfer and application of product service systems: from academia to UK manufacturing firms; Journal of cleaner production; Vol. 14; pp. 1455- 1465.

[33] Tukker; A.; 2004; Eight types of product-service systems: eight ways to sustainability?; Business Strategy and the Environment; Vol. 13; pp. 246-260.

[34] Morey; E.; 2003; Product service systems: exploring the potential for economic and environmental efficiency; www.colorado.edu/Economics/morey/4535 /students/pachecod_project-ed.pdf.

[35] Lewis; M.; Portioli Staudacher; A. and Slack; N.; 2004; Beyond products and services: opportunities and threats in servitization; Proceedings of the IMS International Forum; Cernobbio; Italy; Vol. 1; pp. 162-170.

[36] Davies; A.; 2003; Are firms moving downstream into high value services?; Ed. Joe Tidd and Frank M. Hull; Imperial College Press.

[37] Malleret; V.; 2006; Value Creation through Service Offers; European Management Journal; Vol. 24; pp. 106-116.

[38] Anderson; J. and Narus; J.; 1995; Capturing the value of supplementary services; Harward Business Review; Vol. 73; pp. 85-93.

[39] Lay; G. and Erceg; J.; 2002; Produktbegleitende Dienstleistungen: Konzepte und Beispiele Erfolgreicher Strategieentwicklung. Berlin : Springer- Verlag.

[40] Slater; R. 1999; Jack Welch and the GE Way; New York; NY; McGraw-Hill.

[41] Mathieu; V.; 2001; Product Services: from a Service Supporting the Product to a Service Supporting the Client; Journal of Business & Industrial Marketing; Vol. 16; pp. 39-58.

[42] Neely; A.; 2007; The Servitization of Manufacturing: an Analysis of global Trends; 14th European Operations Management Association (EUROMA) Conference; Ankara; Turkey.

[43] Vargo; S.; Maglio; P. and Akaka; M.; 2008; On value and value co-creation: A service systems and service logic perspective; European Management Journal ; Vol. 26; pp. 145– 152.

[44] Gebauer; H.; Krempl; R. and Fleisch; E.; 2008; Exploring the Effect of Cognitive Biases on Customer Support Services; Creativity and Innovation Management; Vol. 17.

[45] Cavalieri; S.; Gaiardelli; P. and Ierace; S.; 2007; Aligning strategic profiles with operational metrics in after-sales service; International Journal of Productivity and Performance Management; Vol. 56; pp. 436-455.

[46] Vargo; S.; Lusch; R.; Akaka; F.; He; Y; 2008; The service-dominant logic of marketing: A review and assessment; Review of Marketing Research; p. In press.

[47] Gebauer; H.; Beckenbauer; B. and Fleisch; E.; 2004. How to innovate customer support services in manufacturing firms?; Service Excellence in Management: Interdisciplinary Contributions; Proceedings of the QUIS 9 Conference; Karlstad; pp. 397-406.

[48] Hildenbrand; K.; Fleisch; K. and Beckenbauer; B.; 2004; New business models for manufacturing companies in B2B markets; Service Excellence in Management: Interdisciplinary Contributions; Proceedings of the QUIS 9 Conference; pp. 407-416.

[49] Gebauer; H.; 2008; Identifying service strategies in product manufacturing companies by exploring environment–strategy configurations; Industrial Marketing Management; Vol. 37; pp. 278-291.

[50] Biege; S.; Copani; G.; Lay; G.; Marvulli; S.; Schroeter; M.; 2009; Innovative service-based business concepts for the machine tool building industry; CIRP IPS2 Conference 2009 Proceeding Cranfield University; UK.

[51] Copani; G.; Molinari Tosatti; L.; Groothedde; R.; Palethorpe; D.; 2007; New Financial Approaches for the Economic Sustainability in Manufacturing Industry; 14th CIRP Conference on Life Cycle Engineering Proceedings; Tokyo; Japan.

Citations in Crossref