Industrial solution business – transition from product to solution offering
Pekkarinen, Olli (2013-11-29)
Väitöskirja
Pekkarinen, Olli
29.11.2013
Lappeenranta University of Technology
Acta Universitatis Lappeenrantaensis
Julkaisun pysyvä osoite on
https://urn.fi/URN:ISBN:978-952-265-514-1
https://urn.fi/URN:ISBN:978-952-265-514-1
Tiivistelmä
The business logic in the manufacturing industry has changed in the 21st century. In the current
industrial market, manufacturers are driven to provide more comprehensive offerings that go
beyond the traditional product-orientation by providing capacity and availability for their
customers. From incidental merchandise, services have become the core of manufacturers’ offerings
with long-lasting service agreements over the life-cycles of their products. This change is driven
both by the need of providers to grow and gain competitive advantage and by increased customer
demand caused by customers’ outsourcing trends. The three key drivers for manufacturers’ service
strategies are outsourcing trends, saturation of the installed base, and commoditization in product
markets. Thus, manufacturers focus on providing industrial solutions which are delivered through
relational processes with customers by using solution-driven business models. In the management
of marketing activities, this can be regarded as closer customer relationships, service-dominant
business logic, and collaboration in solving customers’ problems. However, there are few studies on
comprehensive conceptualizations of a solution offering that include different elements and their
roles, especially in the context of capital goods industry. Also the transition process needs further
studies in a real life context.
This study explores the transition process of an industrial company from product to solution
business and, as an aid to managing the solution business, explicates the structure and management
of an industrial solution offering. There are two themes, the industrial transition process and industrial solution offering. Regarding the industrial transition process, the aim is to understand the
supplier view on the process and its execution and to determine the challenges related to the
transition process. The industrial solution offering is discussed by its elements and characteristics,
as well as management. Furthermore, a special type of build-own-operate-transfer business model is
presented and its suitability in the industrial context analyzed.
The study includes findings achieved by qualitative methods and from four case companies. Based
on the results, it is tentatively suggested that in the industrial solution business, the transition from
product to solution business is not a linear project but an evolving process that varies according to
customer needs, which suggests that companies need to possess an ability to develop new business
models for different customer needs. The industrial solution offering is dynamic as it evolves in
collaboration according to the prevailing and latent customer needs, which suggest restructuring of
the organization from a product-centric to a customer-centric one. Furthermore, based on the
findings, the concept of industrial solutions is defined as an ongoing relational process to satisfy a
customer’s particular business or operational requirements, and the concept of industrial solution
offering as an entity comprising the customized goods, services, collaboration, and finance needed
to fulfill the industrial solution. Finally, the study offers several managerial implications for
industrial managers involved in the transition and management of the solution business and its
offering.
industrial market, manufacturers are driven to provide more comprehensive offerings that go
beyond the traditional product-orientation by providing capacity and availability for their
customers. From incidental merchandise, services have become the core of manufacturers’ offerings
with long-lasting service agreements over the life-cycles of their products. This change is driven
both by the need of providers to grow and gain competitive advantage and by increased customer
demand caused by customers’ outsourcing trends. The three key drivers for manufacturers’ service
strategies are outsourcing trends, saturation of the installed base, and commoditization in product
markets. Thus, manufacturers focus on providing industrial solutions which are delivered through
relational processes with customers by using solution-driven business models. In the management
of marketing activities, this can be regarded as closer customer relationships, service-dominant
business logic, and collaboration in solving customers’ problems. However, there are few studies on
comprehensive conceptualizations of a solution offering that include different elements and their
roles, especially in the context of capital goods industry. Also the transition process needs further
studies in a real life context.
This study explores the transition process of an industrial company from product to solution
business and, as an aid to managing the solution business, explicates the structure and management
of an industrial solution offering. There are two themes, the industrial transition process and industrial solution offering. Regarding the industrial transition process, the aim is to understand the
supplier view on the process and its execution and to determine the challenges related to the
transition process. The industrial solution offering is discussed by its elements and characteristics,
as well as management. Furthermore, a special type of build-own-operate-transfer business model is
presented and its suitability in the industrial context analyzed.
The study includes findings achieved by qualitative methods and from four case companies. Based
on the results, it is tentatively suggested that in the industrial solution business, the transition from
product to solution business is not a linear project but an evolving process that varies according to
customer needs, which suggests that companies need to possess an ability to develop new business
models for different customer needs. The industrial solution offering is dynamic as it evolves in
collaboration according to the prevailing and latent customer needs, which suggest restructuring of
the organization from a product-centric to a customer-centric one. Furthermore, based on the
findings, the concept of industrial solutions is defined as an ongoing relational process to satisfy a
customer’s particular business or operational requirements, and the concept of industrial solution
offering as an entity comprising the customized goods, services, collaboration, and finance needed
to fulfill the industrial solution. Finally, the study offers several managerial implications for
industrial managers involved in the transition and management of the solution business and its
offering.
Kokoelmat
- Väitöskirjat [1037]