The Palgrave Handbook of Managing Continuous Business Transformation by Horst Ellermann Peter Kreutter & Wolfgang Messner

Author:Horst Ellermann, Peter Kreutter & Wolfgang Messner
Language: eng
Format: epub
Publisher: Palgrave Macmillan UK, London

Rethink Your Business Model

In many cases, digital transformation will not make the physical product disappear; instead, it will enhance existing functionalities with new digital services. Manufacturers will still be producing physical goods, but potentially with a reduced range of manufacture. The real disruptive change will happen on the commercial side through a redefinition of business models and a shift in the ownership of products in the future. As connected products now remain within reach of manufacturers and customers are no longer willing to buy and own products, but simply want to use them, ownership is likely to also stay with the manufacturers. Companies then have to come up with new ways of charging for the services their products provide for customers, and of running a business based on this. Interesting examples of this change can already be seen in the market, such as the air as a service model from Kaeser Kompressoren, which found a new way of selling its air compression products, or Hilti, the drilling machine company that now offers holes as a service instead of selling physical drilling machines.

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