ICCG Insights

Breakthrough Business Models, Part 1: Why Equipment Dealers And Rental Firms Need Them

Written by Harriet Schneider | May 17, 2018 12:00:00 PM

Most construction equipment and rental dealers will admit that there is less differentiation between products today, resulting in increasing pressure on prices and lower margins.  Parts are available from a proliferation of sellers and it’s easier than ever for customers to shop for the lowest price.  Customers want to own less and rent more.  We have technology with the potential to improve productivity and profitability for dealers and their customers, yet adoption lags. Why? In a Fast Company article , authors John Elkington and Richard Johnson argue that we need more breakthrough business models, not breakthrough technology.

“Business models are what connects a technology’s potential with real market needs and consumer demand,” says the authors. 

Strategy consultant and author Kay Plantes, believes that business models have become a key way to differentiate from the competition, replacing product features and benefits. A business model defines how will you create, deliver and capture value for your customers.  

Consider how these innovative business models enabled these companies to differentiate themselves in their markets:

 

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  • Cemex created a business model based on reacting quicker than any competitors. Instead of providing ready-mix concrete (a product), they promise cement delivery within 20 minutes of a request.
  • Engine manufacturer Rolls Royce shifted from selling engines to selling “uptime.” This move redefined its operations and created a new industry standard.
  • Gardner Denver used aggregated data to change its business model. By integrating wireless monitoring throughout its industrial product line, they were able to identify service opportunities based on real-time feedback and aggregated data from customers.
  • Harley-Davidson’s business model focuses on experiential services that support the brand. By offering riding classes through their dealerships, they create community and are able to drive product sales and loyalty.

Continue reading this blog from Infor.

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