2016.03.11 - 2. Growth Strategies in Services - Course PDF

Growth Strategies
in Services
Lecture and case introduction
Paris, March 11th 2016
This part of the course will focus on service growth strategies

fundamentals
3 hours
"Premium clothing" teams'
results
"Premium
clothing"
Roland Berger
results
Break
Service growth
theoretical course
"EADS
Airbus" case
presentation
60 min
30 min
30 min
50 min
10 min
Focus of current presentation

2016.03.11 - 2. Growth Strategies in Services - Course.pptx
Tools
6 tools/ concepts will be developed within the course and could be

useful for the case study
Services
1 development matrix
Understanding the Services Development matrix is key to adopt

proper segmentation
Strategic
segmentation
Attractiveness /
Accessibility analysis
Performing a systematic segmentation of all potential offering is a

key driver of future profitability finding adequate criteria is key
The attractiveness and accessibility matrix is a standard tool it

must be specific to the company
Energy industry example turbine market

Services Development matrix
High value added Services
"Support-like" services
Difficulty to develop offering
GEOGRAPHY
1>
2'
Develop Business
on Customer Base
Develop Business on
Competitors' Base
e.g. advanced pilot training
e.g. leasing
Secure Core
Business
Capture
Competitors' Business
e.g. provision of
spare parts
e.g. packaged MRO1)

on all products
On own products
On all products (i.e. beyond own)
Difficulty to penetrate market segment

1) MRO: Maintenance, Repair and Overhaul
Development of efficient support on own products

is prerequisite to secure core business
2> From "support like" services on own products to
support on competitor's products:
required a switch in market strategy
2'> From "support like" services on own products to
services on own products:
required a clear switch in capabilities,
competencies and organisation (value chain
migration)
3> Development of high value-added services on
others' products is the ultimate evolution requiring:
capabilities/competencies de-correlated from core
product
very efficient market strategy (marketing,
communication)
cannot be achieved directly from step 1
2015.02.23 - 2. Growth Strategies in Services - Theory.pptx
Source: Roland Berger
Western Europe
North America
Latin & South America
Asia
Spare parts
Maintenance
Logistics
Operators
Training
Retrofit
20
Mobilization
Transformation
phase launch
Definition of
the working
principles
Mobilization Acceleration
Definition of
action plans
?
Time
Weaknesses
identification
New orientation
top-down
Productivity/
develop
cooperation
Coal plant
Gas plant
Nuclear plant
PLATFORM
(power plant type)
Attractiveness
=
Revenue
x
Growth
x
Profitability
Accessibility
=
Rivalry Intensity
x
Entry barriers
for a new
entrant
x
Company
capabilities
Most promising
services market segments
0,8
0,6
0,4
while not over detailing

market:
> not loose time on multiple
irrelevant small segments
> get a manageable number of
options
0,2
LOW
MEDIUM
HIGH
Accessibility
for the company
NB: Bubble surface proportionate to service revenues projected size

21
Objectives
of a partnership / acquisition
Continuous
improvement
on all levels
1. Size driven model
2. Search for synergies
3. Learning experience
> Take advantage of a critical

size
better bargaining power
gain access to new markets
financial power
> Combine unique contributions

specific resources
specific competences
> Acquire know-how through

practice
> Hold a key position

when it comes to setting up
a technological standard
Time
Considerable control of communication required
SUCCESS FACTORS
> Achieve management alignment and commitment
> Identify "Champions" and leverage "Multipliers"
> Mobilize employees around repeated "quick hits"
Plant operators
Institutions
1,2
23
Emotional
curve
For each targeted segment, "Make or Buy" decisions have to be

made and partnerships may have to be developed
Rationale of partnership or acquisition
Implementation
Large industries
Segmentation criteria should

allow to:
> highlight different customer
needs/ behavior
> differentiate required capabilities
> differentiate cost structures
> identify clear entry barriers and
competitive environment
Partnering or acquiring a company aims at three non-exclusive

objectives: size, synergies, and learning curve
Desired performance curve

Orientation
Private consumers
Small & Medium
industries
Success relies in people's involvement thus, the "emotional curve"

has to be actively monitored
"Emotional curve"
END-USERS
SUPPORT
& SERVICES
Make or Buy
policy
Attractiveness
for the company
A step by step strategic path to keep in mind
> Share investments

> Meet client expectations
integrated solutions
Strategic
analysis
MAKE
YES
1
Does the competency bring a

competitive advantage?
Is it core?
NO
YES
> Face a lack of competences

(local access)
Operational
analysis
> Create new competences
Could the supplier develop a strong bargaining power,

become a competitor and be operationally unstable?
Is it risky to
outsource?
NO
YES
3
Is it easy to
implement?
What are the difficulties which could slow or

threaten the implementation?
NO
YES
> Meet market challenges

focus on core business
Is it cost effective
internally?
What is the current cost performance

compared to market price?
NO
> Use a transparent and attractive incentive system

> Use effective training organization
> Structure capabilities, set-up learning organizations
31
28
BUY
PARTNER
25
Preliminary remark
This course focuses on Services as a diversification opportunity for industrial

players. Pure Services players will not be addressed
The examples and the logic developed focus on B2B high-tech long-cycle product
markets for three reasons:
> B2B industries tend to be less mature on services development
> B2B Service markets are a hot topic these years, with worldwide stakes and on-going
evolutions of business models
> B2B and B2C Services markets have different areas of complexity, mixing the two
would be irrelevant
The case you will have to study addresses the aircraft industry
Agenda
1. What does "Services" mean in the industry

and why are they attractive?
2. How to define a growth strategy in Services?
Services can be offered all along the life-cycle of a product, but most
Services are after sales services
Standard Services offered
CONCEPTION
PRODUCTION
Need analysis
UTILIZATION
Disposal/dismantling
Training
Financial services
(leasing)
PRODUCT
SALE
AFTER SALES
Maintenance
Repair
Spare parts
Modification/ upgrades
Logistics
Facility management
Pool management
Configuration management
Testing/ audit of product
Consulting services
Services have to be differentiated from two other business models:

Support and Consumables
Differences between Services, Support and Accessories / consumables
Support
Accessories/ consumables
> Activities offered to the customer and embedded in

the product sales contract
> Sale of consumables used during the life-cycle of

the product
> Distinction between Support and Services can be

difficult to draw as they often call for the same
competencies and activities but under different
contractual agreement
> Most well-known example : HP that shifted its business

model from selling printers per se to selling printers as a
means to sell ink cartridges
> Quality of Support is a key differentiator when selling

product
> Examples of Support activities:
technical issues troubleshooting (linked to initial
design)
initial provisioning of spare parts
technical documentation of delivered product
product certification

> Consumables are different from components:

consumables are elements not an integral part of the
product
components are directly parts of the product, that
might need to be changed after a pre-defined
expiration date / number of cycles
> Examples of "consumables" based business models:
printers
iPhone / iPad to a certain extent
Nespresso

Attractiveness of Services for industrial companies lies in its

revenue growth potential, its relative stability, and its good margin
Cyclical markets vs. stable revenues
> High volatility of industrial markets with a strong correlation to GDP growth
> Often stable long-term contracts on Services
Low margin on manufacturing

> Capital intensive industry business, especially for high-tech long-term industries
> High R&D cost
> Increasing raw material prices and unpredictability
Increasing competition from emerging countries

> New entrants heavily supported by government of emerging countries
high-tech/ long-cycle industry sectors are symbols of national power
> Low-cost countries gaining technical capacities
Demand pulling the offer for Services

> Increasing outsourcing of non-core activities:
financial pressure
focus on core competencies of industrial companies
> Evolution of customers procurement policy from product to solution
Competition is usually fiercer

on the manufacturing side and
margins are under pressure
Service development
represents an important
opportunity for several
industries now facing very
competitive markets:
> Automotive
> Information Technology
> Energy
> Transport
>
Main industrial companies have
therefore developed aggressive
growth strategy in Services
Example: Aerospace & Defense
This rush into Services market concerns all market players:

integrators as well as major suppliers who started years ago
Example of the Aerospace & Defence (A&D) industry
Weight of services
Examples [% of revenues, 2007]
2013 Roland Berger A&D

Top Management Issue Radar
33%
23%
15%
16%
17%
25%
18%
Survey conducted every year over more

than 100 top managers across six countries
48 companies represented covering
integrators, Tier-1, Tier-2 and pure services
players
87% of respondents consider growth
10%
through a broader product / services

portfolio
88% of respondents intend to develop

EADS
Northrop Lockheed
Grumman Martin
Finmeccanica
Boeing
Thales
Tier-1 suppliers
Cobham
BAE
the share of Services (on current reach

target growth)
Tier-1 suppliers
Integrators
Source: Companies Data, Roland Berger Top Management Issue Radar 2013
10
Customers' willingness to secure their operating costs triggers the

development of "Services solutions"
Customers' push for outsourced solutions
Services solutions examples
> New Business Models based on a maximum

outsourcing (variabilization of costs)
e.g. Low Cost airlines
Truck tires sold by the kilometer
> Difficulties to finance initial investments

e.g. state infrastructure projects
Design/ Build/ Operate parking

for municipalities
> More and more complex technologies requiring scarce

competencies
e.g. composite in the aviation industry
Retrofit services on their turbines
> Cost optimization and predictability

e.g. spare parts' pool sharing
e.g. spare by the hour/ kilometer/ event services
(TCO1) approach)
JV to provide services to petroleum

and gas companies (e.g. boring)
1) Total Cost of Ownership

11
Agenda
1. What does "Services" mean in the industry

and why are they attractive?
2. How to define a growth strategy in Services?
15
Defining a growth strategy in Services is a complex and challenging

project
Generic approach for growth strategy
PHASE 1
Market analysis
PHASE 2
Strategic analysis
Attractiveness of
market
segments
Accessibility
of market
segments
Market strategic
segmentation
Most
Promising
Business
opportunities
PHASE 3
Moving forward
Internal
implications
Priority
Business
opportunities
FOR THE
COMPANY
Gap
analysis
Selection
of strategic
options
Strategic
roadmap
External
implications
Risks of
market
segments
Competitive
environment
Organizational
Implications
Strengthening of
Company
capabilities
Target
screening
potential
acquisitions /
partnerships
Business
and
implementation
Plan
Competitiveness
of the Company
per market
segment
Key Success Factors

Key Selection Criteria
MOST COMMON PITFALLS

Key step too often by passed
Company
capabilities
Too often solution-driven

2 to 3 years, especially in long-cycle industry
Underestimation of services complexity and

cultural/ change organizational
16
We will focus on five tools/ concepts used within a Services Growth

project
PHASE 1
Market analysis
PHASE 2
Strategic analysis
PHASE 3
Moving forward
Attractiveness
Market strategic
segmentation
Accessibility
Priority
Business
opportunities
FOR THE
COMPANY
Most
Promising
Business
opportunities
Internal
implications
Gap
analysis
Risks
Competitive
environment
Services development matrix
Strategic segmentation
Attractiveness/ Accessibility analysis
Source: Roland Berger analysis
Strategic
roadmap
External
implications
Strengthening of
Company
capabilities
Target
screening
potential
acquisitions /
partnerships
Business
and
implementation
Plan
Competitiveness
of the Company
per market
segment
KSF
Key Success Factors
Key Selection Criteria
KSC
Selection
of strategic
options
Organizational
Implications
Company
capabilities
Make or Buy strategy
Objectives of a partnership/ acquisition
Emotional curve
18
Tools
Services Development Matrix
Strategic segmentation
19
Understanding the Services Development matrix is key to adopt

proper segmentation
High value added Services

"Support-like" services
Difficulty to develop offering
Services Development matrix
A step by step strategic path to keep in mind
2'
Develop Business
on Customer Base
Develop Business on
Competitors' Base
e.g. leasing
e.g. advanced pilot training
Secure Core
Business
Capture
Competitors' Business
e.g. provision of
spare parts
e.g. packaged MRO1)

on all products
On own products
On all products (i.e. beyond own)
Difficulty to penetrate market segment

1) MRO: Maintenance, Repair and Overhaul
1>
Development of efficient support on own products

is prerequisite to secure core business
2> From "support like" services on own products to
support on competitor's products:
required a switch in market strategy
2'> From "support like" services on own products to
services on own products:
required a clear switch in capabilities,
competencies and organisation (value chain
migration)
3> Development of high value-added services on
others' products is the ultimate evolution requiring:
capabilities/competencies de-correlated from core
product
very efficient market strategy (marketing,
communication)
cannot be achieved directly from step 1
20
Performing a systematic segmentation of all potential offering is a

key driver of future profitability finding adequate criteria is key
Energy industry example turbine market
GEOGRAPHY
Western Europe
North America
Latin & South America

Asia
Spare parts
Maintenance
Logistics
Operators
Training
Retrofit
SUPPORT
& SERVICES
END-USERS
Private consumers
Small & Medium
industries
Large industries
Plant operators
Institutions
Coal plant
Gas plant
Nuclear plant
PLATFORM
(power plant type)
Segmentation criteria should

allow to:
> highlight different customer
needs/ behavior
> differentiate required capabilities
> differentiate cost structures
> identify clear entry barriers and
competitive environment
while not over detailing

market:
> not loose time on multiple
irrelevant small segments
> get a manageable number of
options
21
Tools
Attractiveness / accessibility analysis
22
The attractiveness and accessibility matrix is a standard tool it

must be specific to the company
Attractiveness
for the company
1,2
Attractiveness
=
Revenue
x
Growth
x
Profitability
Accessibility
=
Rivalry Intensity
x
Entry barriers
for a new
entrant
x
Company
capabilities
Most promising
services market segments
0,8
0,6
0,4
0,2
LOW
MEDIUM
HIGH
Accessibility
for the company
NB: Bubble surface proportionate to service revenues projected size

23
Tools
Make or buy
24
For each targeted segment, "Make or Buy" decisions have to be

made and partnerships may have to be developed
Strategic
analysis
MAKE
YES
1
Does the competency bring a

competitive advantage?
Is it core?
NO
YES
2
Operational
analysis
Could the supplier develop a strong bargaining power,

become a competitor and be operationally unstable?
Is it risky to
outsource?
NO
YES
3
Is it easy to
implement?
What are the difficulties which could slow or

threaten the implementation?
NO
YES
4
Is it cost effective
internally?
What is the current cost performance

compared to market price?
NO
BUY
PARTNER
25
The Make or Buy policy is iterative as it evolves with the business

environment and the partnership / acquisition opportunities
An iterative process
Business
Model
Target
services
segments
"Make
or Buy"
strategy
> The perfect acquisition or partnership

might fail because of unsustainable
business model (e.g. too expensive, no
agreement on ownership)
Iterative
Partnerships/
Acquisitions
> The existence of targets for acquisition /

partnership might influence the Make or
Buy strategy
> The "Make or Buy" strategy or acquisition /

partnership opportunities should not
impact the choice of strategic segments
> This iterative process as well as cycles are
the key reasons why all-in-all it takes 2 to
3 years to implement a new services
strategy
26
Tools
Objectives of a partnership / acquisition
Refer to build-up lecture
27
Partnering or acquiring a company aims at three non-exclusive

objectives: size, synergies, and learning curve
Rationale of partnership or acquisition
1. Size driven model
2. Search for synergies
3. Learning experience
> Take advantage of a critical

size
better bargaining power
gain access to new markets
financial power
> Combine unique contributions

specific resources
specific competences
> Acquire know-how through

practice
> Hold a key position

when it comes to setting up
a technological standard
> Share investments

> Meet client expectations
integrated solutions
> Face a lack of competences

(local access)
> Create new competences
> Meet market challenges

focus on core business
28
Partnerships hide many pitfalls and should not be seen as easy and
short term ways to access technologies, products, or markets
Main pitfalls to consider in a partnership
Pitfall # 1
Pitfall # 2
Overestimating the importance of formal governance structures in alliances when learning is the goal
Pitfall # 3
Limiting the risk-analysis of the partnership to its internal boundaries without taking into account
following spill-over effects:
> Time horizon related: after termination of the partnership, the partner becomes a new competitor in the
market
> Product related: the partner benefits from one parent expertise to diversify its product offering to
become a new competitor
> Geographic: the partner builds on the skills acquired to become a new entrant in a market outside the
partnership boundaries
Pitfall # 4
Not preparing oneself for the termination of the partnership: 50% of JVs end before 5 years and
termination of a JV does not mean a failure:
> Organize to benefit from the JV in the predictable time horizon
> Organize to be independent in the long term and sustain the benefits of the JV
> Anticipate before closing what should be the relative competitive positioning of both partners after
termination
Pitfall # 5
Underestimating the need to manage the post-deal emotion cycle
Not establishing a clear division of management responsibilities

> clear split of responsibilities along the value chain (operations, marketing activities, commercial,)
29
Tools
Emotional curve
30
Success relies in people's involvement thus, the "emotional curve"

has to be actively monitored
"Emotional curve"
Mobilization
Transformation
phase launch
Definition of
the working
principles
Desired performance curve

Orientation
Mobilization Acceleration
New orientation
top-down
Productivity/
develop
cooperation
Implementation
Definition of
action plans
?
Time
Weaknesses
identification
Continuous
improvement
on all levels
Time
Considerable control of communication required
SUCCESS FACTORS
> Achieve management alignment and commitment
> Identify "Champions" and leverage "Multipliers"
> Mobilize employees around repeated "quick hits"
> Use a transparent and attractive incentive system

> Use effective training organization
> Structure capabilities, set-up learning organizations
31
The shift from a product-oriented towards a service-oriented

organization is the key challenge in Services Growth Strategy
Sample of organization and processes questions
Delivery
Portfolio / strategy
> Capacity sharing for

production of spare parts
> Potential wide service portfolio,

product and non-product related
> Alignment between Product and
Services strategies / governance
Back office
> Sharing basic functions without
burdening Services with highcost (e.g. quality standards)
Organization
& Processes
Sales
> Key account management and
adequate to TBOs for services
> New customers
> Management of cross-fertilization:
potential bundled offers
Suppliers' management
Product support
> Objectives and negotiation

processes: potential conflict
between Product and Services
> Preserving support engineering (due

to the client) but avoiding duplicates
Such fundamental
changes requires:
> Perseverance
> Top management
attention and
involvements
> Clear communication
of objectives
> Dedicated resources
and capabilities
As always, the end-success of a Services Growth Strategy relies

on the quality and level of conviction of people involved and management
32
For next week EADS Airbus case presentation
3 hours
"Premium clothing" teams'
results
"Premium
clothing"
Roland Berger
results
Break
Service growth
theoretical course
"EADS
Airbus" case
presentation
60 min
30 min
30 min
50 min
10 min
Focus of current presentation

33
EADS group is formed by 4 major divisions- Airbus represents

approx. 65% of total business
Airbus within EADS Group (results in 2009)
Sales: 42,822 (2009, EUR m)
EBIT: -322 (2009, EUR m)
Airbus ~65%
Eurocopter ~10%
Astrium ~11%
DS ~12%
Other ~2%
Results [2009, EUR m]

> Sales: 28,067
> EBIT: -1,371
> Order intake: 23,904
> Order book: 339,722

> Sales: 4,570
> EBIT: 263

> Sales: 4,799
> EBIT: 261

> Sales: 5,363
> EBIT: 449

> Sales: ~855
> EBIT: ~76
> Order intake: n.a.
> Order book: n.a.
Products
> Commercial (93%): A320
family, A330/340, A350
XWB, A380
> Military (7%): CN-235,
C295, A330 MRTT, A400M
Products
> EC225/EC725
> NH90
> EC135/EC145
> Ecureuil family
> Tiger
Products
> Eurostar 3000
> Ariane S
> Paradigm
Products
> Missile systems
> UAVs
> Eurofighter
> Security solutions
Products
> ATR
> EADS North America (UH72A helicopter)
Source: EADS company information, Roland Berger Strategy Consultants
34
EADS Vision 2020 includes ambitious targets in Services by 2020,

which will impact Airbus
EADS 2020 Vision
Subsequent impact on Airbus
Ambitious
Shares of revenues 2009
> 20-25% of EADS 2020 revenues in Services

> Comprehensive portfolio
> Services = businesses in their own right
Realistic
> Group will remain mainly focused in Aerospace,

Defence & Security
> Target customers will remain governments and large
institutions (public and private)
High-value
-Added
> Large scale, high complexity, mission-critical

services
> Strong technological / "intelligence" content as
opposed to pure manpower-based services
Committing
> Top management decisions to be made along the way

Trade-offs
Resource allocation
Acquisition to support strategy
> Acceptance of pain factor in such commitment
Source: EADS 2020 Services Vision Project
43 Bn
Other
divisions
28 Bn
35%
98%
Airbus
65%
2%
EADS
Services
Airbus
35
Your client has identified 13 services categories and especially 3 on

which he would like a clear Services strategy if relevant
1. MRO (Maintenance, Repair
and Overhaul)
2. Training
(focus on commercial)
3. Airport operations
4. Logistics
> Spare parts management

> Light & Heavy maintenance
> On-site technical support
> In-house maintenance
> Testing & controlling
> Configuration management
> Field services
> On-site or remote training of

operationals
> Simulation scenarios and equipment
> Training courses and documentation
> Training facilities (training centers)
> Qualification processes
> Ground support ops (e.g. luggage,

cleaning, catering, ...)
> Ground / Airport services
> Inventory management

> Hangar Management
> Supply Chain management
> Transport & Deployment
management
5. Engineering, consulting
& RDT
6. Facility management
7. In-flight connectivity
8. Technical assistance
> Modification engineering

> Safety & reliability surveys
> Environment
> Quality insurance
> Compliance audits
> Incident / Accident expertise
> Certification
> Civil engineering

> Site management (military or space
site, governmental maintenance
centers, ...)
> Entertainment system management

(content and billing)
> In-flight call service
> Help Desk

> Documentation
> On-site tech-assistance
> Testing
9. Large System
Integration management
10. Asset & Fleet

11. Outsourced support
management (& Maintenance) functions
12. Financing
13. Air Traffic

Management
> Prime contracting

> Project management
> Fleet management

> IT management
> Telcos management
> Leasing
> Billing "by the hour"
> PFI
> Air traffic operations
> Human resources

> Finance / Treasury
> Medical
36
Segment selected should be precise and constitute a coherent

segment
Strategic segmentation Framework for thoughts
VALUE-ADDED
Capacity /
Capability based
E.g. Maintenance paid
Results /
by the flight hour
performance based
E.g. one-shot upgrade Means /
of a system
Discrete services
E.g. Legacy airlines
Trad. clients /
Trad. needs
Trad. clients /
New needs
E.g. airports
New clients /
New needs
New clients /
Trad. needs
"From delivery of means to engagement on

capacity delivery often with own or mastered
means"
E.g. Initial provisioning

of spare parts
Product support
(i.e. more or less embedded in
aircraft sale)
E.g. Aircraft
maintenance
Product related
services
"From product focused services to servicing of

adjacent customer needs"
Side / extended
PROXIMITY TO
services
AIRCRAFT SALE
E.g. Providing content for
In-Flight Entertainment (i.e.
fims, radio)
"From well know clients in well established regions to serve traditional needs to new
concepts saved potentially in new regions to new clients"
CLIENTS / REGIONS
37
Airbus' CEO has asked you to select civil Services' segments in

which the company should develop and to define a roadmap to target
1. In which Services' segments should Airbus develop itself? assess at least the 3 short-listed
segments
> attractiveness of the segment
> competitive advantage of Airbus
> potential competitors
>
2. On one priority segment to be selected, what strategic roadmap should Airbus adopt?
> organic vs. partnership vs. external growth
> if applicable what partners / targets
> rationale
3. How does it contribute to the EADS 2020 Vision? (macro business case)
Any innovative strategy on the other segments would be appreciated if relevant
38

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Growth Strategies

Paris, March 11th 2016

This part of the course will focus on service growth strategies

Focus of current presentation

6 tools/ concepts will be developed within the course and could be

Understanding the Services Development matrix is key to adopt

Performing a systematic segmentation of all potential offering is a

The attractiveness and accessibility matrix is a standard tool it

Energy industry example turbine market

Difficulty to develop offering

e.g. packaged MRO1)

On all products (i.e. beyond own)

Difficulty to penetrate market segment

Development of efficient support on own products

Source: Roland Berger

Source: Roland Berger

while not over detailing

NB: Bubble surface proportionate to service revenues projected size

1. Size driven model

2. Search for synergies

> Take advantage of a critical

> Combine unique contributions

> Acquire know-how through

> Hold a key position

Considerable control of communication required

2015.02.23 - 2. Growth Strategies in Services - Theory.pptx

Source: Roland Berger

For each targeted segment, "Make or Buy" decisions have to be

Rationale of partnership or acquisition

Segmentation criteria should

Partnering or acquiring a company aims at three non-exclusive

Desired performance curve

Source: Roland Berger

Success relies in people's involvement thus, the "emotional curve"

A step by step strategic path to keep in mind

> Share investments

Does the competency bring a

> Face a lack of competences

> Create new competences

Could the supplier develop a strong bargaining power,

What are the difficulties which could slow or

> Meet market challenges

What is the current cost performance

> Use a transparent and attractive incentive system

Source: Roland Berger

2015.02.23 - 2. Growth Strategies in Services - Theory.pptx

Source: Roland Berger

2015.02.23 - 2. Growth Strategies in Services - Theory.pptx

2016.03.11 - 2. Growth Strategies in Services - Course.pptx

This course focuses on Services as a diversification opportunity for industrial

1. What does "Services" mean in the industry

2016.03.11 - 2. Growth Strategies in Services - Course.pptx

Source: Roland Berger

Services have to be differentiated from two other business models:

> Activities offered to the customer and embedded in

> Sale of consumables used during the life-cycle of

> Distinction between Support and Services can be

> Most well-known example : HP that shifted its business

> Quality of Support is a key differentiator when selling

Source: Roland Berger

> Consumables are different from components:

Attractiveness of Services for industrial companies lies in its