Data-Driven Business Model Strategy Development for Incumbents in B2B Markets

Abstract

Maschinenfabrik Reinhausen is an incumbent manufacturer in the electrical power equipment industry, engaging in business-to-business (B2B) sales with a strong market position and successful products interested in pursuing the development of new, data-driven business models to generate new sources of revenue. This effort requires both development of hardware products that can provide relevant data and a business model to effectively generate, deliver and capture value for the firm.

Based on case studies, interviews and assessment of the status quo at MR, this project posits a framework for data-driven business model development strategy. This project concludes that while extending connectivity to wider range of sensors through an Ethernet interface would be beneficial, there is no "recipe" or outwardly clear optimal business model structure. However, there is evidence that the internal environment in which incumbents develop new business models has a strong relationship with their success, and there are consistent characteristics across successful examples. Focusing on culture, process, governance, and the use of the right metrics leads to more successful outcomes.