Company
1,000 - 5,000 employees
Machine Engineering
Business-to-Business
Problem
The client asked us to determine the existing service potential based on its active installed base in order to independently develop a growth strategy for service based on this preliminary work. The aim was to become less dependent on the cyclical product business and to compensate for fluctuations there with more constant, high-margin revenue streams in service.
Approach
Result
The bottom-up potential analysis was carried out in several stages. First, the value of the active installed base was determined. This was calculated from the sales values of the products and set in relation to the service revenue generated. This made it possible to determine the harvest factor, which is standardized and can therefore be compared very well across companies and measures how strong the market penetration in service is.
Significant regional differences were already apparent here and target markets for the service strategy were identified. In a next step, typical shopping baskets were formed for each product type on the basis of the service target portfolio in order to calculate the potential that could be tapped for each asset class and market. This was based on maintenance, repair and parts costs if services are purchased from the provider, as well as surcharges for other service groups such as training and consulting.
On this basis, it was possible to determine which service products have additional sales potential in which markets and to decide on specific measures. Based on this preliminary work, concrete growth ambitions were defined for the various markets, which were then further operationalized by the customer as part of the development of the service strategy.
