Page 230 - The Design Thinking Playbook

EXPERT TIP

Servitization and other business models

Often, the business model becomes the differentiating factor per se.
New business models may aim at securing income in the long term,
heightening customer loyalty, or reducing production costs. One trend
that has prevailed is servitization. The term means that customer
needs are fulfilled without the customer having to own the physical
product.
One of the best-known examples is Rolls-Royce’s power-by-the-hour
model in the area of aircraft engines. The pay-per-use model in the
software industry as well as business models in the textile industry
are also popular. Socks or baby clothing can now be ordered with
a monthly subscription. Vigga has developed a model that enables
mothers to lease organic baby clothing.

To stay with the textile industry: For another business model, the
issue of recycling is the decisive differentiating element. The basic
idea is to generate value from a waste product. Flippa K takes back
the worn clothing of their customers, for instance, and sells it in their Circular value creation Servitization Frugality
own secondhand shops. Create value from waste – Create value for customers Promote the effective
The efficient use of resources can be an important part of the close the cycle without having them to own use of resources
business model. Companies like YR are typical of this idea. It makes the product (physical good)
it possible for customers to create their own personal T-shirts, Recycling and resource All-inclusive carefree pack- Solutions that actively lower
which are then produced on demand. This way, there won’t be any efficiency are in the focus ages, pay-per-use models, consumption and production
overproduction of designs, which are later hard to sell on the market. etc.
Consumers also have a greater emotional bond to the product and the Flippa K operates second- Rolls-Royce: power by the YR: On-demand production
brand. hand shops hour of T-shirts and shoes
Closed loop Renting & leasing Co-creation

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