Rapid Sales Growth Mechanisms and Profitability for Investment Product Manufacturing SMEs Through Pay-Per-X Business Models

Research output: Chapter in Book/Report/Conference proceedingConference contributionScientificpeer-review

Abstract

Manufacturing small and medium enterprises (SMEs) are recognized as a major driving force economically in the European Union (EU). However, manufacturing companies and SMEs have often met with major difficulties in digitalization, and more specifically, in the implementation of novel industrial internet-enabled business models, such as pay-per-X (PPX) type business. The overall aim of this study is to understand how manufacturing companies (especially SMEs) can make use of PPX business models largely in capital product markets, and how this impacts rapid sales growth and profitability for these investment product manufacturers. The studied two investment product manufacturing companies experienced rapid sales growth and there was an impact on the overall profitability for the companies. Sales growth was significant in both companies and PPX business models opened various new opportunities to extend company businesses. We found four main mechanisms that enabled rapid sales growth through PPX business models: strategic, pricing, financing and risk management mechanisms. Both the SME companies also experienced a negative impact on profitability despite rapid sales growth through PPX business models because of issues related to financing the investment product.

Original languageEnglish
Title of host publicationProduct Lifecycle Management Enabling Smart X
Subtitle of host publication17th IFIP WG 5.1 International Conference, PLM 2020, Revised Selected Papers
EditorsFelix Nyffenegger, José Ríos, José Ríos, Louis Rivest, Abdelaziz Bouras
PublisherSpringer
Pages402-415
Number of pages14
ISBN (Electronic)978-3-030-62807-9
ISBN (Print)9783030628062
DOIs
Publication statusPublished - 2020
Publication typeA4 Article in conference proceedings
EventInternational Conference on Product Lifecycle Management - Rapperswil, Switzerland
Duration: 5 Jul 20208 Jul 2020

Publication series

NameIFIP Advances in Information and Communication Technology
Volume594
ISSN (Print)1868-4238
ISSN (Electronic)1868-422X

Conference

ConferenceInternational Conference on Product Lifecycle Management
Country/TerritorySwitzerland
CityRapperswil
Period5/07/208/07/20

Keywords

  • Business models
  • IIoT
  • Industrial Internet of Things
  • Industry 4.0
  • IoT
  • Pay-per-X
  • Profitability
  • Rapid sales growth

Publication forum classification

  • Publication forum level 1

ASJC Scopus subject areas

  • Information Systems
  • Computer Networks and Communications
  • Information Systems and Management

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