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Using Industry 4.0 to Increase Market Share

Industrie 4.0 Benefits

Using Industry 4.0 to Increase Market Share

19 Feb, 2018

Without a doubt, the most important thought leadership objective for EXOR is to banish the idea that the 4th industrial revolution is only relevant for large enterprises. We will explain our reasoning here today and then in future articles discuss in more detail the Industry 4.0 applications to increase market share.

Our reasoning is based on these fundamental facts:

  1. Unlike the previous industrial revolutions, Industry 4.0 is not about replacing vast quantities of assets. It is mastering the enormous managerial challenge posed by disruptive technology.
  2. The capital expenditure required to make the first step into Industry 4.0 is very limited and well within the grasp of small and medium-sized enterprises.
  3. Small and medium-sized enterprises (SME) are frequently more flexible than larger enterprises, and such agility is associated with a competitive advantage in marketplaces undergoing significant change.

Let us look at the effect of the Internet of Things in other sectors.

In recent years we have seen an explosion in start-ups. Often these companies are made up of only a small group of individuals who using the leverage of the IoT can bring to market services and products that only a few years ago would have required a much larger enterprise. An example:

Dollar Shave Club is a start-up founded in 2011 that offers monthly mail order plans to deliver razors for shaving. The company which in 2016 was sold for cash for $1 billion had no product facilities, no R&D, no sales force, no logistics and only a tiny marketing budget. Everything was outsourced yet highly controlled.

Industry 4.0 increases the chances of disruptive products or services emerging from the more innovative SME sector. It permits SME to improve performance and gain market share at the expense of larger incumbents.

Most technology suppliers concentrate upon applications that reduce costs. Although these efficiency gains are important to consider, EXOR believes strongly that increasing market share is by far a more important objective to implement Industry 4.0. Logically speaking you can only reduce costs a limited amount whereas market share is practically unlimited, as well as being far more fun.

In the next few issues, we will elucidate upon precise go to market strategies that are based on gaining vast market share:

- Output as a Service
- Factory floor quality control process loop
- Supplier network quality control process loop

 

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