Assessing the potential of business model innovation for investment goods through Life Cycle Costing

J. Van Ostæyen
Centre for Industrial Management, K.U.Leuven, Heverlee, Belgium

J. Duflou
Centre for Industrial Management, K.U.Leuven, Heverlee, Belgium

Ladda ner artikel

Ingår i: Proceedings of the 2nd CIRP IPS2 Conference 2010; 14-15 April; Linköping; Sweden

Linköping Electronic Conference Proceedings 77:68, s. 527-534

Visa mer +

Publicerad: 2012-10-11

ISBN: 978-91-7393-381-0

ISSN: 1650-3686 (tryckt), 1650-3740 (online)


In light of increasing competitive pressure; many manufacturers of investment goods are growing aware of the importance of business model innovation. Alternative business models that put more emphasis on the service content of the value proposition are gaining ground across many sectors. Manufacturers often face the challenge to identify the business model with the greatest earning potential. This paper demonstrates that Life Cycle Costing can be used to identify and quantify the potential for business model innovation. The relevance of this approach is illustrated with the findings of eighteen in-depth interviews with executives of Belgian industrial companies.


Product Service Systems; Business Model; Life Cycle Costing


[1] Economist Intelligence Unit; 2005; Business 2010: Embracing the Challenge of Change. E.I. Unit

[2] IBM; 2008; The Enterprise of the Future; IBM global CEO study 2008. IBM Corporation

[3] Johnson; M.W.; Christensen; C.M. & Kagermann; H.; 2008; Reinventing Your Business Model. Harvard Business Review; 86(12); 50-59.

[4] Ballon; P.; 2007; Business modeling revisited: the configuration of control and value. Info - The journal of policy; regulation and strategy for telecommunications; Volume 9; Number 5; 2007 ; pp. 6-19(14).

[5] Magretta; J.; 2002; Why Business Models Matter. Harvard Business Review; 80(5); 86-92.

[6] Porter; M.E.; 2001; Strategy and the Internet. Harvard Business Review; 79(3); 62-78.

[7] Ballon; P.; 2009; Control and Value in Mobile Communications: A Political Economy of the Reconfiguration of Business Models in the European Mobile Industry. Ph.D. thesis; Vrije Universiteit Brussel.

[8] Bouwman; H. et al.; 2008; Conceptualizing the STOF Model. In Mobile Service Innovation and Business Models. pp. 31-70.

[9] Linder; J. et Cantrell; S.; 2000. So What Is a Business Model Anyway: Accenture Institute for High Performance Business.

[10] Ballon; P. & S. Arbanowski; 2005. Business Models in the Future Wireless World; in: Tafazolli; R. (ed.); Technologies for the Wireless Future: The Wireless World Research Forum Book of Visions 2004. Chichester: John Wiley & Sons Ltd; pp. 90-112.

[11] Amit; R. & Zott; C.; 2001. Value creation in Ebusiness. Strategic Management Journal; 22(6-7); 493-520.

[12] Shafer; S.M.; Smith; H.J. & Linder; J.C.; 2005. The power of business models. Business Horizons; 48(3); 199-207.

[13] Osterwalder; A.; 2005; Clarifying business models: Origins; present; and future of the concept. Communications of the Association for Information Systems 16.1 (2005):1.

[14] Slywotzky; A.J.; 1996; Value migration. ; Harvard Business Review Press; Boston (MA).

[15] Timmers; P.; 1998; Business models for electronic markets. Electron. Commer. Europe 8 April; pp. 1–6

[16] Zott; C. & Amit; R.; 2007; Business Model Design and the Performance of Entrepreneurial Firms. Organization Science; 18(2); 181-199.

[17] Brandenburger; A. and Stuart; H. 1996; Value-based business strategy; Journal of Economics and Management Strategy; 5; pp. 5-24.

[18] Osterwalder A. 2004; The Business Model Ontology: A Proposition in a Design Science Approach. Ph.D. thesis; HEC Lausanne.

[19] Pateli; A. & Giaglis G.; 2003; A Framework for Understanding and Analysing e-Business Models; Proceedings of the 16th Bled Electronic Commerce Conference eTransformation; Bled (Slovenia); 9-11.

[20] Pateli; A. & Giaglis G.; 2004; A research framework for analysing eBusiness Models; European Journal of Information Systems; 13; 302-314.

[21] Tukker A. and Tischner U.; Editors; 2006; New business for old Europe. Product services; sustainability and competitiveness; Greenleaf Publishing Ltd.; Sheffield.

[22] Baines; T. et al.; 2007; State-of-the-art in productservice systems. Proceedings of the Institution of Mechanical Engineers; Part B: Journal of Engineering Manufacture; 221(10); 1543-1552.

[23] Lay; G.; Schroeter; M. & Biege; S.; 2009; Servicebased business concepts: A typology for businessto- business markets. European Management Journal; 27(6); 442-455.

[24] Gordijn; J.; 2001; Designing and evaluating e- Business models. IEEE intelligent systems; 16(4); 11.

[25] Gordijn; J.; 2002; Value-based Requirements Engineering: exploring innovative e-commerce ideas; Ph.D. thesis; Vrije Universiteit Amsterdam.

[26] Asiedu; Y. and Gu; P.; 1998; Product life cycle cost analysis: state of the art review. International Journal of Production Research; 36(4); 883 - 908.

[27] Woodward; D.G.; 1997; Life cycle costing--Theory; information acquisition and application. International Journal of Project Management; 15(6); 335-344.

[28] Lindholm A. and Suomala; P.; 2005; Present and Future of Life Cycle Costing: Reflections from Finnish companies.; Finnish Journal of Business Economics; 2; 282-292

[29] Ellram; L. and Siferd S.; 1993; Purchasing: The Cornerstone of the Total Cost of Ownership Concept; Journal of Business Logistics; (14:1); 163- 185.

[30] Ferrin; B. & Plank; R.; 2002; Total Cost of Ownership Models: An Exploratory Study. The Journal of Supply Chain Management; 38(3); 18-29.

[31] Korpi; E. & Ala-Risku; T.; 2008; Life cycle costing: a review of published case studies. Managerial Auditing Journal; 23(3); 240-261.

[32] Roy; R.; 2003; Cost Engineering: Why; What and How?; Decision Engineering Report Series; Cranfield University.

[33] Emblemsvåg; J.; 2003. Life-cycle costing: Using Activity-Based Costing and Monte Carlo Methods to Manage Future Costs and Risks; John Wiley and Sons; Inc.; Hoboken; New Jersey.

[34] Barringer; H. and Weber; D.; 1996; Life cycle cost tutorial; Fifth International Conference on Process Plant Reliability; Houston; TX; October 2-4.

[35] Niazi; A. et al.; 2006; Product Cost Estimation: Technique Classification and Methodology Review. Journal of Manufacturing Science and Engineering; 128(2); 563-575.

[36] Roy; B.; 1996; Multicriteria Methodology for Decision Aiding; Kluwer Academic Publishers; Dordrecht.

Citeringar i Crossref