Solution business models based on functional modularity – the case of complex capital goods

Abstract

Purpose – The purpose of the paper is to outline a business model for product system solutions that is based on functional modularity. Design/methodology/approach – The paper employs an illustrative case study design. The cases constitute two action research projects in two organisations delivering complex product systems. Findings – The paper illustrates the viability of a movement towards a solution business model based on the use of modular networks and integrated sub-supplies for complex product systems. It develops the idea of suppliers assuming responsibility for larger functional wholes in the delivery of large capital goods. Research limitations/implications – Future research should strive to further validate and falsify the proposed model, and for other product systems too, with a particular focus on their operational phases. Practical implications – The paper outlines a business model based on modularity for both main suppliers and sub-suppliers that wish to extend their scope of delivery and to share responsibility with their networks. Originality/value – The proposed model is in considerable contrast to conventional models in which the main supplier typically assumes most of the responsibility itself.