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Reinvent by Shifting from Products to
Services
Construction equipment manufacturer Hilti reinvented its value proposition and
business model by shifting from products to services. Its move from selling
branded machine tools to guaranteeing timely access to them required a
substantial overhaul not just of their value proposition but also of their business
model. Let’s learn how Hilti did it.
Many organizations aspire to regain a competitive advantage by transforming
from a product manufacturer into a service provider. This requires a substantial
reinvention.
An Expired Model
Hilti’s old model focused mainly on selling high-quality machine tools directly
to builders. They were known for breaking less often, lasting longer, and overall
being less costly by minimizing time loss. Hilti tools also have a reputation for
being particularly safe and enjoyable to work with.
Unfortunately, this old model was one of decreasing margins and subject to
competition from lower-cost competitors.
