How we challenged a product-driven aerospace manufacturer to become an opportunity-led company and created new revenue streams with business model innovation
This case describes one of our projects on business model innovation in aerospace.
Our client is a $7b aerospace company providing components and systems to civil and military aircraft manufacturers.
Pushed by pressure on profit margins due to increasing competition, the company started to look at innovation as a way of achieving profitable growth.
Our team was asked to facilitate their annual strategy meeting with 70 managers from 3 countries and follow up with an innovation project aimed at creating new revenue streams and increasing profitability.
To achieve the project objectives, we created a blended approach between Design Thinking and Business Model Canvas.
By starting with the As-Is Strategy Canvas, we challenged the managers across various divisions and business functions to jointly define the current value proposition. While this might look simple, in reality this process involves a lot of conflicting views about what is it that we offer to our customers.
As a result of this insightful exercise we achieved
– alignment on the current value proposition
– resolved misunderstandings and
– created a wake up call to the need to change, since the offering was almost identical to the competitors’.
The output of the strategy meeting included intriguing insights to be validated and potential areas for growth. Jointly with the project sponsor, we selected a business model initiative and used the
Blue Ocean Strategy process to create the value proposition and Business Model Canvas to integrate it into a new business model.
Although the initial mindset was “we are a manufacturing company”, the process and tools challenged participants’ assumptions and beliefs and got them out of their comfort zone, and soon they started to look for growth beyond their traditional business.
Several business model prototypes were created and presented to the Steering Committee. The top 3 moved into further market validation and business case development.
In the end, the winner was an innovative business model built around a new service offering in the aftermarket: technical maintenance for commercial aircrafts. By tapping into the growing demand served by only a few profitable players, the company was put on a new growth path. Thanks to its existing assets and incredible technical expertise – the service could be quickly scaled up.