ESMT Berlin study examines cost traps in business models 4.0
The results show that cost overruns that pose difficulties in terms of target definition, marketing, and implementing business models 4.0 can be traced back to the following nine factors:
1) Overambitious profit targets
2) Overestimation one’s own capabilities
3) Ignoring unpredicted developments
4) Outdated sales force
5) Risky pricing models
6) Misguided MarCom
7) Failed customer integration
8) Urge for perfection
9) Inflexible corporate structures
Plötner comments, “Modern data-based technologies allow German mechanical and plant engineering to develop innovative business models, often in form of complex services. Such innovations require changes and timely costs which are not immediately manageable.”
To counter cost traps, Plötner suggests that companies should develop a deep understanding of their customers, business units, and risk management strategies as well as recruit IT specialists.
Link to study: https://www.esmt.org/cost-traps-business-models-40.
About ESMT Berlin
ESMT Berlin is a leading global business school with its campus in the heart of Berlin. Founded by 25 global companies, ESMT offers master, MBA, and PhD programs, as well as executive education on its campus in Berlin, in locations around the world, online, and in online blended format. Focusing on leadership, innovation, and analytics, its diverse faculty publishes outstanding research in top academic journals. Additionally, the international business school provides an interdisciplinary platform for discourse between politics, business, and academia. ESMT is a non-profit private institution of higher education with the right to grant PhDs and is accredited by AACSB, AMBA, EQUIS, and ZEvA. It is committed to diversity, equity, and inclusion across all its activities and communities.
