The missing link in the solutions business: Managing flows through business systems

Abstract

To beat Japanese low-cost industrial suppliers, hardware vendors in the West have entered the solutions business to earn higher margins. But Werner Ketelhöhn urges caution. He recommends that corporations develop distinctive competences, adopting a double-edged product/market strategy for the long run. Corporations coming in to the business of marketing solutions to customer problems encounter new markets and higher risks. There is no panacea. Ketelhöhn advocates a new form of industrial organisation -- the 'hammock organisation', to cope with these problems. To come out on top in marketing solutions in the current decade, corporations must both offer solutions that really add value, and compete in hardware products by selling low-cost, high-quality commodity-type hardware.