The Study Of Business Model Optimization Of A Engineering And Design Service Company

The auto manufacturing industry with a complex industrial chain is a technology-intensive industry.There are a large number of external procurements among enterprises to complete various activities cooperatively,from technology research and development through vehicle development and vehicle manufacturing,to vehicle sales and after-sales service.Following the changes of the macro environment,there are several new trends in automobile industry in China:a new round of technological innovation competition brought by new technologies in areas of electrification,lightweight and intelligence;the intensified competitions among enterprises because of the declined sales of car and its production;activities in areas of R&D and production transferred from OEM(Original Equipment Manufacturer)to their suppliers following the gradually using platform and modularity strategy;the industrial chain cooperation mode "outsourcing the complete activities of vehicle development and vehicle manufacturing" is further developed with the development of local new energy OEMs in China.the research object of this paper is A engineering and design service company which provides engineering services in areas of vehicle development and vehicle manufacturing.This paper tries to analyze the challenges of the drastic changes in the external business environment to A-type enterprises from the perspective of the business model,and discusses the business model optimization of A company.Using literature analysis,methods of case study and using tool of model analysis,this paper collates the theories and models of business model and business model innovation through extensive literature reading,selects Osterwalder’s business model canvas model as the theoretical model,describes and analyzes the existing business model of A company with nine aspects including values propositions,customer segments,channels,customer relationship,key resources,key activities,key partnerships,cost structure and revenue structures,and finds three main problems in existing business model:the unsustainable profit model on account of the insufficient ability of comprehensive services and innovation;the high concentration and poor stability of customer segments;declined business and its profits because of increased service cost.This paper gathers new trends of the external business environment in the automobile industry,and discusses the conflicts between these environment tenders and the A company’s existing business model.According with of the business model canvas,the discussions of the main contradiction focus on four different perspectives:the module of value proposition,the module of customer and target market,the module of partnership and the module of profit model.The contradictions summarized as follows:firstly,the module of value proposition cannot match the expectations of clients for comprehensive abilities of suppliers,cannot guarantee the long-term competitive advantages of technologies,and cannot meet the customer’s concerns in cost-saving.Secondly,the module of customer and target market are subject to strong competitions of local enterprises,declined customers and business,instable channels to new customers in industrial chain with the capital in-flow,mismatch between channels and customer segments,low customer viscosity.Thirdly,the module of partnership lacks the ability to integrate external resources to call for sufficient external resources,and meanwhile,mismatches between key resources,such as human resources,data,key activities,and the new industrial trends of services driven by technology and data.Finally,under the situation of industry downturn and intensified competition,the module of profit model lacks channels and profit model with high margin,sustainable and strong anti-risking capacities.Finally,according to the analysis of the problems and contradictions discussed,the paper presents A company’s new business model for innovative design basis on the business model canvas.The main conclusions of this paper for the innovative business model include:first,the new value proposition of A company encourage developing capabilities of vehicle development engineering and manufacturing engineering,and providing the four major participants,OEMs,parts manufactures,technology providers,contracted vehicle manufacturers in the future industrial chain with "overall outsourcing of vehicle development or overall outsourcing of vehicle manufacturing" strategy in the automotive industry,with targeted services and customized solutions focusing on new technology research and development,vehicle system development,parts system development and manufacturing system engineering.Second,the modules of customer and target market focus on the leading enterprises in four major customer segements,namely,local,foreign and joint venture companies from customer groups of OEMs,parts manufactures,technology providers and contracted vehicle manufacturers;develop major channels with sales personnel,engineering personnel,internet network,industry summits and exhibitions;establish a"co-creation" relationship with clients for R&D projects as well as a "dedicated personal assistant" relationship with clients for engineering or consulting projects.Third,the module of partnership should define "providing R&D,engineering design and consulting services","managing the enterprise digital platform" and "managing suppliers and partners" as its key activities,to utilize efficiently human resources,data,brand,patent rights and digital enterprise platform such internal key resources,to integrate and managing external personnel,technology,software and other key external resources,to organize all resources for high-quality customized solutions for clients.Fourth,for the module of profit model,multiple profit channel and multiple profit model should be developed by redefining the value proposition and customer group in the A company’s new business model,at the same time,the structure and efficiency of cost are improved by redesigning the key resources and the methods of resource acquisition.This paper is limited to the preliminary discussion of A company’s business model,and hopes that the analysis and optimizational design of business model of the research object provide some useful references for the practical activities of similar enterprises.