Innovation strategy for mature technology : a service-driven business model

Abstract

Many companies in the telecommunication equipment industry operate a multi-business portfolio with overlapping technology generations. Mature technologies in the decline phase of the product lifecycle are often treated as an undervalued niche business. As a consequence the majority of the companies are not able to successfully harvest the remaining business potential with existing product-dominated business model. The purpose of the master's thesis is to examine and verify innovation strategies for harvesting the maximum possible profit from a mature technology in the last stage of their lifecycle. General accepted concepts from available research studies are analyzed in respect to transformation of business models and appropriate strategies for the 'decline' lifecycle stage. These generic strategies are adopted with specific interpretations from a real mature technology from the telecommunication equipment industry. It is about the transformation to a service-driven business model. An opportunity assessment is accomplished for the specific strategies with the help of eight structured expert interviews. The service-driven business model depicts a considerably improvement on the profitability of the business. Biggest levers are productivity measures and the modified pricing strategy for maintenance services. In conclusion an agile transformation of the business model according to the performance of the product and associated service business will enable companies to squeeze out maximum profit in a declining lifecycle.