These industry case study on IP strategy explaines how Hilti protected its digital business model of fleet management

1. © 2018 WURZER & KOLLEGEN, München
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INDUSTRY CASE
STUDY Hilti
Business model
transformation to adapt
to the digitization in the
construction industry
By Alexander J. Wurzer &
Dr. Stefan Nöken
Dr. Oliver Sö
̈ llner

2. © 2018 WURZER & KOLLEGEN, München
Hilti Fleet Management
HILTI AG
Start small, grow big
 Founded in 1941 in Liechtenstein by Martin and Eugen Hilti
 1948 first patent related to fastening technology
 1957 innovative technological breakthrough: DX 100 as the
first powder-powered tool in the world
 Focus on future-proof technical solutions: Opening of a new
innovation centre
 2017:
• Hilti stands for professional drill hammers
• 1967 Market launch of the first electropneumatic hammer
TE 17
• Develop the TE series to become the most comprehensive
machine series on the market
• Small drill hammers become Hilti's most popular product
range
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Annual turnover
CHF 5.1 billion
Employees
28.000
Subsidiaries in more
than 120 countries

3. © 2018 WURZER & KOLLEGEN, München
Hilti Fleet Management
Power Tool Industry
Tough Competition
 DIY, professional and specialist retail segments are subject to high
competition intensity
 Persistent and fierce price competition
 Full-Range Global Player (Bosch, Maktia, Hitachi)
 Hilti's specialization in the professional segment (Eibenstock, Fein,
Festool)
 Professional segment sensitive to quality and efficiency
 increasing importance of service options in an increasingly globalized
growth segment
 growing demand for tailor-made solutions with the need for great
flexibility and standardization at the same time
Reasons for Hilti's success
• Strong management team
• A captivating vision and a coordinated strategy
• Targeted and intensive investment in customer development and
customer loyalty
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4. © 2018 WURZER & KOLLEGEN, München
Hilti Fleet Management
Vision of the wireless construction site
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Transformation and Trends
 Increasingly powerful lithium-ion batteries: Cordless devices will conquer other market
segments
 increasing importance of service options
 growing demand for tailor-made solutions
 Digitization, including the integration of expertise in mechanical engineering
 Innovation in the industry is slow as traditional product groups are seen as very stable

5. © 2018 WURZER & KOLLEGEN, München
Hilti Fleet Management
No longer drills, but sales holes
Champion 2020 - Hilti's Goals
 Sustainability and differentiation
 Continuous innovation in products, services and software
 Operational excellence, direct and partnership with customers
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Improving service
Problem
Defective drills can result in large losses for
construction operations, as tasks in the
construction industry are carried out in a
predetermined order and consequential
costs arise
Solution
Guaranteed availability of the right tool in
the right place and at the right time; all
power tools are state-of-the-art. Hilti
experts offer maintenance, repair, battery
replacement and anti-theft

6. © 2018 WURZER & KOLLEGEN, München
Hilti Fleet Management
Hilti becomes a provider of complete solutions
• Package from a single source
• Tailored to the individual needs of customers
• Fixed monthly fee
• Includes all equipment, service and repair costs
Benefits for Customer
• Reduction of downtime, equipment
always available
• Costs can be planned
• Outsourcing of administrative processes
Benefits for Hilti
• Additional revenue from additional services
• Better customer needs satisfaction
• Value creation is now an upstream process that starts at the customer's
• Competitive differentiation in a globalized market
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7. © 2018 WURZER & KOLLEGEN, München
Taxonomy
7
Data Model
(descibes data and their respective relations)
Input Output
Combination logic
(Parametrization and Weighting)
Process
(Algorithmic and Heuristic)
Preference Model
Configuration Simulation Optimization
show
trigger
Product
Overall Process
Components
Process Step
measurement
reading
enter
Product
Overall Process
Components
Process Step
Produc
Overall Process
Components
Process Step
Adaptation
Conversion
e.g. reporting
e.g. decision
memo
e.g. command

8. © 2018 WURZER & KOLLEGEN, München
Taxonomy
8
Data Model
(descibes data and their respective relations)
Input Output
Combination logic
(Parametrization and Weighting)
Process
(Algorithmic and Heuristic)
Preference Model
Configuration Simulation Optimization
show
trigger
Product
Overall Process
Components
Process Step
measurement
reading
enter
Product
Overall Process
Components
Process Step
Produc
Overall Process
Components
Process Step
Adaptation
Conversion
e. g. reporting
e. g. decision
memo
e. g. command
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