EXECUTIVE SUMMARY

FESTO SE is a market leader in automation, famous for their hardware products as well as the appropriate software components. As such, it often sells hardware and software product in bundles, operating within a so-called Hybrid Business Model. Team ERDE analysed the Status Quo of FESTO’s current hybrid bundles, as well as provided a four-point-solution matrix to help FESTO optimally create, deliver, and capture value of such hybrid product. 

Goal

The goal of the ERDE project was to identify the Existing and profitable hybrid business models, their functional Requirements, the basis for secure Data exchange and grounds for optimal customer Experience. Additionally, FESTO required strategic recommendations on how to further develop and market their hardware-software bundles.

Methodology

Both primary and secondary research was conducted. Secondary research was the first step to acquiring an understanding about the topic and finding appropriate approaches to tackle it. Primary research was conducted in the form of semi-open interviews between March and June 2023 in order to better understand the best practices and the legal circumstances surrounding the topic. The interviews were conducted with Key Managing Directors, Consultants, Key Account Managers, Procurement Chefs of Automation and Manufacturing companies. The turnovers of the respective companies ranged anywhere between EUR 1M to 10B+ turnover.

Results

The results of the research can be summarized in a four-point matrix with following four fields: Happy Customer, Bundling Opportunities, Market Opportunities, and Adversaries. These four aspects of business models are analysed within external and internal influences, out of which specific strategic recommendations for the hardware-software bundles for FESTO were derived. This approach is however standardised and can be considered relevant for any hybrid product, given the input of current internal influencing factors.

Cooperation Partner

• Festo SE & Co. KG
  Ruiter Straße 82., 73734 Esslingen, Germany

• https://www.festo.com/at/de/

Contact Person

• Jacob Decker - jacob.decker@festo.com

Student Team

• Michael Gustav Baer

• Luis Josef Bucher

• Valerian Kaiser

• Julian Küssler

• Lena Petrovic

Project Manager

• Caroline Fabian, M.Sc.

• Shtefi Mladenovska, M.Sc.