From Products to Solutions

When we think about innovation in emerging economies, one paradigm shift that we are beginning to see is a move from companies showing up and wanting to sell their products, to companies rolling up their sleeves and starting to think about offering integrated solutions. This appears to be a response to both the need and the opportunity presented by emerging economies which have large untapped markets but also fractured and fragmentary infrastructure and incomplete ecologies in every industry vertical. What this means is that companies can and must forward integrate and offer not only a product but also a suite of services and solutions that can enable the product to actually be taken up. We’ve seen this in several diverse sectors. Honeywell for instance is a security systems manufacturer that has been working with third party installers and integrators with whom it has built partnerships in mature markets such as Europe and the United States. Here in India however, it has noted that many of these third party installers do not enjoy the same type of expertise to be able to specify, install and deploy Honeywell products in the best possible way. This challenge is now triggering Honeywell to adopt new and innovative ways to provide such services on it’s own, or else certify installation companies so that they can do a better job, or else even consider strategic investments into partner companies with whom it would then work at an arms length.

Another example is that of Lafarge, the global cements, concrete and aggregates manufacturer which is in the middle of a global restructuring, transforming it from a building materials company to a construction solutions company. In order to be able to make such a change, all levels of the company must now learn about the process of construction, elements of waste, mistakes in inventory management, site location, planning and logistics. These can no longer be their customers’ problem, but rather represent critical opportunities for Lafarge to create new value by taking on some of these responsibilities and doing a better job than the construction company can do itself. it is obvious that this movement from a product company to a solutions company requires a detailed, strategic and insightful mapping of the market ecology within which the construction company operates. It is by observing the deal making and the decision making between several different players in the ecology that new opportunities for solutions can be conceptualized and then inserted. This requires a new kind of ethnography, which we may describe as strategic or business ethnography. This consists of viewing the ecology with an eye towards creating or conceptualizing new kinds of value, and it is an approach that we at CKS are really excited about and interested in.

Closer home, Indian companies are beginning to see things in the same way. For several years now Asian Paints has represented a chemicals company that is in the process of strategically reorienting itself into a home solutions company, taking responsibility not only for the products it disseminates but also how best the products can be applied to maximum effect within a home, office or third space. This transformation requires a strategic orientation towards the market, wherein the company learns the language, thought processes, values and decisioning principles of influencers, specifiers, and customers to an unprecedented degree, to the point where it can truly become a partner in the decor process. The Colour Next campaign, which is now a decade old, and which CKS annually stewards, is an integral, central lynch pin in the company’s overall strategy.

Where ever companies need to move from products to solution, therefore, a combination of observation, creativity, collaboration, and strategy will be required.

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