After-sales business model to create customer value: case profit potential of hydraulic hose-assemblies
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After-sales business is supposed to be a very profitable business. If conducted properly with the right strategies and clear understandings its impact on the company’s profitability tends to be significant. The main focus of this study has been pointed towards providing superior customer value and enhancing sales potential in after-market for hydraulic hose-assemblies. Therefore, in the empirical phase of this study, emphasis has been provided towards developing a deep understanding about hydraulic hose-assemblies and their complexities. Hydraulic hose-assemblies provide huge potential for after-sales revenue. These hose-assemblies also have a relatively short life span as compared to most of the other machine parts. Despite the business potential, OEMs today make hardly any hose-assembly related after-sales revenue. Potential business opportunities in after-sales make it interesting to study different facilitators that are directly influencing the after-sales business potential. Understanding profit potential is one of the vital factors in order to finalize beneficial strategies for after-sales hose-assembly business. It is not necessary that strategies those are successful and profitable in one segment (application based) would also be profitable for the other segments. The study suggests that responsiveness, price and number of hose-assemblies in machines are the direct influencers towards the profitability of the hose-assembly after-sales business. OEMs need to understand the profit potential in a certain segment before strategizing their after-sales services for hydraulic hose-assemblies.