Solution business models based on functional modularity – the case of complex capital goods

The purpose of the paper is to outline a business model for product system solutions that is based on functional modularity.

The paper employs an illustrative case study design. The cases constitute two action research projects in two organisations delivering complex product systems.

The paper illustrates the viability of a movement towards a solution business model based on the use of modular networks and integrated sub-supplies for complex product systems. It develops the idea of suppliers assuming responsibility for larger functional wholes in the delivery of large capital goods.

Future research should strive to further validate and falsify the proposed model, and for other product systems too, with a particular focus on their operational phases.

The paper outlines a business model based on modularity for both main suppliers and sub-suppliers that wish to extend their scope of delivery and to share responsibility with their networks.

The proposed model is in considerable contrast to conventional models in which the main supplier typically assumes most of the responsibility itself.