Principle: The modular offer allows the seller to reach a larger target by offering products that can be adapted to the consumers. The seller proposes a basic product and the buyer can choose the features and customize it to meet his specific needs. The salesperson covers a wider target audience while focusing on one main activity. This type is a continuation of "mass customization". Consumers are more easily seduced by products that appear unique. Paul Romer sums up the benefits of this type of offer as follows: "Economic growth occurs whenever people take resources and reorganize them so that they are more valuable."
Advantages & Challenges: The main advantage for the seller is that he hits a larger target without moving away from his main activity. The product is more adapted to consumers' needs thanks to an "à la carte" system. For the buyer, this business model can respond more precisely to his needs by selecting the modules that interest him. A challenge for the salesperson is to define the needs and desires of the consumers as the product or service must be easy to modulate.
Evolution & Maturity: The business model has its roots in the mass production of a single model, for example, the Ford T-Model in 1908. But customer preferences became more important and companies began to look for ways to develop variants to the basic products. The current period, with digitisation, allows new development of this business model, where a large part of the offer can be modulated according to customer expectations (implementation of customer interface, 3D printing...). This model is ideally suited to the circular economy, as the products are designed to be changeable, detachable, easily repairable which promotes a sustainable and circular policy.
Key figures: The modular offer is based on the standardisation of part of a product or service. This business model has been used for many years in the automotive industry. For example, Volkswagen can build up to 10 different cars from the same basic platform. Another example would be the giant Swedish company, IKEA, which has increased from €9 billion in 2000 to €23 billion in 2010.
Products & Services: Digital products and furniture are very suitable for this business model, as they are products that are easy to modulate, or easy to produce (digital: numerical configuration and furniture: configuration of the production line with robotisation for example). On the other hand, the personal services industry also uses this business model, with the setting up of a modular part of the service.
On IntelligenceMaker, our competitive intelligence platform, get deeper informations about this business model and learn about inspiring players that already deployed it :
Contact us to get the complete analysis : email@example.com