Rewriting the Business Models – Adopting the Digital Way
By Viraj Kalyani, Founder & Chairman, Kalyani Studio
At Kalyani Studio, we are building deep and niche expertise to cater to frontier industries-the industries of the future. We are building the science of strength which is a combination of existing sciences such as material science, mechanical engineering, manufacturing engineering and integrating some new disciplines like Design Thinking. When you combine these, we are looking at how we can shape the science of strength, how we can make strength useful to companies to make better performing products with a longer service life. This takes a lot of in-house R&D but once you build this deep expertise you can solve much bigger problems, much more complex problems. This is why we should devote our energies to identifying and developing that core strength in each of us so that we can develop a new niche.
Another way of viewing the industry
On the right you have a value chain from concept to design & stimulation to prototyping. This is the value chain of a new product development and many companies are organized horizontally today and in fact a lot of concept development doesn’t happen collaboratively enough. With deep and niche expertise you can vertically integrate across these three different value chains. You can go from concept to all the way to prototyping but focus on some core disciplines, in our case it is high strength engineering which are under the hood projects.
How does digitization come into play here?
Digitization helps you vertically integrate much faster. You can use AI, big data to make your processes very efficient, much faster timed to the market as speed is the need of the hour. Vertically integrating across industries and across value systems is what deep and niche expertise will bring.
What will the industry look like?
Currently we have stack of players around design, engineering, prototyping and OEMs that make use of these services either in-house or collaborating with engineering service organizations. We also have dealers & distributors along with consumers but what is changing is really at the top towards the consumer. Most of digital technologies are helping form new business models like Uber, where car companies now have to think of the end user. Automobile companies have been designing from the point of view of the driver but once you get to autonomous vehicles, you have to think from the passengers’ point. The distance between OEMs and consumers is shortening and it is because of technologies like Social Media which is enabling instant feedback and because of consumer analytics, data analytics you have to keep iterating your products. This means innovations have to be really fast. So how you achieve that speed? It is by vertically integrating deep and niche expertise. If more and more players identify these niches, there will be a lot more money to be made in this industry and a lot more consumer surplus. This is the end result that we all are aiming to achieve. You use digital technologies like AI, IOTA, big data across these value chains.
Another crucial part of this structure is on the left (PPT). It is what we call the Rocket Ship. Innovation can also happen outside your organisation and that is because of deep expertise that different kind of people, different kind of companies can innovate in certain niche areas. OEMs can act as system integrators of innovation where you can pick and choose the kind of innovation you want from a particular subject matter expertise and apply that to your product for your consumers. This is how the entire industry gets extremely consumer focussed. It gets vertically integrated with digital technologies, more and more domain experts and niche players. Because of this geography matters less. If you become a deep niche expertise player, every country will want you and you will become a global leader.