New perspectives on Strategy: “Intellect Inside: How to do more than simply sell your products?” by Philippe Very, Professor at EDHEC Business School

New perspectives on Strategy: “Intellect Inside: How to do more than simply sell your products?” by Philippe Very, Professor at EDHEC Business School

Philippe Very, Professor of Strategy at EDHEC Business School, and Eric Hanoune in charge of Marketing Virbac’s Services Offer, have combined their expertise once again in a new position paper entitled “Intellect Inside – or how to do more than simply sell your products”.

Over the last few decades, there has been a real shift towards the intangible economy in developed countries to the detriment of the industrial sector. In parallel, consumers are opting for new forms of consumption, preferring to adopt a right of use rather than outright ownership. Given this context, many industrial firms have had to rethink their offer and their business model.
This paper presents various strategies which physical goods producers can adopt in order to exploit their resources and their knowledge capital accumulated over the course of time as profitably as possible. We focus on the extension strategies built around products already manufactured by the firm, illustrating our analysis with some successful business case studies.
The repositioning of an industrial firm’s offer may take different forms, depending on two criteria:
• can the firm’s customer base evolve towards the purchase of a right of use rather than a right of ownership?
• does the company wish to opt for a strategy that focuses on the goods produced or a strategy that creates added value for its intellectual production?
Depending on the answer to these two questions three strategies may be envisaged that go beyond simple product marketing:
1. Sugar-coating strategies that aim to increase the product offer’s value by combining it with peripheral services liable to interest a customer base that remains interested in the right of ownership (Nespresso).
2. Chartering strategies that retain the product as the key source of added value, while giving customers the option to switch from a right of ownership and instead purchase a right of use (Hilti).
3. Soft skill strategies that involve a strong shift from the ‘tangible’ to the ‘intangible’, based on value creation from a pure service activity (IBM) and/or an activity based on the sale of intellectual resources (Air Liquide).
These 3 strategies present very different business models.
 In a sugar-coating strategy, the business model continues to develop around the manufacturing and sale of a product. The chartering strategy is often built around a so-called ‘lock-in’ or rental model. Lastly, the soft skills strategy is based either on promoting the intangible assets linked to the product, or the income from product-related service activities. Finally, while each of these strategies has its own logic, they involve significantly altering the firm’s perimeters and, as such, should be considered as diversifications in their own right, subject to numerous strategic, operational and people-related pitfalls. They nonetheless remain valuable sources of development and value creation.


About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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