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  • May 2017 (Revised September 2018)
  • Case
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Hilti Fleet Management (A): Turning a Successful Business Model on Its Head

By: Ramon Casadesus-Masanell, Oliver Gassmann and Roman Sauer
  • Format:Print
  • | Language:English
  • | Pages:23
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Abstract

This case explores the introduction of fleet management in the construction industry by the premium power tools manufacturer Hilti in 2000. Following its customers’ needs, Hilti moved from selling power tools to leasing them as a service. The introduction of the new business model contributed significantly to the success of Hilti, since it sustainably differentiated the company from its competitors. For instance, the adoption of fleet management resulted in customer loyalty levels five times higher than under the dominant business model Hilti had formerly employed and over-proportioned profit contribution at Hilti. Hilti’s chief technology officer described the importance of the innovation as follows: “Hilti developed many very innovative and successful products over the years, but they paled in comparison with the fleet management business model, which was the most important innovation in Hilti’s history.” All told, Hilti, which had about 22,000 employees and made about 4.5 billion Swiss Francs (or $4.589 billion USD) in sales in 2015, managed 1.5 million tools under fleet management contracts in 40 countries, resulting in a contract value of more than 1.2 billion Swiss Francs (approximately $1.4 billion USD). The (A) case describes the strategic decision-making process regarding the introduction of fleet management in its early planning stages.

Keywords

Hilti; Business Model Innovation; BMI; Fleet Management; Decision-making; Implementation; Power Tools Industry; Business Model; Restructuring; Transformation; Transition; Customer Value and Value Chain; Customer Focus and Relationships; Construction; Innovation and Invention; Leasing; Strategy; Decision Making; Construction Industry; Switzerland; Liechtenstein; Germany; Austria; Europe; United States; Asia; Brazil; China; Japan; Hong Kong

Citation

Casadesus-Masanell, Ramon, Oliver Gassmann, and Roman Sauer. "Hilti Fleet Management (A): Turning a Successful Business Model on Its Head." Harvard Business School Case 717-427, May 2017. (Revised September 2018.)
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About The Author

Ramon Casadesus-Masanell

Strategy
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Related Work

    • May 2017 (Revised September 2018)
    • Faculty Research

    Hilti Fleet Management (B): Towards a New Business Model

    By: Ramon Casadesus-Masanell, Oliver Gassmann and Roman Sauer
    • May 2017
    • Faculty Research

    Hilti Fleet Management (A) and (B)

    By: Ramon Casadesus-Masanell, Oliver Gassmann and Roman Sauer
    • June 2017 (Revised May 2018)
    • Faculty Research

    Hilti Fleet Management Video Supplements

    By: Ramon Casadesus-Masanell, Oliver Gassmann and Roman Sauer
    • May 2017 (Revised September 2018)
    • Faculty Research

    Hilti Fleet Management (A): Turning a Successful Business Model on Its Head

    By: Ramon Casadesus-Masanell, Oliver Gassmann and Roman Sauer
Related Work
  • Hilti Fleet Management (B): Towards a New Business Model By: Ramon Casadesus-Masanell, Oliver Gassmann and Roman Sauer
  • Hilti Fleet Management (A) and (B) By: Ramon Casadesus-Masanell, Oliver Gassmann and Roman Sauer
  • Hilti Fleet Management Video Supplements By: Ramon Casadesus-Masanell, Oliver Gassmann and Roman Sauer
  • Hilti Fleet Management (A): Turning a Successful Business Model on Its Head By: Ramon Casadesus-Masanell, Oliver Gassmann and Roman Sauer
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