An organisation’s ability to adapt to rapidly evolving circumstances has become a critical differentiator. Many CEOs in Switzerland – including those in the industrial manufacturing sector - don’t believe their business will remain viable for more than ten years without a change in course. So what can be done?
The Swiss edition of PwC’s 28th Annual Global CEO Survey underscores an urgent need for business model reinvention: 40% of Swiss CEOs feel their company will not remain viable for more than ten years if they continue running it on its current path. In some cases, adjusting processes and current practices may suffice. In others, fundamental changes are necessary to adapt to changes in the environment, often marking a shift that redefines a company’s business model.
Increasing relevance of Business Model Reinvention (BMR) for the Swiss industrial sector
The Swiss industrial manufacturing sector has long been celebrated for its quality and innovation power. However, many Swiss industrial companies find themselves at a critical juncture. Several forces are converging to make BMR not just an opportunity but an imperative:
- Digital disruption: Rapid advancements in technology, from IoT to AI, are reshaping manufacturing processes and creating demand for digital products and services.
- Global competition: Swiss manufacturers are increasingly competing with global players who are often fast to adopt innovative business models and approaches. Additionally, new entrants from other sectors are now competing with Swiss industrial companies, further intensifying the competitive landscape.
- Evolving customer expectations: Modern customers demand more personalised, seamless experiences and are drawn to subscription-based or pay-per-use models.
- Regulatory and sustainability pressures: The need to meet stricter environmental regulations and sustainability goals is pushing companies to rethink traditional value chains.
- Evolving geopolitical landscape: Shifts in global trade dynamics, tariffs and political instability are disrupting supply chains and changing the environment Swiss manufacturers are operating in. Companies must adapt their business models to remain resilient in this unpredictable landscape.
The urgency and relevance of these shifts may vary between subsectors or even between companies. However, organisations that embrace BMR position themselves to thrive, while those that hesitate risk being left behind. The examples of Blockbuster and BlackBerry remind us of the costs of clinging too tightly to the status quo.
Six types of BMR
Reinventing a business model isn’t a one-size-fits-all solution. However, six transformative pathways have emerged as the most common approaches currently seen in the market:
Adopt XaaS models (anything-as-a-service)
Shift from selling products to offering solutions as a service. For instance, a company could provide machinery on a subscription basis, bundling maintenance and upgrades to create recurring revenue streams.
Develop digital products
Move beyond physical products to create software-enabled offerings like predictive maintenance tools, digital twins or data analytics platforms.
Leverage connected products
Use IoT to transform traditional equipment into smart, connected devices. This enables manufacturers to collect valuable data, improve customer experiences and deliver tailored solutions.
Build ecosystems and platforms
Create or join platforms that foster collaboration and innovation. Ecosystems can drive customer loyalty, unlock new revenue streams and strengthen competitive positioning.
Innovate distribution channels
Rethink how products reach customers. Whether it’s through direct-to-consumer e-commerce, augmented reality sales tools or digital marketplaces, companies have new ways to connect with buyers
Shift the value chain
Reimagine production and supply chains to enhance efficiency and sustainability. For example, adopting circular economy principles or reshoring production can help companies adapt to changing market demands.
Timing is everything
The challenge, of course, lies in knowing when to act. Reinventing a business model too early or too late can be costly—or even jeopardise a company’s future. However, even if an organisation moves too soon or hesitates, sectors are constantly evolving, and opportunities to reinvent often resurface.
Swiss manufacturers must monitor market trends, technological advancements and customer preferences to identify when BMR is needed. Investing in capabilities like data analytics can help companies navigate uncertainty and make more informed strategic decisions.
To help organisations navigate the complexities of business model reinvention, PwC has developed the BMR Pressure Index. This KPI provides a structured approach to assessing the urgency and intensity of the need for BMR within a given sector. By analysing factors such as technological advancements, competitive dynamics, customer expectations, regulatory changes and geopolitical shifts, the BMR Pressure Index offers actionable insights into where and how companies should prioritise reinvention efforts.
Reinvention: the key to staying ahead
The Swiss industrial manufacturing sector has a rich history of resilience and innovation. But in today’s fast-moving world, past success is no guarantee of future relevance. Business model reinvention isn’t just a response to disruption—it’s an opportunity to lead the next wave of innovation. Companies that dare to reinvent can transform disruption into a competitive advantage.
