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20110517 the society that doesn’t own (anymore) v04


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20110517 the society that doesn’t own (anymore) v04

  1. 1. The Leasing Society …the end of ownership?Presentation during Greenweek 2011, BrusselsRob BlaauboerPrincipal Innovation Consultant & Innovation Practice ManagerLogica Business Consulting
  2. 2. Times are changing … creating an opportunity• The innovation pace in Consumer Electronics is relentless• Economic Lifecycle is far shorter than the Technical lifecycle• Resources are becoming scarce and more expensive• Recycling and reuse could be improved• Consumers are hesitant to buy new products, e.g. televisions• There is an Sustainability ParadoxThere is an opportunity to create anew business model in consumerelectronics based on a newparadigm : the end of ownership© Logica 2011. All rights reserved
  3. 3. The lease society: a marriage of “eco”s(ecology and economy)• Consumers in the leasing society will no longer own CE devices but rather ‘lease’ them.• The product based business model will be replaced with a services based business model• Design principles of devices will change• The parameters for the business model depend on many factors and the devices themselves• The device or components bideally have a second(3rd..xth) lease on life.© Logica 2011. All rights reserved
  4. 4. An EXAMPLE in Mobile Telephony Pays per From month Mail delivers New phone and old phone is mailed Orders For recycling Year 0 Year 1 Year 2© Logica 2011. All rights reserved
  5. 5. Is leasing a misnomer?For companies, leasing is a way to move capital goods of the balancesheet and move from capital expenditure to operational expenditure.Futhermore it will make cost more predicatable since in many casesthe cost is more or less fixed.There have been (many) tries to introduce leasing for consumers butwith limited succes (as far as we know). Now we focus not only oneconomic goals but also on ecological and innovation goals. Therefore, a new term, verb or brand should be created that signifies this new paradigm.© Logica 2011. All rights reserved
  6. 6. Is this the end of ownership? And is it a bad thing?The question is if we need to own something if we are simply using it.The transistion from product to service is not easy. However wealready see some exiting examples, for instance Spotify.Spotify offers millions of musics tracks for a fee of $9.95 per month. You do notown the music, but for the price of less than CD per month, i can listen to allsongs, as much as i like both mobile and PC based. Of course Spotify is andigital example of a service. They now have 1 million subscribers (a fraction ofthe potential) and the number is growing.Piracy and digitization of music has been a struggle for the industrybut the trend continues (and can’t be stopped) with players likeSpotify and iTunes.A new generation of consumers is growing up with digital musicrather than CD’s (not to mention LPs or cassettes) This might be a generation that is open to “lease” CE devices as well as the music rather than own them.© Logica 2011. All rights reserved
  7. 7. Look for wins for all stakeholdersConsumer Business EnvironmentMonthly fee Services Business Model Better reuse/recyclingLatest technology, no More and continious contact Better use oftechnology junkyard with the clients resourcesIn order for this idea to become a reality we need tolook for the wins for all stakeholders. Pushing it solelyfrom the perspective of sustainability might label it asan idea from those “crazy green” people.Change evokes resistance, and the CE industry ispowerful. If we are able to let all stakeholders gain, itimproves the chances of becoming successful.© Logica 2011. All rights reserved
  8. 8. Changes to the business model, design principlesand our own way of thinkingThe transistion from a product based business model to a services oneis significant. It changes income streams but also offers newopportunities and new customer contact. New partnerships will likelybe needed to complement current capabilities (e.g. logistics,refurbishment/ recycling , financing).The design principles need to take into account the reuse / repurpose/ recycling concept. The current business model focuses on selling newdevices, not reusing or recycling. Software upgrades or updates arepreferable, snap-in / out components enable consumers to upgradeand materials should be able to be separated in a simple way.Consumers need to get used to the idea that ownership is not sacredand that ‘leasing’ can offer benefits for them and the environment. Italso changes our finances, the upfront investment is replaced withmonthly fees (impact on savings and checking accounts).© Logica 2011. All rights reserved
  9. 9. Talk is good, action is better!Change happens in small steps and pilots. We need to keep in mindthat the end of ownership is a paradigm shift for all stakeholders.But we need to take these steps, learn while we are taking them if wewant to see in what form or shape the idea is viable.The best way forward is a pilot to see if the leasing society could workand in what form. And of course continue to promote the idea of theleasing society and its benefits. Ceterum censeo Carthaginem delendam esse Marcus Porcius Cato Censorius maior© Logica 2011. All rights reserved
  10. 10. Thank you for your attentionPlease contact me if you have any questions or suggestionsContact details:LogicaRob Blaauboer rob.blaauboer@logica.comProf. W.H. Keesomlaan 14, 1183 DJ Amstelveen | NederlandT: +31 20 5033000 | M: +31 6 13832610© Logica 2011. All rights reserved Footer appears here