Managing costs by business model: issues emerging from the case of E-Car

Abstract

Purpose

The aim of this paper is to explore the managing of cost drivers using a business model (BM) design. Particularly, the paper explores the link between a BM and cost driver analysis adopting a service-dominant logic (SDL) perspective. The empirical domain addresses the dynamic and complex scenarios of electric cars, where many actors are involved, several marketing and technological aspects are still unclear and where the high cost of batteries delays the wide diffusion of electric vehicles. The paper explores how SDL could support the BM design and how the cost driver analysis and BM design are linked when the SDL perspective is adopted.

Design/methodology/approach

This paper analyses secondary data and findings collected by interviews performed with managers belonging to the automotive sector.

Findings

The results show that the BM design could be a solution to address cost problems and the cost driver analysis may play a role in formulating an economically sustainable BM. Splitting a product into a “package of services” can provide direction for research of an alternative BM design in an attempt to manage the impact of cost drivers and pursue economic sustainability.

Originality/value

This paper explores a topic that has not yet focused on cost management research, i.e. the link between BM and cost driver analysis adopting an SDL perspective.

Citation

Giannetti, R., Risso, L. and Cinquini, L. (2016), "Managing costs by business model: issues emerging from the case of E-Car", Measuring Business Excellence, Vol. 20 No. 4, pp. 28-45. https://doi.org/10.1108/MBE-08-2016-0039