Launching a New Venture for a Machinery Company

BCG’s Center for Digital Machinery and BCG Digital Ventures helped a European machinery manufacturer to grow beyond its core and to launch of a new stand-alone venture capturing new customers and revenues for new and existing business."

Falling demand for traditional analog products  threatened the revenues and margins of a European machinery manufacturer in its core business line serving the pulp and paper industry.

The manufacturer responded to the pressure by partnering with a a team of experts from BCG’s Center of Digital in Machinery and and BCG Digital Ventures. The team supported the company’s senior leadership along the entire digital transformation journey—from idea generation to the commercialization and launch of a brand new venture.

The Approach

The team began by assessing the company’s life cycle for paper manufacturing, identifying all the touch points along the value chain. Next, they conducted a holistic assessment that  captured a comprehensive list of the potential services that the company to add to its existing businesses, Three distrinctive services were prioritized as having the greatest economic process, and prototypes were created for these.

New Venture

From the prototypes, a new venture was developed that allowed the manufacturer to expand capture new customers and a new stream of revenues. The company launched the world's first online marketplace for recovered paper. The marketplace provided paper purchasers greater transparency into prices and greater accesss to suppliers.

More than 10 new digital services ideas were developed during the entire process for future expansion. The team bundled all the digital activities into a new stand-alone digital division of about 1,400 employees. The division is responsible for sensors, automation, and digital transformation and services.