FAIRLAWN, Ohio—There are a number of megatrends developing in the world, but the top executive of ContiTech's global hose business said companies shouldn't look at these as threats, but rather as opportunities to grow and succeed with new business models.
Delivering the second keynote Oct. 24 on the first day of the Hose Manufacturers Conference in Fairlawn, Andreas Gerstenberger, executive vice president of Germany's Continental A.G.'s Industrial Fluid Solutions business, talked about how Conti had changed during its roughly 150-year history. Having spent most of its time as a tire and rubber product manufacturer, it has changed its focus to a more diversified automotive and industrial goods supplier, focusing on technology and solutions.
He also said the megatrends in automotive and industrial hose businesses will continue to change businesses, and new business models are needed to address these changes.
Gerstenberger pointed at Uber as an example of a firm that came up with a new business model, and now it has market capitalization close to Volkswagen and Daimler A.G., and higher than that of General Motors.
"What does it make or produce?" he asked. "What are its assets? Us, and our desire for mobility."
The business climate can be a volatile environment, Gerstenberger warned. He talked about Kodak, a onetime world leader that didn't change. Other great names of the past he mentioned that either are no longer in business or nowhere near their past glory included Blackberry, Nokia and Blockbuster.
"In a constantly changing world of climate, technology, data, digitalization and even politics, new business models must keep pace with these elements if they are going to succeed—not just today, but into the future as well," he said.
Gerstenberger said a business model should focus on less hierarchy, more agility, flexibility, and diversity in the work force. "In order to grow and stay ahead of the competition, businesses must capitalize on these valuable assets," he said.
The ContiTech official said his own business unit follows the mantra of Smart Solutions Beyond Rubber, "but not instead of rubber."
"There is a definitive path to a successful future, and that path includes a solution-based focus on services, systems and products," Gerstenberger said. "We at Continental believe that the business model that has focused on value creation with mechanical solutions will become less important in the next decade. In its place, we believe that the new business model focuses on mobility services and smart mobility technologies, adding further value with sensor technology, electronics, software and digitalization."
In order to stay ahead of the changes, the Industrial Fluid Solutions business created two new functions: one that provides innovation and digitalization, and the other that focuses on business development. "The implementation of the subsequent strategies is then promoted by all business units and the regions," Gerstenberger said, "thus empowering an efficient way of working that is ready for the future."
He also said sometimes it's better to enter partnerships when appropriate—even with former competitors—to further your company's position.
"It's not possible or feasible to acquire everything you need," Gerstenberger said. "Be flexible and collaborate rather than seeing everybody as your enemy."
The Hose Manufacturers Conference was co-organized by Continental, Beaver Manufacturing Co. Inc. and Rubber & Plastics News.