Pattern description

This pattern refers to obtaining a competitor's product, taking it apart, and using this information to produce a similar or compatible product. Because no huge investment in research or development is necessary, these products can be offered at a lower price than the original product.

Inventive problems

Application examples

Within the automotive industry, Japanese manufacturers such as Toyota and Nissan bought and systematically analysed western cars in order to learn how to build high-quality cars. Each car was disassembled and its components analysed in respect of their functionalities, structures and characteristics. This is how the Japanese car industry began to imitate western industry in the 1970s and 80s. Since learning and improving was in the DNA of the culture, using systematic methods such as Kaizen and quality circles, Toyota and other companies were able to outstrip western industry.

Pelikan is a Swiss-incorporated manufacturer of fountain pens, ballpoint pens, paper, arts materials, printer accessories and office equipment that made use of the Reverse Engineering concept. In the early 1990s, the company began manufacturing ink cartridges in imitation of models for popular printers and selling them at very competitive prices. This was made possible because Pelikan did not have to commit to substantial research and development costs, or cross-subsidise low-cost printers. The cartridges offered a similar quality to the branded products, thus presenting an attractive option to customers, and the competitive pricing strategy boosted sales and increased revenue for Pelikan.

Denner is a Swiss supermarket chain selling a wide range of discounted products throughout its branded stores. In addition to selling many of its own groceries and products, Denner began distributing coffee capsules that were compatible with Nespresso machines. These were offered at lower prices and were accessible to a larger customer base. Using the Reverse Engineering process, Nespresso capsules were analysed, redesigned and filled with various types of coffee. These were then sold in Denner stores at a lower price than the original Nespresso versions. Furthermore, without being bound by an exclusive distribution system, Denner is able to reach a wide customer base through its discount stores, thus increasing sales and revenue.

References

The Business Model Navigator: 55 Models That Will Revolutionise Your Business