The Impact of E-Commerce Adoption on the Turnkey-Ready Truck Manufacturing Industry

Abstract

The turnkey-ready truck manufacturing industry is experiencing significant disruptions due to e-commerce adoption, revolutionizing traditional revenue models and prompting companies to explore new revenue streams such as mobility solutions and smart digital services. This transformation introduces the challenge of the "e-commerce paradox," which complicates profitability by making it difficult to achieve high profit margins solely from service offerings. To address this and understand how companies can maintain profitability in the evolving landscape, this study explores the impact of ecommerce on revenue models through an interview-based approach at Volvo Trucks. The findings, presented through archetypes, illustrate how value can be captured across specific revenue models, showing a shift in user value from hardware and vehicle specifications to factors like convenience, flexibility, and freedom from responsibility. The study reveals that the potential for selling digital services as supplementary revenue is significant across both traditional and innovative models, contingent on effective distribution strategies. It underscores the importance of incorporating a value-based pricing strategy when transitioning to innovative revenue models in the context of ecommerce. A key theoretical contribution is the proposed value-driven product-service framework that integrates e-commerce adoption, user value, and revenue models. Overall, this study provides insights into how e-commerce adoption is reshaping revenue models in the truck manufacturing industry, offering strategic guidance for companies like Volvo Trucks to navigate this evolving landscape and ensure sustained profitability in the digital era.