Developing a Business Model for biogas liquefaction plant business. Case Wärtsilä Oy

Abstract

Increasing understanding to customer needs, creating competitive advantage, constant commercial technology innovation and biogas business environment in Europe. LNG network expands all the time around the world. This will give huge opportunity to liquid biogas business. Local business include small scale gas business and biogas producers are part of that. This research purpose is to generate the workable business model for Wärtsilä’s biogas liquefaction plant business.

This study reviews the different theories in business model field and the relation between different business model components. One part of thesis is interviews which can split two different categories. First category interviews contain biogas producers. Second category interviews contain potential end customer companies in transportation and maritime sector. Interviews was excellent sources for the business model, environmental analysis and competitive analysis.

My research generates two different business model options. First business model option is licensing model. Model basic principle is to sell product licensing only to third partner. Wärtsilä offer only basic technology package, engineering support and possible life cycle service. The licensing organization will be very slender and fixed costs are minimized. Second model is inhouse model which purpose has to provide EPC turn key solutions. In nut shell, Wärtsilä will sell biogas liquefaction plant in the turn key solutions. This means that, Wärtsilä will take all responsibility about the engineering, sourcing, production, commission and warranty. Wärtsilä competitive advantage is ability to offer financial support to the customer. On that way, Wärtsilä’s has many competitive advantages which helps to Wärtsilä to become market leader in biogas liquefaction plant supplier.

My research indicates that both business models are good options and the choice will depend of the company strategy direction. Better possibilities will give inhouse model which can generate more money and value to the company.