Businessmodel of Joy Global

Customer Segments

Joy Global has a niche market business model, with a specialized customer segment. The company targets its offerings at large regional and global mining companies. None of its customers account for more than 10% of its sales.

Value Proposition

Joy Global offers three primary value propositions: accessibility, performance, and brand/status.

The company creates accessibility by providing a wide variety of options. It has acquired numerous firms since its founding, enabling it to expand its capabilities. In 2011 it purchased LeTourneau Technologies, enabling it to add high-capacity LeTourneau front-end loaders for its mining operations. The same year it bought a large stake in China-based International Mining Machinery Holdings. This enabled it to enhance its access to the country’s  coal-mining machinery market.

The company demonstrates strong performance through tangible results. In a prominent case example, its drill experts recommended that an Alaskan gold mine company use its Montabert HC95 drifter drill. The product produced the following positive outcomes:

• Penetration rates increased by 33%
• Consumable cost decreased by 23%
• Maintenance intervals decreased by 33%
• Noise levels decreased, improving the safety of operating conditions The company has established a strong brand due to its success. It maintains 135 locations in 20 countries across six continents. It bills itself as the world’s largest producer of high productivity underground mining machinery for the extraction of coal, potash, salt, platinum and other bedded

mater. It also touts itself as the world’s largest producer of electric mining shovels. Lastly, it has won many honors, including the following:

• Recognition as one of “America’s Healthiest Companies” by the Wellness Council of America
• Recognition as “Corporate Partner of the Year” by Milwaukee Habitat for Humanity
• Recognition as having “Best Performance – Shovels and Loaders” in Chile’s Ranking of Suppliers of the Mining Industry ### Channels

Joy Global’s main channel is its direct sales team. The company promotes its offering through its website, social media pages, and participation in trade shows and conferences.

Customer Relationships

Joy Global’s customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees. The company’s website features eLearning catalogs and training guides for its operator, electrical, and mechanical training programs. It also features a “Resource Library” that includes brochures, case studies, white papers, and specification sheets.

Despite this orientation, there is a personal assistance component. The company offers the following instructor-led training programs:

• Milwaukee-Based Training – Joy Global provides training at its headquarters in Milwaukee, Wisconsin. Program components include hands-on work with various equipment system components and skills practice in maintaining and troubleshooting specific products in its Training Lab.
• Field-Based Training – Joy Global sends training personnel to customers’ facilities so they can tailor training programs to their systems’ needs. In cases where instructors are not available, the firm utilizes trainers from regional service organizations. ### Key Activities

Joy Global’s business model entails designing, developing, manufacturing, and marketing mining equipment and parts, as well as designing and delivering related services.

Key Partners

Joy Global’s key partners are the suppliers that provide it with the raw materials and processed inputs it needs to manufacture its products. These items include steel, copper, and engine and electronic components.

Key Resources

Joy Global’s main resources are its human resources, who include the engineers that design, develop, and manufacture its products; the salespeople that promote the products; and the training staff members that provide instruction. It maintains important physical resources in the form of its manufacturing facilities in the United States, Canada, Australia, France, the United Kingdom, South Africa, and China.

Cost Structure

Joy Global has a cost-driven structure, aiming to minimize expenses through significant automation. Its biggest cost driver is cost of sales, a variable expense. Other major drivers are in the areas of product development, a variable cost, and sales/marketing and administration, both fixed costs.

Revenue Streams

Joy Global has two revenue streams:

• Service Revenues – Includes revenues generated from repair and maintenance services, diagnostic analysis, fabrication, mining equipment and electric motor rebuilds, equipment erection services, training, and sales of replacement parts; represented 74% of total sales in 2015
• Equipment Revenues – Includes revenues generated from sales of original equipment for the mining industry; represented 26% of total sales in 2015