Businessmodel of Oshkosh Corporation

Customer Segments

Oshkosh has a segmented market business model, with customer groups that have slightly different needs. The company targets its offerings at government agencies and commercial clients such as equipment rental and manufacturing firms, home improvement firms, and construction contractors.

Value Proposition

Oshkosh offers four primary value propositions: accessibility, convenience, risk reduction, and brand/status.

The company creates accessibility by providing a wide variety of options. It has engaged in 15 major acquisitions since 1996, with purchased firms including Pierce Manufacturing, Kewaunee Fabrications, Jerr-Dan Corporation, London Machinery, McNeilus Companies, CON-E-CO, and JGL Industries. This strategy has enabled it to expand its capabilities and diversify its portfolio.

The company offers convenience by making life simpler for its customers. It maintains a flexible distribution model through which it meets clients at locations most suitable for them, be they job sites or at a municipality’s offices. It also guarantees same-day parts shipment for all products.

The company reduces risk by maintaining high quality standards. It created the Quality Management System so that it could deliver consistent, high quality products and services to customers. As part of the system, it does the following:

• Trains and educates all employees at its facilities on quality principles
• Encourages staff at all levels to understand customer and supplier requirements, measure performance, develop systems and procedures to prevent nonconformance with requirements, and produce continuous improvement in all work processes

• Utilizes quality gates at manufacturing facilities to catch quality issues earlier in the process and to perform a root cause analysis at their source The company has established a strong brand due to its success. It has 13,000 employees and sells its products in over 130 countries. It holds leading market shares in all of its businesses and is the sole supplier of various vehicles to the U.S. Department of Defense. Its prominent brands include:

• Pierce, North America’s top fire truck manufacturer
• McNeilus, North America’s leader in refuse collection bodies, whose brand concrete mixers are used by more concrete producers than any other
• London, the leading Canadian concrete mixer manufacturer Lastly, it has won a number of honors, including recognition as one of the “World’s Most Ethical Companies” by Ethisphere in 2016 and a “Best of What’s New” Award by Popular Science in 2015.

Channels

Oshkosh’s main channels are its direct sales team and its network of dealers and distributors. The company promotes its offering through its website, social media pages, and conferences.

Customer Relationships

Oshkosh’s customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees. That said, there is a personal assistance component in the form of phone and e-mail support 24 hours a day, seven days a week, 365 days a year.

Key Activities

Oshkosh’s business model entails designing, developing, manufacturing, and distributing its vehicles and vehicle bodies for customers.

Key Partners

Oshkosh’s key partners are the suppliers and subcontractors that provide it with the components it needs to manufacture its products. Specific components are chassis components, such as vehicle frames, engines, transmissions, radiators, axles, tires, drive motors, bearings and hydraulic components; and vehicle body options, such as cranes, cargo bodies, and trailers.

Key Resources

Oshkosh’s main resources are its human resources, who include the product engineers and technicians that design, develop, and manufacture its products, the salespeople that promote it, and the customer service staff members that provide support.

It maintains important physical resources in the form of seven product development/testing facilities and 31 manufacturing facilities across eight U.S. states and Australia, Belgium, Canada, China, France, Mexico, and Romania. Lastly, it places a high priority on intellectual property, with over 800 active domestic and foreign patents.

Cost Structure

Oshkosh 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 sales/marketing and administration, both fixed costs.

Revenue Streams

Oshkosh has one revenue stream: revenues it generates from the sale of equipment and parts to its customers. Sales typically occur through the signing of short- and long-term contracts.