Delta Robotics

You have been contacted by Delta Robotics, a producer of industrial robots. Industrial robots
are automatically controlled, programmable, multipurpose robots for use in industrial
automation applications. Recently, Delta Robotic’s CEO, Dr D. Vader, attended a robotics
industry conference. Presentations at the conference offered an up-to-date overview of the
situation and recent developments in the industry, as well as some forecasts by the industry
association (see attached presentation; please use the attached material rather than other
materials or knowledge you might have about the robotics industry).

By the time the presentation came to a close, Dr Vader had come to the conviction that Delta
Robotics needs to make a serious Business Development effort, and needs to start with it
right away. He had already been concerned when Delta Robotic’s performance had been
stagnating even before the Covid-19 crisis hit in 2020. Because performance (in terms of
revenue and profits) declined only a little in 2018 and 2019, he did not consider the situation
sufficiently drastic to spark dramatic changes, such as changes to Delta Robotic’s business
model. Rather, since that time, Delta Robotics streamlined sales approaches (e.g. by sending
its key account salespeople to a ‘Master class’ sales seminar by one of the world’s most
famous ‘sales gurus’) and reengineered business processes for increased efficiency. By the
end of the presentation at the conference, Dr Vader was convinced that it was time to take a
close look at Delta Robotics’ business model, identify possible changes to the business model
and evaluate the feasibility of implementing the changes, given that Delta Robotics is a
medium-sized firm with a 25-year history. He immediately got on the phone, giving the order
to set up a project group with the mandate to develop a recommendation for how to change
Delta Robotic’s business model to respond to the current and projected situation in the
robotics industry, as described by the attached document.

Delta Robotics builds industrial robots for manufacturing, mostly for customers in the
automotive industry (as well as motorcycle and bicycle industries). Its largest product
offering is in robots for different assembly tasks mostly relating to metal (fixing metal
components to other components) and welding tasks. Within these two types of robots, it
sells robots for different payload capacities and reaches. Delta Robotics also offers robotics
software, so that it sells packages of its hardware and software (i.e., robots that are
programmed and ‘ready to use’), which offer customized solutions for their customers’
manufacturing processes. Delta Robotics has a reputation for providing products that are able
to solve highly complex challenges, for instance in automotive manufacturing plants that are
characterized by high technical complexity, crowded space on the shopfloor that requires
coordination of many robots that have to operate in the same space without colliding, and
very high precision requirements.

The firm has a huge engineering department, with a hardware group and a software group.
The engineering department is the largest in the firm, and Delta Robotics has very strong
organizational competences in engineering, especially in the product areas where it has been
active since its foundation. It cooperates with the engineering faculties of two universities,
and also has a significant proportion of staff with engineering PhDs, some of which from
these two universities. Historically, Delta Robotics has strong links to researchers in these
two universities that are specialized in manufacturing technology. In recent years, Delta
Robotics has hired a few people – mainly in marketing and sales – with a background in
service industries. These recent hires have started to talk about ideas from service industries,
especially two of them who are still in touch with their Master thesis supervisors in the

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marketing departments at their universities. Because they still make up only a minor
proportion of the employees in the marketing and sales departments, these ideas have not
been taken up very much so far. Delta Robotics has a number of customers in the automotive,
motorcycle and bicycle industries to whom it has been the main supplier of industrial robots
for many years, at least for assembly and welding tasks (there are other tasks, too, that can be
done by robots, though assembly and welding make up a large share of the tasks that are done
by robots in these industries). These customers account for 80% of its revenue. The
remaining revenue is from customers that Delta Robotics has sold to once so far, many of
which are new entrants in the bicycle industry who produce bicycles that are niche products
or cater to some fashion or the other. It has sales staff specialized in these three industries,
who actively contact firms in these industries, are present at trade fairs in these industries
with exhibition stalls displaying Delta Robotics’s latest technologies, and other traditional
ways of marketing and sales. Because sales especially needs to engage in technical discussion
with customers’ engineers to develop solutions to customers’ technical challenges, Delta’s
marketing staff are mostly engineers. Declining sales in terms of numbers of robots produced
are critical to Delta Robotics because it has sophisticated manufacturing facilities and a huge
engineering department with employment contracts – typically for this location – that make it
hard and costly to lay off people.

Dr Vader tells you that he of course understands himself that the document and the numbers
contained in it points to opportunities and threats in the industry. This is not the only, or
primary, thing he is interested in. He is also knowledgeable of industry trends – for instance
new types of offerings – and alternative business models of robotics firms that are different
from Delta Robotic’s current business model. He emphasizes that your mandate is not merely
to identify threats and/or opportunities in the market – this is something that is written in the
document already. Nor is your mandate to tell him about successful examples of other
robotics firms, or their business models. He knows these very well himself, and much better
than an industry outsider possibly can. Your mandate – as an independent, outside consultant
– is the following: Make a suggestion for how Delta Robotics should engage in Business
Development. In doing so, take into account Delta Robotic’s current business model and
current situation, and the implementation of the suggested changes to the business model that
they will require. Dr Vader also insists that it is important you provide solid and well-
explained arguments for your recommendation. You have one week to deliver your report
(max. 5 pages). Dr Vader is very much looking forward to it, given that your input will come
from someone with the fresh eyes of an outsider, an independent consultant who can draw
from theory on business development. Where you do not have specific information, he tells
you to make (reasonable) assumptions.