Value proposition and business model through TCO and ROI calculation.

About the company

The best innovations are often caused by dissatisfaction with existing solutions or no solutions at all. This is how Alu Rehab and Netti wheelchairs came to life. 

In the late 1980s a group of friends on the Norwegian west coast came to the conviction: “This can be improved!” One of the friends had a family member who was wheelchair bound. He was touched by the challenges that the family and wheelchair users faced daily. They began to develop a completely new chair with sophisticated adjustments focusing on a comfortable sitting position. With mutual help and the inspiration and ideas from the family they developed a chair with innovative solutions. Through support and relief of the body the chair gave the brother a sense of well-being. It was important to have the possibility to change position, due to many hours of sitting every day, to prevent damage such as distortion and pressure ulcers. 

The wheelchair increased the joy of life of the mutual friend so much that they decided to establish Alu Rehab to also offer other wheelchair users the same relief and joy of life. In 1989, Alu Rehab rolled off the assembly line, so to speak. Our motto till today: To adapt the chair to the user – and not vice versa. 

Alu Rehab looks back on 30 years of experience with comfort wheelchairs and offers the market the largest selection of comfort wheelchairs and accessories. The motto is still the same. In collaboration with users, therapists, doctors, engineers, and designers, we want to create a comfort wheelchair with unique solutions. The many adjustment options on the chair and numerous accessories provide the perfect sitting position for every user.

The Alu Rehab Group today consists of 3 companies.

• Alu Rehab AS which is the parent company with offices in Klepp municipality with 17 employees,
• Alu Rehab ApS in Ry, Denmark which is a logistics center with customer service and sales units in several countries in the EU with a total of 35 employees, and
• Alu Rehab Xiamen, China which is the production company with 66

The background

Alu Rehab AS is a manufacturer of high-end quality products, meaning we need to make sure that the buyer of our product understands the value which is in the product. Compared to low margin high volume products this can be e.g. understanding the durability, safety etc.

We sell our products into about 60 countries and have as customers:

-        Tenders

-        Insurances

-        Direct end-user

-        Distributors

We can only be successful as long as the buyer understands the “total cost of ownership” value. A country like Norway, where we have only 1 large customer, being NAV via the tender, has a totally different focus. They buy with the “being good enough” thought in mind.

The good enough thought has many negative side effects for the user of the product/wheelchair.

This focus of the buyers means that there is often too little:

-        Stability

-        Positioning

-        Skin protection

-        Variation

-        ADL and social interaction

This means increased expenses to treat pressure ulcers, pain and discomfort and decreased overall health issues.

Challenge :

Value proposition and business model through TCO and ROI calculation.

 Our products have a long lifecycle at our customers, often being utilized by different users over time. As such there are high requirements to the products with regards to wear and tear, recycling, and refurbishment. In addition, our products have great health benefits to our users affecting medication needs, nursing resources, physiotherapy needs, reduced (or eliminated) pressure ulcer treatments and much more. All of these savings are to a certain degree visible as they are related directly to the user, but the impact of these savings have larger economic impacts affecting the entire economy of the national health services.

As the value of a product is always compared to the lifetime cost, being able to calculate the costs as well as the return on investment is crucial for the overall evaluation of the product – and for a fair comparison to competing products.

Sparring with our Scandinavian Sales Manager, we challenge students to propose recommendation on how we can leverage the value of our products (e.g. long lifecycle, potential saving) in our business model. This challenge will also entail the task to establish a calculating method for TCO and ROI for comfort wheelchairs in Norway.