When “Asset Light” Is Right

©BCG

Every company seeks to pursue its strategy with the lowest possible level of asset ownership, but determining the optimal level is challenging. BCG analyzed 2,687 of the largest companies that publish financial results across 24 industry sectors. We found that on certain measures, asset-light models deliver consistently stronger financial results.

The Benefits of Going Light

Asset-light models can deliver a better return on assets, lower profit volatility, greater flexibility, and higher scale-driven cost savings than more asset-heavy models.

When Light Isn’t Right

If coordination, speed, know-how, or knowledge sharing is essential—or if core strategic assets are scarce—a vertically integrated model may be a better choice.

Getting the Best of Both Worlds with “Smart Control”

Six specific management techniques improve coordination and knowledge sharing, allowing companies to go asset light and still retain the benefits of vertical integration.

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BCG_When_Asset_Light_Is_Right_Sep_2014.pdf

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