HomeResearch & Knowledgeback to HomeArtificial Intelligenceback to Research & KnowledgeIndustry 4.0: The hard reality in business to businessback to Artificial Intelligence

Case Study

Industry 4.0: The hard reality in business to business

By Carlos Cordon and Teresa Ferreiro Vilarino

18 pages

May 2016

Order this case study

Reference: IMD-7-1784

Industry 4.0 is impacting companies at many different levels. New technology, robots and communications are taking manufacturing through a full restructuring process. Today, many of the promises that Industry 4.0 – also referred to as the industrial internet – may still sound unrealistic and distant. Executives and business consultants talk about its potential as something that is about to happen. But has it really started? Indeed, Industry 4.0 is no longer the future. Some organizations are already transforming their processes to adapt to the new digital reality that the industrial internet is bringing with it. The process may not always be painless but it offers countless benefits that make it worthwhile. This technical note provides a compilation of leading-edge initiatives that may show us the path forward.

Learning Objective

To understand how Industry 4.0 is transforming organizations. The note identifies four main drivers of what is also called the fourth industrial revolution (Internet of Things, Artificial Intelligence, Robotics and 3D printing) and uses real examples of business-to –business companies to illustrate what is already happening.

Keywords

Digital Revolution, Robotics, 3D Printing, Artificial Intelligence, Business to Business, Industrial Internet, Industry 4.0

Settings

World/global
Business Management Services, Business Services

Type

Published Sources

Available Languages

English

IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]

IMD retains all proprietary interests in its case studies and notes. Without prior written permission, IMD cases and notes may not be reproduced, used, translated, included in books or other publications, distributed in any form or by any means, stored in a database or in other retrieval systems. For additional copyright information related to case studies, please contact Case Services.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Keep reading

Case Study

Lemonade: Is its "AI everywhere" strategy a competitive advantage?

Customer Centricity Artificial Intelligence Disruption Start-up

By Goutam Challagalla and Ivy Buche

Report

AI strategies that are working

IMD’s 2025 AI Maturity Index highlights how leaders of the most successful companies are scaling AI technologies across 10 industries for competitive advantage

Artificial Intelligence Strategy

By Tomoko Yokoi, Michael R. Wade and Jialu Shan

IMD White Paper, November 2025

Article

Stop running! Why you may be implementing AI pilots the wrong way

Unlock GenAI’s full potential by going deep and narrow: focus on strategic opportunities, lasting advantage, and meaningful impact over quick wins.

Artificial Intelligence Innovation Strategy

By Goutam Challagalla

in I by IMD Brain Circuits

6 November 2025

Article

Race for AI dominance is creating competition and new global alliances

OpenAI’s recent $1 trillion spending spree on chips and computing power shows that artificial intelligence now depends as much on energy and infrastructure as on algorithms. The ChatGPT maker has signed pricey long-term deals this year for greater...

Artificial Intelligence

By Amit M. Joshi

in The National

5 November 2025

Article

Stop running so many AI pilots

In late 2023, when the management team at the consumer packaged goods company Reckitt considered adopting gen AI, potential use cases spanned the business—from drafting presentations to delivering customer support to optimizing procurement contrac...

Artificial Intelligence Strategy

By Goutam Challagalla, Mahwesh Khan and Fabrice Beaulieu

in Harvard Business Review

November-December 2025, vol. 103, issue 6, pp. 90-99

Article

フィジカルAI時代、日本に求められるデータ戦略とは?

Physical AI is gaining significant attention as a technology that will greatly influence the proliferation of AI robotics. This AI technology captures diverse information from the real world through various sensors and advanced data analysis to ac...

Artificial Intelligence Leadership

By Kazuo Ichijo and Hideaki Sekine

in Mitsubishi Research Institute Opinion

1 November 2025

Article

The three obstacles slowing responsible AI

In October 2023, New York City released its AI action plan, publicly committing to the responsible and transparent use of artificial intelligence. The plan included guiding principles — accountability, fairness, transparency — and the creation of ...

Artificial Intelligence Strategy

By Öykü Işık and Ankita Goswami

in MIT Sloan Management Review

Winter 2026, vol. 67, issue 2

Article

What does a good AI use case look like?

With AI fever in overdrive, everyone is searching for winning AI use cases. However, the process feels like solving a giant jigsaw puzzle without a picture on the box to guide you.

Artificial Intelligence

By Didier Bonnet and Achim Plueckebaum

in I by IMD Brain Circuits

28 October 2025

Article

Artificial intelligence machines as relational nonhuman actors in entrepreneurial teams

We theoretically examine how artificial intelligence (AI) machines interact with and shape strategic decision-making within entrepreneurial teams. First, we explain how AI machines lead and assist teams to engage in cognitively complex decisions a...

Artificial Intelligence Decision Making

By Alfredo De Massis and Samuele Murtinu

in Journal of Small Business Management

October 2025, vol. 63, no. 6, pp. 2890–2916, https://doi.org/10.1080/00472778.2025.2461031

Article

Commentary: China ban on Nvidia chips is not just about a trade spat

China has put its near-term progress in the global AI race with the United States on the line. By banning its largest tech companies from buying Nvidia’s chips, Beijing is forcing ByteDance, Alibaba and others to rely on Huawei and other domestic ...

Artificial Intelligence

By Howard H. Yu

in Channel NewsAsia

21 October 2025

Lemonade: Is its "AI everywhere" strategy a competitive advantage?

By Goutam Challagalla and Ivy Buche
Case reference: IMD-2691 ©2025

Summary

The case examines how a New York-based 10-year-old start-up, Lemonade Inc., successfully disrupted the insurance industry. Powered by artificial intelligence, Lemonade's mobile app replaced brokers and bureaucracy with bots and machine learning. The combination of simple product, no jargon, zero paperwork and an all-digital engagement allowed Lemonade to collapse costs, not at the expense of customer experience but to delight young customers with "instant everything" – from buying insurance in 90 seconds to getting claims paid in 3 seconds. Lemonade's notable milestones include surpassing $1 billion in in-force premiums in March 2025, a net loss ratio improvement from 97% in 2022 to 75% in 2025, and its first full year of positive adjusted free cash flow in 2024. Despite strong top-line growth, the company was yet to turn a profit, and its stock performance had been rocky. Lemonade posted a $202.2 million net loss in 2024, and its market capitalization stood at $4.2 billion in August 2025, significantly below its $9.8 billion peak in January 2021. Looking ahead, Lemonade aimed to increase in-force premiums tenfold, to $10 billion, by aggressively acquiring customers without significantly raising costs. As the stock regained market attention, bullish analysts highlighted ongoing progress toward profitability and improving loss ratios, whereas bearish analysts questioned the fundamentals behind the highly positive narrative presented by CEO Daniel Schreiber. A key question was whether the company could sustain its data- and AI-enabled competitive advantage or whether incumbents with deep pockets and growing technological investments would catch up. Against a backdrop of geopolitical tensions, uncertain macroeconomic conditions and increased competition, should institutional investors continue to invest in Lemonade or not?

Reference IMD-2691

Organization Lemonade

Industry Finance and Insurance, Insurance

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Customer Centricity

Artificial Intelligence

Disruption

Start-up

Browse all topics

AI strategies that are working

By Tomoko Yokoi Michael R. Wade and Jialu Shan
IMD White Paper, November 2025

Summary

IMD’s 2025 AI Maturity Index highlights how leaders of the most successful companies are scaling AI technologies across 10 industries for competitive advantage

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Artificial Intelligence

Strategy

Browse all topics

Stop running! Why you may be implementing AI pilots the wrong way

By Goutam Challagalla
in I by IMD Brain Circuits 6 November 2025

Summary

Unlock GenAI’s full potential by going deep and narrow: focus on strategic opportunities, lasting advantage, and meaningful impact over quick wins.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Artificial Intelligence

Innovation

Strategy

Browse all topics

フィジカルAI時代、日本に求められるデータ戦略とは?

By Kazuo Ichijo and Hideaki Sekine
in Mitsubishi Research Institute Opinion 1 November 2025

Summary

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Artificial Intelligence

Leadership

Browse all topics

The three obstacles slowing responsible AI

By Öykü Işık and Ankita Goswami
in MIT Sloan Management Review Winter 2026, vol. 67, issue 2

Summary

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Artificial Intelligence

Strategy

Browse all topics

Artificial intelligence machines as relational nonhuman actors in entrepreneurial teams

By Alfredo De Massis and Samuele Murtinu
in Journal of Small Business Management October 2025, vol. 63, no. 6, pp. 2890–2916, https://doi.org/10.1080/00472778.2025.2461031

Summary

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Artificial Intelligence

Decision Making

Browse all topics