Techno-economic analysis
Costing the strategy before you tool it
For an industrial manufacturer of flushing systems, we costed a strategic product decision before a single tool was cut — benchmarking two competing product strategies technically and economically, and setting them side by side in a SWOT, so the choice was made on evidence rather than instinct.
Anonymised: delivered for a Portuguese manufacturer shown here as “the manufacturer”. Figures are illustrative and carry no client data or identifying product detail.
The challenge
The manufacturer faced a strategic product decision for a new range of flushing systems: how best to cover a spread of market requirements. Two development branches were on the table — a pair of simpler, cheaper products that each serve part of the market, or a single, more complex product flexible enough to answer more requirements on its own. The first keeps each product cheap but doubles production complexity; the second carries a higher unit cost yet covers more of the market with one line. Picking wrong is expensive in tooling and production, so the goal was to make the call early, on evidence rather than instinct.
What we did
- Benchmarked competitor and candidate products on technical and economic terms to compare the two strategies like for like.
- Translated the technical picture into unit cost and required investment, normalising every option for an apples-to-apples comparison.
- Captured the strategic trade-offs the numbers alone miss in a SWOT.
Approach
1 — Technical benchmark
We reverse-engineered competitor and candidate products — counting components, weighing raw material by family, and estimating production cost — then benchmarked real-world performance in a standard application. That turned each option into a comparable bill of materials and a like-for-like performance baseline.
2 — Economic benchmark
We translated the technical picture into unit cost and required investment — raw material, production, mould and assembly-line amortisation — normalising every option so we compared apples to apples. The two strategies, a two-product range and a single flexible product, were costed across each variant.
| Two-product range | Single flexible product | |||
|---|---|---|---|---|
| Market need | Interior | Universal | Interior | Universal |
| Components | 17 | 26 | 32 | 43 |
| Part weight (g) | 203 | 297 | 404 | 460 |
| Unit cost (index) | 100 | 210 | 201 | 317 |
| Tooling (index) | 100 | 159 | 172 | 224 |
3 — SWOT
Finally we set the two solutions in a SWOT to capture the strategic trade-offs the numbers alone miss — chiefly that two products are individually cheaper but multiply production complexity, while the single product costs more per unit yet buys flexibility and broader market coverage.
Outcome
The techno-economic analysis accelerated the strategic decision and the suggested path was implemented. The chosen product then went on to full technical development — ideation, a calibrated hydraulic model, 3D-printed prototyping and a DOE-validated design — covered in the companion case study, Engineering products from first principles.