Oshkosh Corporation (OSK): Business Model Canvas [10-2024 Updated]

Oshkosh Corporation (OSK) stands out in the vehicle manufacturing industry with a robust business model that supports its position as a leader in tactical and vocational vehicles. This model is built on strong key partnerships with government agencies and a commitment to innovation and sustainability. Explore how Oshkosh creates value through its diverse customer segments, efficient cost structure, and multiple revenue streams, ensuring its continued success and growth in a competitive market.

Oshkosh Corporation (OSK) - Business Model: Key Partnerships

Collaborations with the U.S. military for defense contracts

Oshkosh Corporation has established significant partnerships with the U.S. military, particularly through contracts for tactical vehicles and logistical support. In 2024, the company expects Defense segment sales to reach approximately $2.1 billion, reflecting an increase of $100 million compared to previous estimates. This growth is primarily driven by higher sales volumes of the Family of Medium Tactical Vehicles (FMTV) and enhancements in contract extensions which include price adjustments for inflation.

Partnerships with USPS for delivery vehicle production

Oshkosh has a critical partnership with the United States Postal Service (USPS) for the production of the Next Generation Delivery Vehicle (NGDV). As of April 2024, the company commenced shipping these vehicles and anticipates reaching full production capacity by early 2026. The NGDV program is projected to contribute significantly to Oshkosh's revenue in the coming years, with a total contract value that is expected to enhance sales and profitability through the 2020s.

Strategic alliances with equipment rental companies

Oshkosh has formed strategic alliances with various equipment rental companies to expand its market reach. These partnerships facilitate broader distribution of Oshkosh's Access segment products, which generated net sales of $2.64 billion in the first half of 2024, reflecting a strong demand for aerial work platforms and telehandlers. Collaborations with rental companies bolster the sales pipeline and enhance customer access to Oshkosh's product offerings.

Supplier relationships for material sourcing

Oshkosh maintains robust supplier relationships to ensure the sourcing of high-quality materials essential for its manufacturing processes. The company reported deferred contract costs related to the NGDV contract totaling approximately $809.5 million, which includes expenses for engineering, factory setup, and customer-owned tooling. These strategic supplier partnerships are crucial for managing production costs and ensuring timely delivery of components, especially in a volatile supply chain environment.

Partnership Type	Partner	Expected Contribution (2024)	Notes
Defense Contracts	U.S. Military	$2.1 billion	Includes contract extensions for FMTV
Delivery Vehicles	USPS	Significant revenue growth projected	Full production expected by early 2026
Rental Equipment	Various Rental Companies	Part of Access segment growth	Enhanced customer distribution channels
Material Sourcing	Multiple Suppliers	$809.5 million (deferred costs)	Critical for manufacturing efficiency

Oshkosh Corporation (OSK) - Business Model: Key Activities

Manufacturing tactical and vocational vehicles

The Oshkosh Corporation specializes in manufacturing tactical and vocational vehicles, generating significant revenue from its Defense segment. In the second quarter of 2024, the Defense segment net sales increased primarily due to higher Family of Medium Tactical Vehicles (FMTV) sales volume and the commencement of production of the Next Generation Delivery Vehicle (NGDV) for the United States Postal Service (USPS). The total net sales for the Defense segment reached $598.7 million, marking a 20.2% increase compared to $498.1 million in the second quarter of 2023.

Engineering and product development for new technologies

Oshkosh invests heavily in engineering and product development, particularly for new technologies in the defense and vocational vehicle markets. The company reported $496.3 million in engineering costs as of June 30, 2024, compared to $439.6 million at the end of 2023, reflecting a focus on enhancing product offerings and technological advancements. Additionally, the incorporation of AeroTech into Oshkosh's operations has led to increased spending on new product development, with higher new product development spending totaling $18 million.

Supply chain management to ensure timely production

Efficient supply chain management is critical for Oshkosh to meet production demands. The company has implemented strategies to mitigate supply chain disruptions, which have become increasingly important in the current economic climate. In the first six months of 2024, Oshkosh experienced a significant increase in working capital, primarily due to higher inventory levels necessary to support production. The company expects to generate approximately $675 million of cash flows from operations in 2024, indicating effective management of its supply chain.

Marketing and sales activities across various segments

Oshkosh actively engages in marketing and sales activities across its various segments, including Access, Defense, and Vocational. The consolidated net sales for the second quarter of 2024 reached $2.85 billion, an 18% increase from $2.41 billion in the same quarter of 2023. The Access segment generated $1.4 billion in sales, while the Vocational segment contributed $843.1 million, reflecting a strong demand across these sectors.

Segment	Net Sales (Q2 2024) (in millions)	Net Sales (Q2 2023) (in millions)	Change (%)
Access	$1,406.9	$1,328.3	5.9%
Defense	$598.7	$498.1	20.2%
Vocational	$843.1	$587.5	43.5%
Total	$2,846.9	$2,413.1	18.0%

Oshkosh Corporation (OSK) - Business Model: Key Resources

Advanced manufacturing facilities and equipment

As of June 30, 2024, Oshkosh Corporation reported property, plant, and equipment valued at approximately $1.11 billion. This includes:

Asset Type	Value (in millions)
Land and land improvements	$102.3
Buildings	$500.9
Machinery and equipment	$1,087.2
Software and related costs	$225.4
Construction in progress	$321.9
Total	$2,237.7

Oshkosh utilizes these facilities to manufacture a range of products, including tactical vehicles and access equipment, ensuring high efficiency and quality in production.

Skilled workforce with engineering expertise

Oshkosh Corporation emphasizes the importance of its skilled workforce, which includes a significant number of engineers and technical staff. The company invests heavily in workforce development, with expenditures for new product development increasing by approximately $4 million in Q2 2024 compared to the same period in the prior year. This investment is crucial for maintaining innovation and competitiveness in the market.

Strong brand reputation in defense and vocational markets

Oshkosh holds a strong brand presence particularly in the defense sector, where it has been a key supplier to the U.S. military and allied forces. In 2024, the Defense segment is expected to generate sales of approximately $2.1 billion. The company’s reputation is further supported by its involvement in significant contracts, such as the Next Generation Delivery Vehicle (NGDV) program for the USPS, which is anticipated to contribute substantially to future revenue growth.

Intellectual property from product innovations

Oshkosh Corporation has a robust portfolio of intellectual property, with amortization of purchased intangible assets totaling $27.1 million in the first half of 2024. This includes patents and trademarks that protect their innovative products and processes, enhancing their competitive edge in the market. The company's ongoing commitment to innovation is reflected in their strategic acquisitions, including the recent acquisition of AeroTech, which added approximately $368 million in sales to the Vocational segment in Q2 2024.

Oshkosh Corporation (OSK) - Business Model: Value Propositions

High-quality, durable vehicles tailored for specific sectors

Oshkosh Corporation specializes in manufacturing high-quality vehicles designed for specific industries such as construction, firefighting, and military applications. For example, in the second quarter of 2024, the Vocational segment reported net sales of $843.1 million, a 43.5% increase from $587.5 million in the same quarter of 2023. This growth reflects the demand for custom and durable vehicles that meet the rigorous requirements of various sectors.

Custom solutions for emergency response and defense needs

The company provides tailored solutions for emergency response and defense sectors. The Defense segment's net sales reached $598.7 million in Q2 2024, up from $498.1 million in Q2 2023, marking a 20.2% increase. This includes tactical vehicles and specialized equipment for military operations, showcasing Oshkosh's commitment to meeting the unique demands of these critical sectors.

Commitment to sustainability in manufacturing processes

Oshkosh Corporation is dedicated to sustainable practices in its manufacturing processes. The company has invested in technologies to reduce waste and improve energy efficiency. As of June 30, 2024, the company reported a gross margin of 19.2%, up from 17.6% year-over-year, partly due to lower material costs and improved pricing strategies. This focus on sustainability not only enhances operational efficiency but also aligns with growing customer preferences for environmentally responsible products.

Innovation in product features for enhanced safety and efficiency

Innovation is a key component of Oshkosh's value proposition. The company has introduced advanced safety features and operational efficiencies in its vehicles. For instance, the Next Generation Delivery Vehicle (NGDV) for the USPS has begun production, with expectations to contribute significantly to the company's growth. This vehicle program exemplifies Oshkosh's commitment to innovative design and technology, enhancing both safety and efficiency for end-users.

Segment	Q2 2024 Net Sales (in millions)	Q2 2023 Net Sales (in millions)	Percentage Change
Vocational	$843.1	$587.5	43.5%
Defense	$598.7	$498.1	20.2%
Consolidated	$2,846.9	$2,413.1	18.0%

Oshkosh Corporation (OSK) - Business Model: Customer Relationships

Direct engagement with government and municipal clients

Oshkosh Corporation primarily serves government and municipal clients through direct engagement strategies. The company has a significant focus on long-term relationships with entities such as the U.S. military and various municipal agencies. In 2024, the Defense segment generated approximately $2.1 billion in sales, largely from government contracts, which reflects a 20.2% increase compared to previous periods. The company is also nearing completion of a five-year contract extension for the Family of Heavy Tactical Vehicles (FHTV) program, which is expected to have enhanced pricing structures to address inflation concerns.

Long-term contracts ensuring ongoing support and service

Oshkosh utilizes long-term contracts to ensure ongoing support and service for its customers. The company’s contract with the United States Postal Service (USPS) for the Next Generation Delivery Vehicle (NGDV) is a prime example, with expected production ramping up through 2024 and 2025. The total anticipated revenue from this contract is projected to contribute significantly to the company's growth over the next several years.

Customer feedback mechanisms for product improvement

Oshkosh Corporation actively implements customer feedback mechanisms to enhance product development and service delivery. The company collects feedback through direct communication with clients and customer satisfaction surveys, which inform product improvements and innovations. This customer-centric approach has been crucial in maintaining its reputation and securing repeat business, particularly in the highly competitive defense and vocational markets.

Training and support services for product users

The company provides extensive training and support services for users of its products. Oshkosh has developed comprehensive training programs to ensure that clients are well-equipped to operate their vehicles and equipment effectively. This initiative not only fosters customer satisfaction but also reduces operational risks associated with improper use of complex machinery.

Customer Relationship Aspect	Details	Financial Impact
Direct Engagement	Focus on long-term relationships with government and municipal clients	$2.1 billion in Defense sales (2024)
Long-term Contracts	Significant contracts with USPS and military	Projected sales growth from NGDV
Customer Feedback	Implementation of feedback mechanisms for product improvement	Enhanced customer retention and satisfaction
Training and Support	Comprehensive training programs for product users	Reduction in operational risks and improved user satisfaction

Oshkosh Corporation (OSK) - Business Model: Channels

Direct sales to government and municipal agencies

Oshkosh Corporation generates a significant portion of its revenue through direct sales to government and municipal agencies. For instance, in the second quarter of 2024, the Defense segment reported net sales of $598.7 million, which is a 20.2% increase from $498.1 million in the same quarter of 2023. This growth is primarily attributed to higher sales volume for tactical vehicles and delivery systems such as the Next Generation Delivery Vehicle (NGDV) for the United States Postal Service (USPS).

Dealer networks for vocational vehicle distribution

The company is transitioning its refuse collection vehicle business from factory direct sales to a dealer network. By the end of 2024, Oshkosh expects to have complete dealer coverage across North America. This shift aims to enhance parts and service coverage for customers. The Vocational segment net sales increased by 43.5% in Q2 2024, reaching $843.1 million compared to $587.5 million in Q2 2023.

Online platforms for marketing and customer outreach

Oshkosh utilizes online platforms to enhance marketing efforts and customer outreach. The company has invested in digital marketing strategies to reach a broader audience. As of June 2024, Oshkosh's consolidated net sales reached $5.39 billion, up from $4.68 billion in the previous year, reflecting a strategic focus on online engagement and marketing initiatives.

Trade shows and industry events for brand visibility

Participation in trade shows and industry events is crucial for Oshkosh to maintain brand visibility. The company regularly showcases its products at major industry events, which helps in establishing connections with potential clients and partners. The strong performance in sales, particularly in the Access segment which reported $1.4 billion in net sales for Q2 2024, is partially attributed to successful marketing efforts at these events.

Channel	Sales Q2 2024 (in million $)	Growth Rate (%)
Direct Sales to Government	598.7	20.2
Dealer Networks	843.1	43.5
Online Platforms	N/A	N/A
Trade Shows	N/A	N/A

Oshkosh Corporation (OSK) - Business Model: Customer Segments

Government agencies and military organizations

Oshkosh Corporation serves a range of government entities, including the U.S. military and various defense organizations globally. In 2024, the Defense segment is expected to generate approximately $2.1 billion in sales, reflecting a projected operating margin of 2.25% . Key products include tactical vehicles and delivery vehicles for the United States Postal Service (USPS). The company is nearing completion of a 5-year contract extension for the Family of Heavy Tactical Vehicles (FHTV) program, expected to increase pricing significantly to account for recent inflationary pressures .

Construction and industrial companies

Oshkosh's Access segment, which includes aerial work platforms and telehandlers, targets construction and industrial firms. In the second quarter of 2024, the Access segment reported net sales of $1.4 billion, an increase from $1.3 billion in the same period of 2023 . The total sales for the Access segment for the first half of 2024 reached approximately $2.6 billion, up from $2.5 billion year-over-year . This growth is attributed to improved organic sales volume and pricing adjustments to counteract rising material costs .

Emergency services, including fire departments

Oshkosh provides specialized vehicles for emergency services, including firefighting apparatus. The Vocational segment, which primarily serves this market, achieved net sales of $843.1 million in the second quarter of 2024, a significant increase from $587.5 million in the same quarter of 2023 . The growth in this segment is driven by increased demand for fire apparatus, with expectations for total sales in the Vocational segment to reach around $3.2 billion in 2024 .

Equipment rental businesses

Oshkosh's products are also utilized by equipment rental companies. The Access segment's performance indicates strong demand, with net sales expected to contribute significantly to the overall revenue. The incorporation of the AeroTech acquisition, which added approximately $192 million in sales, has further strengthened this segment . The company anticipates that rental businesses will continue to seek out its robust aerial work platforms and telehandlers, bolstering growth in this customer segment.

Customer Segment	2024 Projected Sales	Key Products
Government agencies and military organizations	$2.1 billion	Tactical vehicles, USPS delivery vehicles
Construction and industrial companies	$2.6 billion	Aerial work platforms, telehandlers
Emergency services, including fire departments	$3.2 billion	Firefighting vehicles
Equipment rental businesses	Strong growth expected	Aerial work platforms, telehandlers

Oshkosh Corporation (OSK) - Business Model: Cost Structure

Manufacturing and production costs for vehicles

Oshkosh Corporation's manufacturing and production costs for vehicles in the first six months of 2024 totaled approximately $2.3 billion, reflecting a 15.7% increase compared to $1.99 billion in the same period of 2023. This increase was largely driven by higher sales volume and improved pricing dynamics across its segments.

Research and development expenditures for new products

Research and development (R&D) expenditures saw a notable rise as Oshkosh invested significantly in new product development. In the first half of 2024, the company allocated approximately $18 million more compared to the previous year, bringing total R&D spending to around $115 million. This increase was primarily attributed to the development of the Next Generation Delivery Vehicle (NGDV) and enhancements in defense vehicle technologies.

Marketing and sales expenses to support growth

Marketing and sales expenses increased to approximately $416.8 million in the first six months of 2024, up from $384.5 million in the same period in 2023, marking an 8.4% rise. This increase was influenced by the integration of the AeroTech acquisition and expanded sales force initiatives.

Administrative costs associated with corporate operations

Administrative costs for corporate operations were reported at approximately $79.6 million in the first half of 2024, which was an increase from $72.5 million in the previous year, reflecting a 9.8% rise. This increase was driven by higher compensation expenses and new product development investments.

Cost Category	2024 (First Six Months)	2023 (First Six Months)	Change (%)
Manufacturing and Production Costs	$2.3 billion	$1.99 billion	15.7%
Research and Development Expenditures	$115 million	$97 million	18.6%
Marketing and Sales Expenses	$416.8 million	$384.5 million	8.4%
Administrative Costs	$79.6 million	$72.5 million	9.8%

Oshkosh Corporation (OSK) - Business Model: Revenue Streams

Sales of tactical and vocational vehicles

The sales of tactical and vocational vehicles represent a significant portion of Oshkosh Corporation's revenue. In the second quarter of 2024, net sales from the vocational segment increased to $843.1 million, up from $587.5 million in the same quarter of 2023, marking a growth of 43.5%. For the first six months of 2024, the vocational segment generated $1.615 billion in sales, compared to $1.150 billion during the first half of 2023, an increase of 40.5% .

Long-term government contracts generating stable income

Oshkosh Corporation benefits significantly from long-term government contracts, particularly in the Defense segment. In the first half of 2024, net sales in the Defense segment were $1.136 billion, compared to $1.011 billion in the same period of 2023, reflecting an increase of 12.3%. Notably, the company anticipates generating approximately $2.1 billion in Defense segment sales for the entire year of 2024 .

Aftermarket parts and service revenue

The aftermarket parts and service revenue is a growing segment of Oshkosh's income. The company has been transitioning its refuse collection vehicle business from factory direct sales to a dealer network, which is expected to enhance parts and service coverage across North America. This transition is anticipated to drive additional revenue streams through increased sales of aftermarket parts and services .

New product lines from acquisitions and innovations

Oshkosh has expanded its revenue streams through acquisitions and the introduction of new product lines. The acquisition of AeroTech contributed $368 million in net sales for the first six months of 2024. This acquisition has bolstered the company's product offerings and market presence, enhancing its ability to innovate and capture new market opportunities .

Revenue Stream	Q2 2024 Sales (in millions)	Q2 2023 Sales (in millions)	Change (%)	First Half 2024 Sales (in millions)	First Half 2023 Sales (in millions)	Change (%)
Vocational Segment	$843.1	$587.5	43.5%	$1,615.5	$1,150.2	40.5%
Defense Segment	$598.7	$498.1	20.2%	$1,135.6	$1,011.2	12.3%
AeroTech Contribution	$368.0	N/A	N/A	$368.0	N/A	N/A