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Open Access
Article
Publication date: 21 June 2024

Brenda Nansubuga and Christian Kowalkowski

Subscription offerings are being hailed as the next service growth engine for companies in both business-to-consumer (B2C) and business-to-business (B2B) markets. The study…

Abstract

Purpose

Subscription offerings are being hailed as the next service growth engine for companies in both business-to-consumer (B2C) and business-to-business (B2B) markets. The study analyzes how a manufacturing firm can develop and implement a scalable service-based subscription business model for B2C and B2B customers alongside its existing product-centric model.

Design/methodology/approach

A longitudinal case study is conducted, drawing on 25 in-depth interviews with company executives and dealers in key European markets.

Findings

The study outlines an iterative process model for subscription business model innovation. It reveals key events and decisions taken in developing, implementing, and scaling the new business model and how internal and external tensions involving intermediaries arose and were mitigated during the four stages of the process.

Research limitations/implications

The findings highlight the dynamics of business model innovation processes and underscore the importance of organizational learning, collaborative relationships with channel partners, and strategic talent acquisition during business model innovation.

Practical implications

The findings suggest how product-centric firms can implement new service business models alongside existing product models and what this means for partner and customer journey management.

Originality/value

While servitization research predominantly concerns B2B manufacturers, B2C research focuses on digital subscription contexts. The study bridges this divide by investigating the move to subscriptions in both markets.

Details

Journal of Service Management, vol. 35 no. 6
Type: Research Article
ISSN: 1757-5818

Keywords

Article
Publication date: 16 July 2024

Xiufeng Li, Shaojun Ma and Zhen Zhang

The Internet of Things (IoT) platform empowers the digital transformation of the manufacturing industry by providing information technology services. Simultaneously, it enters the…

Abstract

Purpose

The Internet of Things (IoT) platform empowers the digital transformation of the manufacturing industry by providing information technology services. Simultaneously, it enters the market by offering smart products to consumers. In light of different service fee scenarios, this article explores the optimal decision-making for the platform. It investigates the pricing models and entry decisions of IoT platforms.

Design/methodology/approach

In this study, we have formulated a game-theoretic model to scrutinize the influence of the IoT platform ventured into the smart device market on the pre-existing suppliers operating under subscription-based and usage-based pricing agreements.

Findings

Our outcome shows that introducing an IoT platform’s smart device has a differential effect on manufacturers depending on their contract type. Notably, our research indicates that introducing the platform’s own smart device within the subscription-based model does not negatively impact the profitability of incumbent manufacturers, so long as there is a noticeable discrepancy in the quality of the smart devices. However, our findings within the usage-based model demonstrate that despite the variance in smart device quality differentiation, the platform’s resolution to launch their device and impose their pricing agreements adversely affects established manufacturers. Additionally, we obtain valuable Intel regarding the platform’s entry strategies and contractual inclinations. We demonstrate that the platform is incentivized to present its smart device when reasonable entry costs remain. Furthermore, the platform prefers subscription-based contracts when the subscription fee is relatively high in non-platform entry and entry cases.

Originality/value

These findings hold significant practical implications for firms operating in an IoT-based supply chain.

Details

Industrial Management & Data Systems, vol. 124 no. 8
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 11 April 2023

Chenfeng Yan, Zhilin Yang and Xin Dai

With the popularity of paid apps and increasing concerns about privacy hazards, this paper aims to investigate the impact of mobile services’ fee-charging models on consumers’…

Abstract

Purpose

With the popularity of paid apps and increasing concerns about privacy hazards, this paper aims to investigate the impact of mobile services’ fee-charging models on consumers’ privacy concerns, and generate insights for app developers’ fee-charging strategies.

Design/methodology/approach

Three experimental studies including 550 participants were conducted. All studies were between-subjects designs and based on the context of financial mobile services. The implementations of fee-charging models were manipulated by both visualized and test-based stimuli.

Findings

The results reveal that consumers are less concerned about potential privacy violations when using subscription-based (vs. purchase-based) financial mobile services (study 1). This effect is mediated by consumers’ perceptions that app developers that charge subscription fees (vs. one-off prices) are more likely to be consumer-serving motivated (study 2 and 3).

Originality/value

This paper advances the current understanding of consumer response toward paid apps, by proposing and testing a novel attribution-based mechanism to explain why the implementation of a subscription-based versus purchase-based fee-charging model can result in more favorable consumer reactions. Furthermore, this paper identifies the implementation of contrasting fee-charging models as a market-related factor that affects the extent to which consumers are concerned about potential privacy violations, extending extant literature on consumer privacy concern.

Details

International Journal of Bank Marketing, vol. 41 no. 4
Type: Research Article
ISSN: 0265-2323

Keywords

Open Access
Article
Publication date: 30 August 2023

Christoffer Weland Johannes Lindström, Behzad Maleki Vishkaei and Pietro De Giovanni

This study analyzes how tech firms can implement the modern wave of subscription-based business model (SBBM), including value proposition, value creation, value capture and…

9303

Abstract

Purpose

This study analyzes how tech firms can implement the modern wave of subscription-based business model (SBBM), including value proposition, value creation, value capture and performance. In fact, these elements push tech firms to move from traditional to SBBMs.

Design/methodology/approach

To achieve the objectives of this study, we initially construct a theoretical framework for applying SBBM. Subsequently, we employ qualitative research to examine the current implementation of the subscription-based economy within tech firms.

Findings

A successful SBBM necessitates capturing value through sustainable revenue transactions and revising aspects of the value proposition, creation and capture. Continuous improvement through business value analysis is imperative. Additionally, an agile operations system is vital to address revenue complexities, enable data collection and enhance value proposition, service innovation, churn rate and customer retention, which are essential for SBBM maintenance.

Originality/value

This study delves into how the subscription-based economy is reshaping the business models of tech firms. Beyond exploring the theoretical foundation of this transformative path, this study offers actionable insights on enhancing the value proposition, creation, capture and business value within subscription-based economy frameworks.

Details

International Journal of Industrial Engineering and Operations Management, vol. 6 no. 3
Type: Research Article
ISSN: 2690-6090

Keywords

Article
Publication date: 10 December 2019

Michael LaMagna, Erica Swenson Danowitz and Andrea Rodgers

Academic libraries continue to invest in eBooks to ensure access to content in various formats. This paper aims to examine eBook acquisition models, including patron-driven…

Abstract

Purpose

Academic libraries continue to invest in eBooks to ensure access to content in various formats. This paper aims to examine eBook acquisition models, including patron-driven acquisitions, one-time purchases, focused collection subscriptions or large-scale subscriptions, to better understand how users engage with this content based on usage data.

Design/methodology/approach

Usage data provide insights into eBook acquisition and how access models influence use. This study defines the acquisition model for each eBook purchase. Data were examined to determine usage by acquisition model and cost-per-use.

Findings

This paper finds that for a large suburban community college, a large-scale subscription model has the lowest cost-per-use and serves the largest portion of students. Focused collection subscriptions supported small, specialized programs in the Allied Health, Emergency Services, and Nursing fields.

Originality/value

This paper examines how eBooks are acquired to determine which model best serves an academic library community, specifically a community college library, which is currently underrepresented in the literature.

Details

Collection and Curation, vol. 39 no. 2
Type: Research Article
ISSN: 2514-9326

Keywords

Article
Publication date: 10 November 2023

Yogesh Sharma and Rajeev Sijariya

The purpose of this study is to examine the trends and developments of subscription business models (SBMs) over the past two decades.

Abstract

Purpose

The purpose of this study is to examine the trends and developments of subscription business models (SBMs) over the past two decades.

Design/methodology/approach

The study extracted 469 documents (articles and reviews) from the Scopus database during 2000–2022 and analysed 132 documents (articles and reviews). A bibliometric methodology of scientific mapping was employed, including a cluster analysis based on the bibliographic coupling of documents. Content analysis was also conducted to reveal emerging trends in SBMs.

Findings

The study revealed six emerging themes in SBMs related to consumer behaviour, digital advertising, online news media, journal publications, circular economy and sustainability strategies.

Originality/value

The results of this study provide new and unique insights into the development and trends of SBMs over the past two decades and offer guidance for future researchers to investigate further the phenomenon of SBMs in emerging areas.

Details

Journal of Service Theory and Practice, vol. 34 no. 2
Type: Research Article
ISSN: 2055-6225

Keywords

Article
Publication date: 22 August 2022

Ranjan Chaudhuri, Sheshadri Chatterjee, Arka Ghosh, Demetris Vrontis and Alkis Thrassou

The paper aims to examine the nature and scale of the sustainability value of car sharing and to identify, through consumer analysis, the contextual and consumer factors of…

Abstract

Purpose

The paper aims to examine the nature and scale of the sustainability value of car sharing and to identify, through consumer analysis, the contextual and consumer factors of success of car subscription as a business model.

Design/methodology/approach

The study evaluates the car sharing model against the sustainable development goals defined by the United Nations in 2019. Individual interviews were performed for preliminary understanding of the factors affecting consumers' choices. Subsequently, through two phases of data collection, factor analysis and path model analysis were performed to identify and confirm latent factors. Consumer market segmentation was performed using cluster analysis.

Findings

Car sharing was found to have an overall positive net impact, with certain potential negative dimensions. Willingness, financial affordability, location and experience were identified as the key factors of consumers opting for car subscriptions. The findings further highlight the significant business potentialities of car subscription in India, consequent also to consumers' attitudes toward car ownership.

Practical implications

The research has substantial implications for both society and business, with the former being presented with an innovative sustainable means of transportation, and the latter with the elements of success of an entrepreneurial business model to support the former.

Originality/value

The study is a pioneer in objectively evaluating and prescribing positive social and business value creation for and through car subscription in India, based on consumer analysis.

Details

International Journal of Entrepreneurial Behavior & Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1355-2554

Keywords

Case study
Publication date: 23 June 2016

Mohanbir Sawhney, Pallavi Goodman and Ori Broit

In 2014 WMS Gaming, a manufacturer and seller of slot machines to casinos, was considering a redesign of its existing revenue model. As technology evolved and customer demand for…

Abstract

In 2014 WMS Gaming, a manufacturer and seller of slot machines to casinos, was considering a redesign of its existing revenue model. As technology evolved and customer demand for gaming solutions intensified, new and innovative revenue models were being adopted in other technology markets. Most notably, the subscription revenue model, in which customers paid a monthly subscription fee rather than a large upfront fee, was becoming widely adopted in the software industry. Product manager Dayna Stone had the task of evaluating several revenue models and recommending one that most suited WMS's business needs and at the same time took customer needs and wishes into consideration. Complicating this decision were several factors that would have to be kept in mind. Americans' love of gaming had led to a mushrooming of casinos, which meant increased competition for casino dollars. Yet the financial crisis of 2008 and its aftermath had weakened demand for casinos. In addition, casinos, depending on the type of customers they attracted, differed in their appetite for innovation and maintenance of their slot machines. Students will step into the shoes of Dayna Stone as she undertakes the task of weighing these factors and selecting the right revenue model.

Details

Kellogg School of Management Cases, vol. no.
Type: Case Study
ISSN: 2474-6568
Published by: Kellogg School of Management

Keywords

Article
Publication date: 3 June 2020

Reggie Raju, Jill Claassen, Jeremiah Pietersen and Danielle Abrahamse

This paper investigates the fit for purpose of the flip model proposed by Max Planck Society and Plan S for the African environment. This flipped model is examined against the…

Abstract

Purpose

This paper investigates the fit for purpose of the flip model proposed by Max Planck Society and Plan S for the African environment. This flipped model is examined against the backdrop of African imperatives, which is much broader than just flipping a journal pricing model from subscription to open access. This paper also seeks a viable alternative model that supports the growth of African scholarship and the dissemination thereof.

Design/methodology/approach

This paper adopts a descriptive research methodology, which allows for an in-depth analysis of a phenomenon. By using this method, this paper describes a flip model proposed by global north entities, which do not augur well for the growth of the OA movement in Africa.

Findings

The findings demonstrate that the global north centric flipped model exacerbates the inequality in the publishing landscape by further marginalizing the research voices from the global south. Africa is in dire need of an alternative that denorthernizes the publishing landscape, promote equity and equality, and is more inclusive of the research voices from Africa. South African academic libraries have demonstrated their willingness to experiment with and roll-out library publishing services. This proof of concept has been extended into a continental platform for the publication and dissemination of African scholarship.

Originality/value

This paper will be of interest to those who are grappling with viable alternatives to the current flip models, which include, inter alia, university leadership. This paper will also be of interest to global north libraries who are embarking on library publishing without the social justice obligation but are committed to the OA movement.

Details

Library Management, vol. 41 no. 6/7
Type: Research Article
ISSN: 0143-5124

Keywords

Article
Publication date: 16 July 2019

Yang Geng and Yulin Zhang

This paper aims to study the pricing strategies of an online trading platform with indirect network externalities by considering heterogeneous trading behavior in the downstream…

Abstract

Purpose

This paper aims to study the pricing strategies of an online trading platform with indirect network externalities by considering heterogeneous trading behavior in the downstream market and the long tail.

Design/methodology/approach

The game theory, optimization and comparative static are used in this research. The equilibria are derived from the game theory, and with them, the authors optimize the platform’s profit function. Comparative static is used to study pricing strategies.

Findings

It is found that with heterogeneous trading behavior, the transaction-based model is more profitable than the subscription-based model by reason of the feasibility of “price discrimination”. However, with certain advantages of subscription fees such as avoiding offline transactions, the subscription-based model is better with a concentrated distribution of sellers’ revenues (the Gini coefficient is small). With a lucrative long tail, the platform should set a low price to attract small sellers in the long tail. Besides, if the Gini coefficient is large, the effects of the market entry barrier of sellers on the optimal price in each model may be opposite.

Research limitations/implications

It implies that the choice of revenue models and pricing strategies are influenced by the Gini coefficient or the long tail. The exogenous setting in which buyers can use the platform for free needs further extension.

Practical implications

The authors provide insights on how to choose revenue models and how to price the sellers with the long tail phenomenon.

Originality/value

This paper emphasizes the role of the long tail on pricing strategies and the effect of heterogeneous trading behavior on model selection.

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