Business Model and Organization – Interdependencies for Customer-Centric Continuous Innovation in Subscription Business

Abstract

Subscription business models are increasingly gaining attention in the manufacturing industry. By consequently focusing on solving the customers' problems instead of focusing on products, machine manufacturers may establish a long-term relationship with their customers and gain a stronger competitive position. In order to be successful, the business model needs to include the ability for continuous innovation and thus steadily increase the customers' benefits. At the same time, the introduction of a new business model comes along with a complex set of implications for the provider's organization. Literature suggests that mutual dependencies between the provider's business model, its organization and customers exist. Yet no management model so far is able to illustrate the complexity of these interdependencies in subscription models. The presented work intends to do so by including both the direct interdependencies between business models and organizations as well as indirect interdependencies which are caused by continuous innovation of offers and customer interactions. The model serves manufacturers of the machinery and equipment industry as an organizational guideline in managing subscription business models.