Integration of Value Adding Services Related to Financing and Ownership: A Business Model Perspective

Abstract

AbstractIt is an agreed fact among scholars that services are more sustainable compared to the products. By offering services, traditional companies can lock their customers into a long-term and sustainable revenue generation settlement. Available academic literature is abundant with methodologies related to service development. However, this study investigates various value adding service options related to financing and ownership of a product that can be offered on top of the existing products. It is important to understand these options from the consumer as well as supplier perspective. The most well established options available for financing/ownership are compiled, and sorted with respect to intangibility, ownership, financing and value addition scale. The study argues that the identified options incrementally add value to the existing offering by increasing the purchasing power and reducing the ownership obstacles for the customers. However, for the supplier, the decision depends on the trade-off between value addition for the customers and the business model changes required.