Subscription-based business models in the context of tech firms: theory and applications

Abstract

PurposeThis 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/approachTo 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.FindingsA 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/valueThis 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.