How they do it: Xerox was a pioneer in supplying photocopiers and printers to enterprises on a rental basis in the late 1950s. Instead of buying equipments with a high initial capital expenditures, firms could rely on flexible rental contracts.
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How they do it: Foxconn also acts as contract manufacturer for companies such as Apple. This allows Apple to utilize Foxconn’s large production facilities and low cost facilities to mass-produce their products. By offering contract manufacturing Foxconn allows its customers to avoid building own production facilities which would require large investments.
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How they do it: On Spotify, users are unable to purchase individual songs or albums. Rather, they gain access to all songs on their platform for a flatrate, monthly fee. Access is granted based on the membership and not via a purchase, making music consumption more flexible for customers.
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How they do it: Mobility’s value proposition is to have a model of shared car ownership. Hence, individual customers can avoid purchasing and maintaining a car but join the cooperative and thus get the right to use a car as they need it. As a lot of cars that are privately owned have significant downtime, the model of shared ownership increases the utilization of the individual car and thus lower the cost for everyone.
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How they do it: Blockbuster leveraged exclusive agreements with publishers in order to pass on cost savings to customers. Customers paid a monthly fee for video rental. In addition to benefiting from a lower initial price, Blockbuster also capitalized on the fact that movies were generally not available for purchase at affordable price points during initial release periods. Thus customers had a choice to rent, wait, or buy the film on tape at the much higher manufacturer’s suggested retail price targeted at other rental chains and film enthusiasts, which at that time ranged between $70–$100 per title.
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