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Rent Instead Of Buy 40#
The customer does not buy a product, but instead rents it. This lowers the capital typically needed to gain access to the product. The company itself benefits from higher profits on each product, as it is paid for the duration of the rental period. Both parties benefit from higher efficiency in product utilization as time of non-usage, which unnecessarily binds capital, is reduced on each product.
Examples: Iconic Cases
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.
Learn more about Mobility Carsharing →
How they do it: Hilti’s ”Fleet Management” allows customers to rent its tools for a fixed monthly payment instead of needing to buy them. This contract includes the exchange of tools for the newest models as well as service and maitenance. The customer avoids a upfront investment and has an easy way to budget the tool costs going forward.
Learn more about Hilti →
How they do it: Initially Netflix started with a DVD rental by mail, allowing customers to order DVDs to their home. In 2007 they introduced the streaming platform which is now the core offering of the company.
Learn more about Netflix →
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.
Learn more about Foxconn →
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.
Learn more about Xerox →
Below, the top industries for the pattern "Rent Instead Of Buy" are displayed, in order to get insights into how this pattern is applied across different industries. We've collected data from 13 firms using this pattern.
Top Industries
Transportation
18% of firms using pattern
18% of firms using pattern
Consumer Goods
14% of firms using pattern
14% of firms using pattern
Information Technology
9% of firms using pattern
9% of firms using pattern
All Industries
Below, the pattern "Rent Instead Of Buy" is analyzed based on co-occurrence, in order to get insights into how this business model pattern is applied in combination with other patterns within the firms we studied.
Top Co-Occurrences
Affiliation
1 pattern co-occurrences
1 pattern co-occurrences
Pay Per Use
1 pattern co-occurrences
1 pattern co-occurrences
Subscription
1 pattern co-occurrences
1 pattern co-occurrences