How they do it: Computer manufacturer Dell was one of the pioneers in employing a build-to-order strategy in the 1980s. Computers were first customized and paid for by the customers, with invoices for the computer parts from the suppliers having lenghier payment deadlines. This allowed it to achieve a highly negative cash conversion cycle. In its early years the Cash Machine pattern presented an important means for Dell to finance its growth. At its founding in 1984, Michael Dell’s seed capital consisted of a mere US $1,000.
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How they do it: Amazon Web Services offers pricing for it’s computing pricing on an annual, pre-paid schedule. These so-called ”Reserved Instances” provide customers with a significant discount (up to 75%) compared to On-Demand instance pricing.
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How they do it: American Express developed the traveller’s cheque in 1891. It is a business model innovation based on the Cash Machine pattern. It emerged from the problem faced by American Express’ own employees who travelled abroad and had difficulty obtaining cash in a foreign country.
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How they do it: Blacksock’s subscribers purchase and pay their sock subscription in advance, allowing the company to use the increased liquidity to finance other areas such as growth.
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How they do it: McFit customer’s pay their monthly subscription fee upfront which gives the company a fixed income stream. This can be used to finance the fitness center infrastructure.
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