Publication Type

Journal Article

Version

publishedVersion

Publication Date

7-2024

Abstract

Technological advances enable new business models for heavy equipment manufacturers wherein customers access equipment without ownership. We seek to understand the profitability and environmental performance of different emerging business models in light of salient economic and operational factors. We develop a game-theoretic model to identify the optimal choice between a traditional ownership-based business model and two access-based models: servicization and peer-to-peer sharing. After-sales services, equipment characteristics, usage environments, and fuel prices affect this choice. We also provide a novel framework to analyze business models’ environmental impact, which incorporates trade-offs between economic value and environmental costs and shows that all models may create win-win situations for the manufacturer and the environment.

Keywords

Operations and supply chains, Business model innovation, Environmental impact, Sharing economy, After-sales, Durable goods

Discipline

Operations and Supply Chain Management | Strategic Management Policy

Research Areas

Operations Management

Publication

Operations Research

Volume

72

Issue

6

First Page

2263

Last Page

2278

ISSN

0030-364X

Identifier

10.1287/opre.2023.0656

Publisher

Institute for Operations Research and Management Sciences

Additional URL

https://doi.org/10.1287/opre.2023.0656

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