Summary
This case showcases how access- and ownership-based business models segment the market based on useage heterogeneity, and how pricing equilibrium emerges from the resulting duopoly. It also shows, counter-intuitively, that access-based entrants may intentionally benefit from choosing “inferior” technology to soften price competition from ownership-based incumbents, even when the cost of technology is ignored.
Keywords
- Pricing
- Access versus ownership
- Segmentation
- Servicization
- Q41819
