Fixed fee discounts and Bertrand competition in vertically related markets

2020 ◽  
Vol 106 ◽  
pp. 19-26 ◽  
Author(s):  
Maria Alipranti ◽  
Emmanuel Petrakis
Keyword(s):  
Bertrand Competition ◽  
Fixed Fee

A case study: How did IoT start-up Distronix change its business model to sustain growth in the pay-per-use economy

2021 ◽  
pp. 204388692098158
Author(s):  
Dipankar Chakrabarti ◽  
Rohit Kumar ◽  
Soumya Sarkar ◽  
Arindam Mukherjee
Keyword(s):  
Internet Of Things ◽  
Business Model ◽  
Industry 4.0 ◽  
Industrial Revolution ◽  
Project Delivery ◽  
Public Cloud ◽  
Industrial Internet Of Things ◽  
Start Up ◽  
Industrial Internet ◽  
Fixed Fee

Industrial Internet of Things emerged as one of the major technologies enabling Industry 4.0 for industries. Multiple start-ups started working in the Industrial Internet of Things field to support this new industrial revolution. Distronix, one such Industrial Internet of Things start-up of India, started operations in 2014, when companies were not even aware of Industrial Internet of Things. Distronix started executing fixed-fee projects for implementation of Industrial Internet of Things. They also started manufacturing sensors to support large customers end-to-end in their Industry 4.0 journey. With the advent of public cloud, companies started demanding pay-per-use model for the solution Distronix provided. This posed a major challenge to Distronix as they had developed technology skills focusing fixed-fee customized project delivery for their clients. The situation demanded that they change their business model from individual project delivery to creation of product sand-box with pre-registered sensors and pre-defined visualization layer to support use cases for Industrial Internet of Things implementation in multiple industry sectors. It forced Rohit Sarkar, the 26 years old entrepreneur and owner of Distronix, to upgrade capabilities of his employees and transform the business model to support pay-per-use economy popularized by public cloud providers. The case discusses the challenges Rohit faced to revamp their business model in such an emerging technology field, like, to develop new skills of the technical people to support such novel initiative, reorienting sales people towards pay as use model, developing new concept of plug and play modular product, devising innovative pricing, better alliance strategy and finding out a super early adopter.

scholarly journals Equivalence between fixed fee and ad valorem profit royalty

2021 ◽  
Author(s):  
Stefano Colombo ◽  
Siyu Ma ◽  
Debapriya Sen ◽  
Yair Tauman
Keyword(s):  
Fixed Fee ◽  
Ad Valorem

An economic model to compare the profitability of pay-per-use and fixed-fee licensing

2009 ◽  
Vol 51 (3) ◽  
pp. 581-588 ◽  
Author(s):  
Douwe Postmus ◽  
Jacob Wijngaard ◽  
Hans Wortmann
Keyword(s):  
Economic Model ◽  
Fixed Fee

LICENSING BY OUTSIDE INNOVATOR IN HOTELLING MODEL REVISITED

2021 ◽  
pp. 2150041
Author(s):  
YUANZHU LU ◽  
FULAN WU
Keyword(s):  
Technology Licensing ◽  
Economic Modelling ◽  
Hotelling Model ◽  
Royalty Rates ◽  
Optimal Technology ◽  
The Cost ◽  
Cost Differentials ◽  
Fixed Fee

This paper extends Banerjee and Poddar [Banerjee, S and S Poddar (2019). ‘To sell or not to sell’: Licensing versus selling by an outside innovator. Economic Modelling, 76, 293–304] by lifting the cap on per unit royalty rates in the cases of royalty licensing and two-part tariff licensing. We reconsider the optimal technology licensing contract by an outside innovator facing two heterogeneous licensees in a standard Hotelling framework. Our findings show that the optimal licensing policy could be fixed fee to the efficient firm, or two-part tariff to both firms (pure royalty to both firms), or two-part tariff to the efficient firm, depending upon the cost differentials between the firms and the size of innovation.

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