Review of PPX Business Models: Adaptability and Feasibility of PPX Models in the Equipment Manufacturing Industry

Abstract

The overall purpose of this study is to understand how manufacturing companies have so far made use of and can make use of pay-per-x (PPX) business models (BMs) largely in capital product markets, and which mechanisms have helped them in the implementation. Through systematic literature approach this study analysed 14 research publications which exclusively focused on PPX business models. The differences between PPX business model patterns were studied from three perspective, namely criticality of product, need of process knowledge and complexity of the process and its output. We find out that the pay-per-outcome business model, is more prevalent for products which are critical, needs extensive process knowledge and are rather complex. In contrarily, pay-per-output business model is more prevalent when these conditions are not met. However, none of these three factors prevents implementing other type of PPX business model but rather specific business model is more feasible when specific conditions are met. This paper contributes a much more in-depth qualitative view on the patterns and related qualitative arguments for the useful application of PPX models in equipment manufacturing industries and helps to understand the differences between PPX business model types.