What: The MIT Sloan reviews the subscription business model, which is credited with many benefits for businesses.

Why it is important: Inflation and supply chain disruption might make it harder for businesses to meet their obligations to customers on subscription plans.

MIT Sloan Management Review explores the subscription model and reviews its advantages for businesses (simplicity, ease of communication, generation of predictable long-term revenues, and high level of service).

However, the identified factors for success might be undermined by 2 unanticipated risks: supply chain disruption, and inflation. The combination of both factors creates deep interrogations for businesses based on subscription, as the question on whether they can still afford to meet the obligations they have made to their customers is raised, all the more in an inflationary context when customers could be tempted to give up their subscriptions.

MIT Sloan authors review a few business cases and the options at hand for business leaders involved in such operations.

New threats to the subscription model