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When does a freemium business model lead to high performance? - A qualitative comparative analysis based on fuzzy
Yanying Shang1, Junfeng Jiang1,2, Yamin Zhang1
1School of Economics and Management, Xi'an University of Technology, China.
Heliyon
|February 9, 2024
Summary
Freemium business models drive performance when bundled and fragmented, requiring dynamic capabilities and environmental awareness. Specific configurations, like high sensing and seizing, are key for success in uncertain markets.
Area of Science:
- Business Strategy
- Information Systems
- Organizational Behavior
Background:
- Existing research lacks clarity on performance variations in freemium business models.
- The interplay between freemium strategies, dynamic capabilities, and environmental factors is underexplored.
Purpose of the Study:
- To investigate how freemium business model configurations influence performance.
- To explore the interaction of freemium models, dynamic capabilities, and environmental uncertainty for high performance.
Main Methods:
- Utilized fuzzy set qualitative comparative analysis (fsQCA).
- Analyzed data from 45 freemium business model applications.
Main Results:
- Bundled and fragmented freemium models are crucial performance drivers, contingent on dynamic capabilities and environmental uncertainty.
- High sensing and seizing capabilities are vital for bundled/fragmented models; specific configurations can ensure high performance.
- Under high uncertainty, fragmented models (with or without bundled) combined with strong sensing, seizing, and reconfiguring capabilities lead to high performance.
Conclusions:
- Freemium business model configuration, dynamic capabilities, and environmental uncertainty interact complexly to determine performance.
- Provides actionable insights for optimizing freemium strategies and capability configurations in dynamic environments.
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