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CMA Final · Entrepreneurship and Startup · Types of New Age Business

A company lets customers pay a fixed monthly fee to receive a curated box of grooming products at home every month, and customers can cancel at any time. Which new age business model does this best represent?

This is a subscription-based model because customers pay a recurring fixed fee for regular delivery of products and can cancel when they wish. It differs from a marketplace, franchise or crowdfunding, which involve intermediation, brand licensing or fund raising respectively.

  1. ASubscription-based modelCorrect
  2. BFranchise model
  3. CMarketplace aggregator model
  4. DCrowdfunding model

Explanation

Recurring fixed payments in return for regular delivery of products or access is the defining feature of a subscription model. A marketplace connects third-party sellers and buyers, a franchise licenses a brand to operators, and crowdfunding raises money from many contributors.

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