The laptop that grows with you: The effects of a flexible subscription model

Abstract

The EdTech scene has experienced a growth spurt due to COVID-19. As a result, education has shifted more towards an online environment. This increased demand for digital products from the education sector has allowed many companies to grow and profit, The Rent Company being one of them. Currently, The Rent Company provides laptop devices to over 200,000 students in the Netherlands, Belgium, and the United Kingdom. This education hardware is offered as part of the Easy4u proposition where a student is guaranteed continued access to a laptop for the duration of the subscription with repairs and loaner devices included. Nevertheless, The Rent Company has found a gap in their current market offering. Due to the rigid fixed subscription model, The Rent Company is unable to offer a laptop that “grows” with the students, resulting in many of them dropping out once their subscription ends even if they still have more than four years of studies to complete. For this thesis, The Rent Company asked the research team whether it is possible to offer an all-encompassing subscription plan to the schools, caretakers, and students. The main goal is to create a model that incorporates the different demands and needs of all different types of customers whilst ensuring the model is flexible enough to meet the changing demands. This thesis has created such a model based on existing literature, internal interviews, expert interviews, and a survey. The result is a model that is both flexible, ensures recurring revenues, and promotes a sustainable life for each laptop. The researchers have also incorporated specific aspects to take into consideration when and how to implement this model from a change strategy point of view. Current literature agrees that a laptop has a lifespan of seven years. Nevertheless, due to planned obsolescence and changing customer needs, a laptop is preferably kept for a maximum of five years by users. Of these laptops, around 70% to 90% can be revamped, ensuring a second life, and reducing the carbon footprint by up to 45%. Although there is a literature gap regarding educational laptops, a second life laptop can be used for up to three years. For the Total Cost of Ownership of such a model, companies are advised to approach their value chain from an activity-based costing concept. Key to the success of a prolonged life cycle for assets is the ability of the company to recognize responsibility centers and assign costs to them. For the implementation of these changes internally, this essay combined both a processual and a descriptive model which can guide the company during the implementation of this and any future change projects. The main takeaway is the need to remain flexible, as change is uncertain in nature, though also the ability to follow several key steps along the road to implementation. By combining the literature with three expert interviews, sixteen internal interviews and a survey with 437 customer responses, this thesis discussed the internal issues in detail. First, most consumers (+60%) seem interested in the possibility to continue using the Easy4u subscription, even after their initial subscription runs out. Nevertheless, a demand for a more updated or advanced model is clearly present in the higher years of secondary education. Communication, both externally towards the customer and internally between departments, is lacking. The communication towards the customer is described as “subpar” and the internal communication distance is often referred to as “the wall”. Other internal issues are the high exposure to seasonality, missing documentation, and the internal data and process system Easy4u. With these criteria in mind, this thesis created a complete model applicable to the Netherlands and Belgium. The main findings are that using this model, a laptop has a maximum first lifetime of four years (three in Belgium) after which the device is mandatory to be swapped resulting in the students following a Device-as-a-Service model. Because of this, it is expected that the throughput time for repairs will significantly decrease, and the peaks times in repairs and preparation will be more spread out. Next, each laptop is revamped within its ADP and care pack coverage, resulting in a final margin for The Rent Company. Once the devices are revamped, they can be offered to a secondary market chosen by the company. Financially, this model trades in some financial certainty for scalability and customer personalization. Internally, the support for the first life model is unanimous whilst the second life model has been subject to many different opinions regarding how to deal with the revamped products (scrapping, selling, renting etc.). This thesis concludes with several key recommendations for the management of The Rent Company. First, a decision needs to be made regarding where and how to deploy the revamped laptops. Several possibilities are listed ranging from using it in the existing markets as a cheaper subscription option to selling it to third parties in developing economies. The second recommendation is regarding the Easy4u platform. A decision needs to be made on how to use the legacy platform in the future: as a generic central database or a platform specified to complete actions for a select few departments. The third recommendation is regarding the change strategy. By combining a theoretical and practical framework, two to four key action points have been suggested for each of the four change dimensions. Crucial are better internal communication, more documentation, and the creation of internal sponsorships by setting up project teams with different focus areas and responsibilities. Moreover, a timeline in which the different steps required to bring this project to a successful launch are explained with a full-scale deployment of the model within four years.