Business Model

A Business Model is a For-Profit Organization Model that defines how an organization creates, delivers, and captures value.

• Context:
  • It can includes key components such as Value Proposition, Revenue Streams, Customer Segments, Channels, Customer Relationships, Key Resources, Key Activities, Key Partnerships, and Cost Structure.
  • It can serve as a blueprint for an organization's strategy execution and operations.
  • It can be designed to exploit new opportunities or to optimize existing business processes.
  • It can be influenced by market conditions, technological advancements, regulations, and societal trends.
  • It can be evaluated and adapted to ensure alignment with organizational goals and changing business environments.
  • ...
• Examples:
  • Subscription Business Model: Customers pay a recurring fee for continuous access to a product or service (e.g., Netflix, Spotify).
  • Freemium Business Model: Basic services are provided free of charge, while premium features require payment (e.g., LinkedIn, Dropbox).
  • Marketplace Business Model: Connects buyers and sellers, facilitating transactions and generating revenue through commissions or fees (e.g., Amazon, Airbnb).
  • Razor-Razorblade Model: Selling a product at a low price to increase sales of complementary high-margin products (e.g., printers and ink cartridges).
  • ...
• Components:
  • Value Proposition: The unique value a company offers to its customers through its products or services.
  • Revenue Streams: The ways a company generates income from its business activities.
  • Customer Segments: The specific groups of customers a company aims to serve and create value for.
  • Channels: The means by which a company communicates with and reaches its customer segments.
  • Customer Relationships: The types of relationships a company establishes with its customer segments.
  • Key Resources: The most important assets required to make a business model work.
  • Key Activities: The most important actions a company must take to operate successfully.
  • Key Partnerships: The network of suppliers and partners that support the business model.
  • Cost Structure: All costs incurred to operate a business model.
  • ...
• Types:
  • Subscription Model
  • Freemium Model
  • Marketplace Model
  • Razor-Razorblade Model
  • Franchise Model
  • Advertising Model
  • Affiliate Model
  • ...
• See also: Business Strategy, Strategic Planning, Business Plan, Lean Canvas, Value Chain, Competitive Advantage

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