Business Model

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

• Context:
  • It can include 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.
  • ...
• Example(s):
  • a Subscription Business Model that involves customers paying a recurring fee for continuous access to a product or service, such as Netflix or Spotify.
  • a Freemium Business Model that provides basic services free of charge, while premium features require payment, such as LinkedIn or Dropbox.
  • a Marketplace Business Model that connects buyers and sellers, facilitating transactions and generating revenue through commissions or fees, such as Amazon or Airbnb.
  • a Razor-Razorblade Model that involves selling a product at a low price to increase sales of complementary high-margin products, such as printers and ink cartridges.
  • ...
• Counter-Example(s):
  • Non-Profit Organization, which operates to serve public or social benefits rather than focusing primarily on profit generation.
  • ...
• See: Business Strategy, Strategic Planning, Business Plan, Lean Canvas, Value Chain, Competitive Advantage, Business Culture, Organization, Value Creation, Alexander Osterwalder, Yves Pigneur, Profit (Economics), Mission Statement, Business Process, Target Market, Infrastructure

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References

2024

• (Wikipedia, 2024) ⇒ https://en.wikipedia.org/wiki/business_model Retrieved:2024-4-18.
  • A business model describes how an organization creates, delivers, and captures value, in economic, social, cultural or other contexts. For a business, it describes the specific way in which it conducts itself, spends, and earns money in a way that generates profit. The process of business model construction and modification is also called business model innovation and forms a part of business strategy.

    In theory and practice, the term business model is used for a broad range of informal and formal descriptions to represent core aspects of an organization or business, including purpose, business process, target customers, offerings, strategies, infrastructure, organizational structures, profit structures, sourcing, trading practices, and operational processes and policies including culture.

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