Business Models

Introduction

A business model describes the rational of how an organization creates, delivers, and captures value Business models are used to describe and classify businesses They are also used by managers inside companies to explore possibilities for future development

Business models

The business model is a statement of how a firm will make money and sustain its profit stream over time. The Business Model is referred as the blueprint of how a company does business The business model is the totality of how a company selects its customers, defines and differentiates it offerings, defines the tasks it will perform itself and those it will outsource, configures its resources, goes to market, creates utility for customers and captures profits

Why a business model is so important?

a. Low cost b. Different C.The holy grail-When I was young I used to think that wealth and power would bring me happiness. I was right.Gahan Wilson, cartoonist.

Design content emphasis of business model

Business model design includes the modeling and description of a company's: Value Propositions- What do we offer to our customers? WHAT Target customer segments- Who are our customers?-W Distribution channels- How do we reach them?-W Customer relationships- How do we get and keep them?W Value configurations- How do we create and deliver?-H Core capabilities- what are our key competencies?- H Partner network- How do we collaborate?-H Cost structure- What are our cost?- HM Revenue model- what are our revenue and pricing?-HM

Types OF Business models

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The bait and hook business model also referred as razor and blades business model Bricks and clicks business models- offline and online Collective Business model-A university research park, science park Cutting out middlemen model- internet Direct sales model- tupperware Distribution sales model

Types OF Business models

6. Value added resale model- soft ware, electronics 7. Franchise model- Macdonald 8. Freemium business model- social networks 9. low- cost carrier business model 10. Subscription business model- Newspapers, Entertainments

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