Business Model: An Introduction

A Business model is that framework which outlines how a company creates, delivers and captures value. It includes the products and services which are being offered, the target market and the financial strategy employed by the company. The following are the things which are covered in a business model:

1. Revenue streams: How the company plans to make money?
2. Customer Segments: What is the customer base?
3. Value Proposition: What makes the product or service of the company attractive for the customer?
4. Channels of Communication: How does the company reach out to their customers?
5. Key activities: What are the most essential activities performed by the company to achieve its objectives?
6. Key Resources: What resources are required by the company to undertake its operations?
7. Key Partnerships: What types of strategic alliances it will undertake for undertaking its activities? 
8. Cost structure: What is the ideal cost structure for running the business that is proposed to be undertaken?

So the business model is a strategic plan for achieving profitability in a business. It outlines how a company creates value for itself while it delivers products or services to the customers. It gives an understanding in a holistic manner as to how a business operates, earns and sustains profitability. 

We will cover the each element in detail. Stay tuned for more updates.

Read more: Element 1 of Business Model: Value Proposition