There is no standardized definition of what a business model entails. Business people have their own definition of what they call a business model. To some a business model is simply how an organization intends to make money. Others would define a business model in terms of how you provide value for your customers. There is often a lack of a more precise and a shared understanding of what a business model is. One reasons a business model lacks a standard definition is because it entails a broad range of activities, and various organization has a slightly different business model.
In my opinion, a business model includes a clear definition of what products or services are being offered, the product features and the unique business value it will provide to all its constituents. A business model also has to define its target audiences. In addition to all these, a business model have to carefully define it’s strategies of how it plans to successfully implement the product within the marketplace. This includes pricing of its products, where its revenue will come from and how the products will be distributed to the marketplace.
A business model has to completely address its strategic, market, operational and economic factors. The market component of a business model is very important. An organization or industry has to fully grasp what its target consumers want and need. A SWOT analysis comes in useful in this scenario. It has to survey the market fully and do a thorough research to find out what its strengths, weaknesses, opportunities and threats are. Be able to position itself in the right market and at the right time.
Everybody talks about strategy. A business model has to be incredibly innovative when it comes to its strategy. An organization needs to be able ...