Business model



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BUSINESS MODEL
BUSINESS STRATEGY - INDEX
Revenue stream

  • The cash a company generates for each customer segment

  • 2 types of revenue streams:

    • Transaction revenues resulting from one-time customer payments

    • Recurring revenues resulting from ongoing payments to either deliver a value proposition or provide post-purchase customer support

  • Ways to generate revenue streams:

    • Asset sale

    • Usage-free

    • Subscription fees

    • Lending/ renting/ leasing

    • Licensing

    • Brokerage fees

    • Advertising




Pricing mechanisms

Fixed menu pricing

Dynamic pricing

List price

Fixed price for individual products, services

Negotiations

Price negotiated between 2 or more partners depending on negotiating power/ skills

Product feature dependent

Price depends on the number or quality of features

Yield management

Price depends on inventory and time of purchase, used for perishable resources (hotels)

Customer segment dependent

Dependent on the type and characteristics of a customer segment

Real time market

Supply and demand

Volume dependent

Price as a function of quantity purchased

Auctions

Price determined by outcome of competitive bidding




  • Key resources

    • Assets required to make the business model work

    • Categories:

      • Physical: physical assets, i.e. PP&E, distribution networks..

      • Intellectual: brands, proprietary knowledge, patents, copyrights, customer database

      • Financial: cash, lines of credit, stock option pools for employees

      • Human




  • Key activities

    • The most important things a company must do to make its business model work

    • Categories

      • Production: designing, making and delivering a product in substantial quantities/ superior quality

      • Problem solving coming up with new solutions to individual customer problems

      • Platform/ network



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