Business model

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BUSINESS MODEL
BUSINESS STRATEGY - INDEX

Cost structure

Key partnerships

Network of suppliers and partners
4 types:
- Strategic alliances between non-competitors
- Cooperation between competitors
- Joint ventures to develop new businesses
- Buyer-supplier relationships to assure reliable suppliers
Motivations for creating partnerships:
- Optimization and economy of scale
- Reduction of risk and uncertainty
- Acquisition of particular resources and capabilities

Cost structure
- All costs incurred to operate a business model
- 2 broad classes:
  - Cost-driven: minimizing costs whenever possible
  - Value-driven: focus on value creation, premium value propositions
- Characteristics:
  - Fixed costs
  - Variable costs
  - Economies of scale
  - Economies of scope: larger scope of operations

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