The Business Model

The business model is like a blueprint for a strategy to be implemented through organizational structures, processes, and systems.It clearity states

• Who's your target customer?
• What customer problem or challenge do you solve?
• What value do you deliver?
• How will you reach, acquire, and keep customers?
• How will you define and differentiate your offering?
• How will you generate revenue?
• What's your cost structure?
• hat's your profit margin?

Thus in all,it clearly combines the blocks, namely - Key partners,key activities,value proposition ,customer relationships, customer segment , key resources , channels , revenue streams and cost structure, and thus builds a strong foundation.

A business model describes a company’s operations, including all of its components, functions and processes, which result in costs for itself and value for the customer. Therefore, it is how the engine of the business actually works. The objective is to have low cost and high value and thus maximise profit.  A company’s strategy of combining the four factors of production, namely land, labour, capital and enterprise, will determine its unique business model, the superiority of which over the competition is a crucial determinant of sustainable, competitive advantage.

A business model is of crucial importance in choosing winners. It can only be achieved in two ways, namely Low cost and being different,both of which management must comprehend and sustain: