Business Models...

A business model (also called a business design) is the instrument by which a business intends to generate revenue and profit. It is a summary of how a company means to serve its employees and customers, and involves both strategy (what an business intends to do) as well as an implementation (how the business will carry out its plans).

A business model describes how a business:

• Selects its employees and customers

• Defines and differentiates it product or service offerings

• Satisfies its employees and customers needs

• Acquires and keeps employees and customers

• Goes to the market

• Defines the tasks to be performed

• Develops a sustainable presence with respect to the environment and society

• Configures its resources, and

• Captures profit

There are many types of business models. Generally, the business models of service firms are more complex than those of manufacturers and resellers. The oldest and most basic business model is the shop keeper model. This involves setting up a store in a location where potential customers are likely to be and displaying a product or service.

A business model is a description of how an organisation functions, a general template that describes its major activities. It identifies the firm’s customers and the products and services it offers. A model also provides information about how a firm is organised and how it generates revenues and profits. Business models combine with strategy to guide major decisions at a firm. The model also describes products and services, customer markets and business processes.

It used to be possible to adopt a business model and work to it for many years. However, times are changing and companies must continuously rethink their business design. Companies must change their business models as value migrates from industry to industry. Ultimately the success or failure of a company depends first on how well its business design matches its customers' priorities.

If after reading this you think Alsbury Management Solutions Limited can help, then use the contact page or call us on 0870 879 0590 to discuss your needs.