A business model performs two important functions:
* It creates value
** This requires the definition of a set of activities: from raw materials to the end customer, that will yield a certain product or service
* It captures a portion of that  value
** This requires the establishing of a unique resource, asset or position in which the firm enjoys a [[Sustainable Competitive Advantage]].
When [[Selecting an appropriate business model]] there are [[six question to ask|Business Model: Six Core Questions to ask]]. There is a wide variety of definitions for a business model:
* A business model is the organization's core logic for creating value
* A business model is the description of the key components defining a business idea, including products and services, actors, roles, information, revenues, and benefits
* A business model is a unique configuration of elements comprising the organizations goals, strategies, processes, technologies and structure conceived to create value for customers and thus compete successfully in a particular market
* A business model is the configuration of resources that enable a company to create and deliver a [[Customer Value Proposition]] for a [[Market Segment|Market Segmentation]]. (from [[Marketing Strategy and Organization: Building Sustainable Business]])
The consensus among resources to common elements of a business model are:
* Mission (strategic objectives)
* Target market (scope and market segment)
* Value proposition (product / service offering)
* Resources (Capabilities and assets)
* Key activities (organisational processes)
* Cost and revenue model (pricing policy)
* Value chain / Value network (alliances and partnerships)

See also: [[Business Model Canvas]], [[Summary book 'free' - 50 business models for 'free']]
Part of: [[M8-S2 - Reading - Mark W. Johnson, Clayton Christensen, and Henning Kagermann, Reinventing your business model]]
Part of: [[M8-S3 - Reading - Chesbrough, Why companies should have open business models]]
Sat, 09 Jul 2011 07:14:56 GMT
Sat, 09 Jul 2011 07:14:56 GMT