What is a Business Model?. Model A model is a plan or diagram that’s used to make or describe something. Business Model
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A model is a plan or diagram that’s used to make or describe something.
A firm’s business model is its plan or diagram for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the profits it generates.
The term “business model” is used to include all the activities that define how a firm competes in the marketplace.
A business model involves:
Activities and organization
Factor and production input suppliers
Competitors : factors affecting the business
Customer perceive products subjectively.
Managingcustomer´sperceiptions is important.
Ex: Microsoft and Sun aredif from customersperspectiveeveniftheyareoffering the same product.
Customer mayassociate the product with :
Management of the following should be addressed :
Division of labors
Division of responsabilities
Means of control and coordination
A business model shouldidentify :