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Examples of Business Models.docx.pdf - Examples of Business...

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Examples of Business ModelsFrom:What is a Business Model?ABusiness Modelis a conceptual structure that supports the viability of aproduct or company and explains how the company operates, makesmoney, and how it intends to achieve its goals. All thebusiness processesand policies that a company adopts and follows are part of the businessmodel.According to management guru Peter Drucker:a business model is supposed to answer who your customer is, what valueyou can create/add for the customer and how you can do that at reasonablecosts.Thus a business model is a description of the rationale of how a companycreates, delivers and captures value for itself as well as the customer.The widespread use of business models came into existence with theadvent of the personal computer which let people test and model thedifferent components of a business. Successful business models beforethat were mostly created by accident and not by design. It’s different forbusiness plansandbusiness strategiesthough.Every business model intrinsically has three parts –everything related to designing and manufacturing the product
everything related to selling the product, from finding the rightcustomers to distributing the producteverything related to how the customer will pay andhow thecompany will make moneyDifferent Types of Business ModelsThere are different types of business models meant for differentbusinesses. Some of the basic types of business models are:ManufacturerA manufacturer makes finished products from raw materials. It may selldirectly to the customers or sell it to a middleman i.e another business thatsells it finally to the customer. Examples – Ford, 3M, General Electric.DistributorA distributor buys products from manufacturers and resells them to theretailers or the public. Examples – Auto Dealerships.RetailerAretailersells directly to the public after purchasing the products from adistributor or wholesaler. Examples –Amazon, Tesco.Franchise
Afranchisecan be a manufacturer, distributor or retailer. Instead ofcreating a new product, the franchisee uses the parent business’s modeland brand while paying royalties to it. Examples – McDonald’s, Pizza Hut.Brick-and-mortarBrick-and-mortar is a traditional business model where the retailers,wholesalers, and manufacturers deal with the customers face-to-face in anoffice, a shop, or a store that the business owns or rents.eCommerceE-Commerce business model is an upgradation of the traditionalbrick-and-mortar business model. It focuses on selling products by creatinga web-store on the internet.Bricks-and-clicksA company that has both an online and offline presence allows customersto pick up products from the physical stores while they can place the orderonline. This model gives flexibility to the business since it is present onlinefor customers who live in areas where they do not have brick-and-mortar

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