business model types

To explain business models effectively, we must first grasp their fundamental nature. A business model serves as the blueprint for how a company intends to generate revenue and achieve profitability. It outlines the core components that drive a business, including its value proposition, target market, revenue streams, cost structure, and competitive advantage. Essentially, it answers the critical question: “How does this company intend to make money?”

Key Components of a Business Model explain business models

Several key elements form the bedrock of any successful business model:

• Value Proposition: This defines the unique value offered to customers. What problem does the