What is business model and what are the types of business model?

business model
Recent activity on Sep 13, 2018
3 Answers
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Ben asked on Sep 11, 2018
Looking for case partner in all levels to improve my case interview skill regularly. Available in afternoon or night (GMT+7).

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Anonymous updated the answer on Sep 13, 2018

Hi Ben,

An excellent overview of what a business model is, what different business models look like and how you build one is the book "Business Model Generation" by Alexander Osterwalder.

That being said, permit me some very blunt advice (I am German, after all):

If you were on my team, I'd probably rip your head off for such a question. Maybe not the first time around, but definitely the second. Because it is just lazy and inconsiderate of other people's time to ask a question that Google can answer in a split second.

(https://www.google.de/search?q=what+is+a+business+model%3F&rlz=1C1CHBD_deDE781DE781&oq=what+is+a+business+model%3F&aqs=chrome..69i57j69i60j0l4.5252j0j4&sourceid=chrome&ie=UTF-8)

Whenever you come to someone - especially more senior people - with a question, make sure that you have done your homework and that asking this person is really the best and maybe the only way to find out the answer.

(edited)

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Benjamin
Expert
replied on Sep 12, 2018
ex-Manager - Natural and challenging teacher - Taylor case solving, no framework

Hi Ben,

Business model refers to the economic structure of your company :

- how do you generate revenue : selling goods / selling services / subventions

- what are the cost associated

Let's take an example for a SaaS startup such as Sales Force :

- revenue is generated by one off when seting up the systeme for a new client + subscription fee based on number of users and functionnalities unlocked

- cost structure is of course the sales guys visiting the client + all the cost associated to developping and maintainng the solution

Hope this helps

Feel free to ask more details if needed.
Best
Benjamin

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Vlad
Expert
Content Creator
replied on Sep 11, 2018
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

In the broad sense the business model is how you actually make the money. There are tens if not hundreds of business models. (e.g. subscription, marketplace, b2b sales and even more granular depending on the industry)

Best!

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