Business Model Definition

A business model is a plan for how a company will generate revenue and make a profit. It includes information on what the company sells, what customer needs it satisfies, what costs it incurs, and what pricing strategy it will use.

The business model definition can be broken down into four key components:

1. What the company sells: This can be physical goods, services, or digital products.

2. What customer needs it satisfies: Every business must identify the needs of its target market and determine how its product or service meets those needs.

3. What costs it incurs: All businesses have costs associated with creating and selling their products or services. These costs must be carefully managed in order to generate a profit.

4. What pricing strategy it will use: Pricing must be aligned with the company’s overall business strategy. For example, a company may choose to price its products low in order to gain market share, or it may choose to price its products high in order to maximize profits.