What is a business model?
The term "business model" is confusing. To some people it means the way they do business, to others it means a business tool, and yet again it can mean a business framework. All the definitions are valid it is just that someone could visit this website hoping for insights on different types of business models. The focus of this website is on business frameworks – the analytical frameworks that enable businesses to meet their challenges. For example: How do we fight the competition? What makes our company special? How can I improve my brand? What is the optimum price for my product? These are business challenges that can be addressed with the frameworks on this site.
There are other types of business models so let’s talk about these. These models describe how a company makes its money. They have been described many times in Harvard Business Review articles by academic luminaries such as Peter Drucker, Michael Lewis, and Joan Magrreta. Perhaps the best attempt at defining the way businesses make money was by Mark Johnson in his book, Seizing The Whitespace. In it he listed around 20 different approaches to doing business and nominated some companies as examples. I have modified and synthesised his work in the following table.
Adapted From Seizing The Whitespace by Mark Johnson.