THE FOUR
PARTS OF
A BUSINESS MODEL
13 COMMON COMPONENTS OF A BUSINESS MODEL 13 COMMON COMPONENTS OF A BUSINESS MODEL
identifies what you
are offering to a
particular customer
segment, the value
generated for those
customers, and how
you will reach and
communicate with them.
are the people who
populate the segments
of a market that your
offering is serving.
They are the individuals
or businesses willing
to pay for what you
are offering.
generally includes
all the key resources
(people, technology,
products, suppliers,
partners, facilities)
that an entrepreneur
must have to drive the
value proposition.
defines the revenue
and cost structures
a business needs to
meet its operating
expenses and
financial obligations.
The OFFERING CUSTOMERS The INFRASTRUCTURE FINANCIAL VIABILITY
The Problem
Every new business begins with a problem. Successful entrepreneurs
uncover what target customers need, provide solutions to meet those
needs and relieve the pain points.
Sales
Channels
A company's sales channels determine how the company reaches
its customers.
The Solution
The solution outlines how the company intends to meet the customers' needs.
Revenue
Streams
Revenue streams describe how the company generates income.
Key
Resources
Key resources consist of the physical, intellectual, human,
and financial assets at a company.
Revenue
Model
A company's revenue model identifies how the company will make
money and generate profits.
Customer
Segments
Customer segments involves identifying the company's target
customers. Dividing customers into particular groups helps companies
to market to each group more effectively.
Key
Partners
Entrepreneurs can't do everything alone, which is why they need to
team up with other key partners such as suppliers, distributors and
other business associates, to help grow the company and make it
become more efficient.
Unique Value
Proposition
The unique value proposition explains why the customer is
willing to buy the solution.
Cost
Structure
The cost structure represents all the expenses required to run the
company and how those costs impact pricing.
Competitive
Landscape
Every company has to deal with a certain amount of competition in
their industry. Entrepreneurs need to assess the competitive landscape
by focusing on the other alternatives that customers could use.
Key
Metrics
A company's key metrics show how the company measures success
by tracking its overall performance.
Competitive
Advantage
Companies gain competitive advantage by showcasing characteristics
that are not easily copied or bought elsewhere.
Source:
Introduction to Business:
For a Sustainable and Entrepreneurial Future
Second Edition
Heidi M. Neck, Ph.D.
Christopher P. Neck, Ph. D.
Emma L. Murray, BA, H. Dip
Looking for more Introduction to Business content to share with your students?
Visit collegepublishing.sagepub.com/intro-business.
Source:
Introduction to Business:
For a Sustainable and Entrepreneurial Future
Second Edition
Heidi M. Neck, Ph.D.
Christopher P. Neck, Ph. D.
Emma L. Murray, BA, H. Dip
Looking for more Introduction to Business content to share with your students?
Visit collegepublishing.sagepub.com/intro-business.
