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What is a Business Model?

Components of a Business Model. World Sustainability Collective

Would you travel 2850 miles, write a business plan on the way and start your new company in a garage?

Well a few famous companies started life in a garage but I’m talking about Jeff Bezos’s Amazon

When he started in 1995 his business model sold books online with a faster inventory turnover that allowed him to discount the inventory mark up versus traditional bookstores and compete on price

He expanded that model to other products successfully before he tried copying the eBay auction model. That failed!

So he experimented brokering other peoples products on his site and optimised that service and sold them alongside his own

In 2007 he used his capabilities and a talented hire to develop Kindle that accessed all titles on offer with a click!

Now he has a subscription model that accesses Prime video content but by also offering members enhanced delivery Prime customers buy more products on Amazon

His B2B venture into Cloud services in 2006 is a market leader

But what is a business model?

There are 4 basic parts

·      The Customer Value Proposition (CVP)

·      The Profit Model

·      Key Resources

·      Key Capabilities

The document below expands on each part

Do you have a clearly defined business model running your business?

Here are the components of a Business Model

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