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What is a Business Model? A Complete Guide with Examples

What is a Business Model?

Understanding the blueprint of how companies create, deliver, and capture value

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Every successful company operates on a business model, whether they've explicitly defined it or not. But what exactly is a business model, and why does it matter? Let's break down this fundamental concept that determines whether a company thrives or struggles.

The Simple Definition

A business model is the logic of how a company creates value for customers and captures value for itself. It's the blueprint that explains how your business works, who it serves, what resources it needs, and how all the pieces fit together to generate profit.

Think of a business model as the answer to these fundamental questions:

  • What value do you create for customers?
  • Who are your customers?
  • How do you deliver that value to them?
  • What resources and activities are required?
  • How do you make money from this?
  • What does it cost to operate?

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