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Business models - Essay Example

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In this essay an attempt has been made to explain this aspect of the business model with the help of different examples. For this purpose, different research articles and publications have been used.
While designing or redesigning the business model it is important to keep in consideration several points like the needs of the customers, what activities will fulfil or satisfy those needs, how the activities will be linked, who will perform those activities, how the value be created for different stakeholders, and what revenue models will be integrated. Hence, it can be said that ultimately the business activities and model should be designed in such a way that there is high value creation for all stakeholders along with delivering high financial performance.
Stakeholders’ credibility and financial viability tend to bring in or combine both; financial and social constraints while formulating and designing the overall business model. The business model has two broad factors: on the one hand it keeps in consideration the financial factors and characteristics of the organisation including the methods of revenues, the overall structure of cost, the balance sheet, income statement etc, in order to make sure that all these financial factors are associated with the opportunities and limitations associated with the overall activities and actions of management in order to cut down the costs, increase the revenues, improve the balance sheet and income statement etc. However it is important to understand here that the business model is not only formulated for fulfilling the financial objectives and achieving certain financial returns like specific profit level, return on capital, or other financial goals which reflect overall financial viability. So, on the other hand, business model should also keep in consideration the role of different stakeholders in the overall process of opportunity definition, ...Show more
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With consensus on the fact that CEO must be well informed of the company’s business model, there is little agreement on the operating definition of business model. With all innovations, the ground concept of business model remains as Peter Drucker defined that business model…
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