Business ModelsLocked: included in All Access

What a business model is and how analysts read one: the customers (who), the offering (what and why), the channels (where), the pricing (how much) and the organisation and value chain (how), plus the profit logic behind them; the main pricing models; the conventional business models and their variations; and how business model innovation, digital technology, network effects and platforms reshape industries.

1. 1. What a business model describes: customers and offeringA business model is a plain description of how a business works: who it serves, what it sells and why customers buy, where it sells, how much it charges and how it is organised to deliver, and the analyst should build that picture independently rather than take management's word for it.Locked: included in All Access13 min
2. 2. Channels: how the offering reaches customersThe channel strategy, selling and delivering through intermediaries, directly or through both, shapes revenue, cost behaviour, risk and comparability with peers.Locked: included in All Access12 min
3. 3. Pricing: power, premiums and price discriminationWhere a firm can price depends on competition and differentiation: commodity sellers take the market price and compete on cost, differentiated sellers enjoy pricing power, and most firms use price discrimination through tiered, dynamic, value-based or auction pricing to charge different customers different amounts.Locked: included in All Access14 min
4. 4. Bundles, razors, freemium and subscriptionsFirms with several or complex products use bundling, razor-razorblade and add-on pricing; firms chasing scale use penetration, freemium or hidden-revenue pricing; and many offer use without ownership through subscriptions, leasing, licensing and franchising.Locked: included in All Access13 min
5. 5. Value proposition, value chain and profitabilityThe value proposition is why customers choose the firm at its price; the value chain is how the firm is organised to deliver it; and the profit logic shows how prices and volumes cover fixed and variable costs, now or at greater scale.Locked: included in All Access14 min
6. 6. Conventional business models and their variationsMost companies run one of eight long-established models, or a combination or industry-specific variation of them such as contract manufacturing, value added reselling, licensing and franchising, and where a firm sits in the supply chain shapes how it handles risks such as input price shocks.Locked: included in All Access14 min
7. 7. Business model innovation, network effects and platformsNew business models, often launched by new entrants using new technology, become tomorrow's conventions; digital technology made location matter less, outsourcing and targeted marketing easier and network effects far more powerful, giving rise to one-sided and multi-sided platforms.Locked: included in All Access13 min