The Four Components Of A Business Model

Decent Essays

A business model is defined as a process of an organisation to create, deliver and capture value. In any context, a business model is interrelated to a business strategy [8].
Components of a successful business model are: Strategic Decisions Value Creation Value Capture Value Network [9]
Figure 1 below shows components and subcomponents of a business model. Figure 1: Components of a business model [9]

4V Business Model
A 4V business model will be used to help build a model that should assist the South African metered industry. The 4V business model has four components namely value proposition, value creation, value capture and value network. Details of each component is as follows. Value Proposition
A value proposition in definition is a statement that is made with regards to why customers should buy products or services offered by a company. In essence, a value proposition is a promised benefit that a company delivers through its products and services. One of the reasons why a customer prefers one company over another, is due to value proposition [10]. …show more content…

A value proposition should aim to solve problems of customers or satisfy the needs of customers [10].
There is a need for a value proposition within companies, in order to add value to the experiences of customers. There are three elements of a value proposition namely capacity, impact and cost. Capacity has to do with what a company is able to do or offer a customer. Impact means that, in what way the offered products or services will be of help to the success of a customer. Cost is, in this regard, what the customer will have to pay for the treat

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