Essay about business model 1

842 Words4 Pages

RQ1 What is a Business Model? At least 2 paragraphs.
The first step in implementing an effective business model is to adequately understand the definition. Osterwalder and Pigneur (2010) define a business model as “the rationale of how an organization creates, delivers, and captures value.” (14) In simple terms, a business model is an outline or a blueprint an organization uses to constract effective processes, structure, and systems.
While business models can be complex and unique, a basic understanding and definition of a business model is important for success. To simplify the complexities of defining a business model, one can view customer segments, value
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Likewise, a poor business model is often blamed for a firm’s failure. Models, like strategy, are important ways that a company can plan, adjust, and succeed.
As described previously, a business model can be seen as a blueprint and such plans give direction, meaning, and purpose. Business models can also be perceived as scale models used for larger implementation. (Doganova & Eyquem-Renault, 2009) Whether implemented by an entrepreneur or by an establish market leading organization, business models allow for firms to put a plan to paper and support their plan with data. This allows an organization to plan carefully for the risks and opportunites that they will face as they put the model into practice.
RQ3 What role do value propositions perform in successful business models? At least 2 paragraphs.
Osterwalder and Pigneur (2010) describe value propositions as the “bundle of products and services that create value for a specific customer segment.” (22) This building block of a business model is essential in that it is the reason why consumers value one company over another. Value Propositions can also help organizations create customer loyalty and retention. With intense competition in markets, value propositions are an important part of a business model because it addresses competition and attempts to set the firm apart from the other choices presented to its customer base.
Value Propositions relate very closely to the
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