Business Model

Author: Andrianna Zachari (Student Msc International Marketing, The Claude Littner Business School, University of West London).

Talking about marketing strategy, in Thursdays class, came to our minds what “business model” is. I would like to give you one from the many definitions that I found and also to add another definition.

A business model is the way in which a company generates revenue and makes a profit from company operations. Analysts use the metric gross profit as a way HP company the efficiency and effectiveness of a firm's business model. Gross profit is calculated by subtracting the cost of goods sold from revenues. (Investopedia).

Michael Lewis refers to the phrase business model as “a term of art.” According to him the simplest explanations of what Business Model is that: “All it really meant was how you planned to make money”.

From one company to another the business model differs. For example for Microsoft, was to sell software for 120 bucks a pop that cost fifty cents to manufacture. (Harvard Business Review).

Inspired from all the others definitions, allow me to add my personal definition of what business model is: “A business model is a business plan to come up with an idea. Is the progress that will need to make the idea comes real and applicable in order for the company to achieve the future goals and receive a long-term loyalty from it's customers.”