Are you an EPFL student looking for a semester project?
Work with us on data science and visualisation projects, and deploy your project as an app on top of GraphSearch.
Concept
Business model
Summary
A business model describes how an organization creates, delivers, and captures value, in economic, social, cultural or other contexts. The process of business model construction and modification is also called business model innovation and forms a part of business strategy.
In theory and practice, the term business model is used for a broad range of informal and formal descriptions to represent core aspects of an organization or business, including purpose, business process, target customers, offerings, strategies, infrastructure, organizational structures, sourcing, trading practices, and operational processes and policies including culture.
The literature has provided very diverse interpretations and definitions of a business model. A systematic review and analysis of manager responses to a survey defines business models as the design of organizational structures to enact a commercial opportunity. Further extensions to this design logic emphasize the use of narrative or coherence in business model descriptions as mechanisms by which entrepreneurs create extraordinarily successful growth firms.
Business models are used to describe and classify businesses, especially in an entrepreneurial setting, but they are also used by managers inside companies to explore possibilities for future development. Well-known business models can operate as "recipes" for creative managers. Business models are also referred to in some instances within the context of accounting for purposes of public reporting.
Over the years, business models have become much more sophisticated. The bait and hook business model (also referred to as the "razor and blades business model" or the "tied products business model") was introduced in the early 20th century. This involves offering a basic product at a very low cost, often at a loss (the "bait"), then charging compensatory recurring amounts for refills or associated products or services (the "hook"). Examples include: razor (bait) and blades (hook); cell phones (bait) and air time (hook); computer printers (bait) and ink cartridge refills (hook); and cameras (bait) and prints (hook).
Official source
About this result
This page is automatically generated and may contain information that is not correct, complete, up-to-date, or relevant to your search query. The same applies to every other page on this website. Please make sure to verify the information with EPFL's official sources.
Related publications (33)
Related people (8)
Related units (1)
Related concepts (30)
Business model
A business model describes how an organization creates, delivers, and captures value, in economic, social, cultural or other contexts. The process of business model construction and modification is also called business model innovation and forms a part of business strategy. In theory and practice, the term business model is used for a broad range of informal and formal descriptions to represent core aspects of an organization or business, including purpose, business process, target customers, offerings, strategies, infrastructure, organizational structures, sourcing, trading practices, and operational processes and policies including culture.
Strategic management
In the field of management, strategic management involves the formulation and implementation of the major goals and initiatives taken by an organization's managers on behalf of stakeholders, based on consideration of resources and an assessment of the internal and external environments in which the organization operates. Strategic management provides overall direction to an enterprise and involves specifying the organization's objectives, developing policies and plans to achieve those objectives, and then allocating resources to implement the plans.
Business plan
A business plan is a formal written document containing the goals of a business, the methods for attaining those goals, and the time-frame for the achievement of the goals. It also describes the nature of the business, background information on the organization, the organization's financial projections, and the strategies it intends to implement to achieve the stated targets. In its entirety, this document serves as a road-map (a plan) that provides direction to the business.
Related courses (27)
MGT-498: Platforms & digital business models
This course is a hands-on introduction to platform strategy and digital business models. Students will apply theoretical insights to practical cases and will work in groups to develop own business ide
CS-410: Technology ventures in IC
This hands-on class gives graduate students in IC interested in startups the opportunity to learn and put in practice the fundamental skills required to assess a technology concept in the context of a
MGT-413: Entrepreneurship & new venture strategy
A foundational course on the science and practice of launching new ventures. The purpose is to study and experience the first stages of the entrepreneurial process: from the identification of promisin
Related MOOCs (8)
Launching New Ventures [retired]
Develop your promising idea into a successful business concept proposal, and launch it! Gain practical experience in the key steps of the venture creation process, including marketing and fundraising.
创建企业: 科技的创业技术与战略 / Launching New Ventures (Chinese Version)
创业指南是一门关于创业和科技导向的创业公司策略的课程。它是为想要学习如何成功创业的专业人士，创业者和学生所设计的。通过短而轻松愉快的课程，对世界各地创业者鼓舞人心的采访，小测试，推荐书目和一个终期实践项目，学生可以全面地了解创业策略，不论在任何地方，行业或创业阶段，都可以将获得的认识应用于自己的创业之中。