Wesley Shu's Library tagged business_model →  View Popular

The functions of a business model are to:

* articulate the value proposition, i.e. the value created for users by the offering based on the technology;

* identify a market segment, i.e. the users to whom the technology is useful and for what purpose, and specify the revenue generation mechanism(s) for the firm;

* define the structure of the value chain within the firm required to create and distribute the offering, and determine the complementary assets needed to support the firm's position in this chain;

* estimate the cost structure and profit potential of producing the offering, given the value proposition and value chain structure chosen;

* describe the position of the firm within the value network linking suppliers and customers, including identification of potential complementors and competitors;

* formulate the competitive strategy by which the innovating firm will gain and hold advantage over rivals.

These six attributes collectively serve additional functions, namely to justify the financial capital needed to realize the model and to define a path to scale up the business.