Getting Down to Business – The “Business Model” That Is!
There is no strong consensus over what a business model is or isn’t. There have been a number of misconceptions about its key components and its power to create either an enduring organizational success story on the one hand such as Proctor and Gamble, or one that has to be rescued from bankruptcy such as General Motors.
Wikipedia’s business model definition is so bland as to be meaningless:
In theory and practice, the term business model is used for a broad range of informal and formal descriptions to represent core aspects of a business, including purpose, target customers, offerings, strategies, infrastructure, organizational structures, trading practices, and operational processes and policies. The literature has provided very diverse interpretations and definitions of a business model.
Let’s begin by asking why, in the diagram on the facing page, the business model is referred...