30.1: Business Models Flashcards
What are the two main distribution channels?
Omnichannel;
Direct sales.
What is the Omnichannel strategy?
A distribution strategy that integrates both digital and physical sales channels, so that both can be used together to complete a sale.
What are the 3 main price discrimination strategies?
Tiered pricing charges - different customers, different prices.
Dynamic pricing - different prices and at different times.
Auction/reverse auction models - establish prices through bidding.
What are the 3 main pricing for multiple product strategies?
Bundling;
Razors and blades pricing;
Optional product pricing.
What are the 3 main pricing for rapid growth strategies?
Penetration pricing - sacrificing margin in order to build market share.
Freemium charging - certain level of functionality free of charge.
Hidden revenue business models - google example selling data.
Business model variations include?
Private label or “contract” manufacturers;
Licensing arrangements;
Value added resellers;
Franchise models.
What is the execution risk? Operational
Arises from the possibility that management will be unable to do what is needed to deliver the expected results.
Total leverage = …
Total leverage = Operating leverage × Financial leverage.
Operating leverage = …
Operating leverage = Contribution/EBIT.
Financial leverage = …
Financial leverage = EBIT/EBT.
