Business models

Question 1

What are business models?

Answer 1

a roadmap that helps entrepreneurs to better understand how the pieces of their business fit together in relation to what they are doing, how they are doing it, for whom, and why

Question 2

What are the for things that a business is not able to survive with?

Answer 2

Customers, offering, infrastructure and financial viability.

Question 3

What are infrastructure and financial viabiltiy?

Answer 3

Infrastructure = key resources that a business must have to drive the value proposition
Financial Viability = revenue and cost structures a business needs to meet its operating expenses and financial obligations

Question 4

Define the components of business model (Value Proposition, Cost Structure, Key metrics)

Answer 4

Value Proposition = explanation of the uniqueness of a company’s offering suggesting why a customer should choose your company over the competition
Cost Structure = all the expenses required to run the company and how those costs impact pricing
Key Metrics = data that show how the company measures success by tracking its overall performance

Question 5

Define organizational structure and its elements

Answer 5

Organisational structure = a system that determines the flow of work and outlines how tasks are directed to achieve organisational goals
* Communication
* Responsibilities
* Reporting relationships
* Successful completion of tasks

Question 6

Organizational structure depends on

Answer 6

• size of company
• degree of specialization for a particular job
• number of people who report to an individual manager
• culture & purpose

Question 7

Define the terms (Distributor, Retailer, Aggregator, Advertising)

Answer 7

1. Distributor = buyer of products from manufacturers and reseller to retailers or the public
2. Retailer = business that sells products directly to the public either from a store or a website
3. Aggregator = company connects vendors and buyers on the same platform and sells its services under its own brand
4. Advertising = revenue gained through advertising products and services

Question 8

Define the terms (Data licensing, SaaS, Manufacture, Utility and usage)

Answer 8

5. Data licensing/selling = revenue by selling or licensing high-quality, exclusive, valuable information to other parties
6. Software as a Service (SaaS) = companies offer their applications, software, and platforms to customers over the internet
7. Manufacturer = utilizes raw materials or prefabricate components to create a product to sell
8. Utility and usage = charges customers fees based on how often goods or services are used

Question 9

Define the terms ( Professional business model, Licensing, Freemium, PaaS)

Answer 9

8. Professional business model = professional services on a time and materials contract
9. Licensing = giving permission to other parties to use protected intellectual property (copyrights, patents, and trademarks) in exchange for fees
10. Freemium = business model that involves mixing free (mainly web-based) basic services with premium or upgraded services
11. Product as a Service (PaaS) = model focuses on outcomes instead of the product itself

Question 10

Define the terms (sales channels, revenue model, cost structure, key partners, key metrics)

Answer 10

Sales Channels = ways in which company reaches its customers
Revenue Model = way in which the company generates revenue and earns a profit
Cost Structure = all the expenses required to run the company and how those costs impact pricing
Key Partners = suppliers, distributors, and other business associates
Key Metrics = data that show how the company measures success by tracking its overall performance