L1 : Introduction to Business Models Flashcards
business def
any profit-seeking organization that provides goods and/or services designed to satisfy the customers’ needs
business key aspects
- tend to transform lower value input into higher value products, to add value => to gain, maximize profit by attracting customers
- often in an ecosystem, in chain
added value
what you can get more to the consumer
= the additional features or economic value that a company adds to its products and services before offering them to customers
revenue def + link with business model
- money that a company brings in through the sale of goods and services
- business model describes how the company intends to generate it
profit : def + calculation
money left over after all the costs involved in doing business have been deducted from the revenue
= Revenue - Costs
competitive advantage
= some aspects of a product or company that makes it more appealing to its target customers
in order to achieve profits
Non-profit organization
provides goods and services without wanting to gain profit
- must be very efficient in running its business and operate effectively to achieve its goals
Major types of businesses
- Goods-producing business
- Service business
Good-producing business
capital-intensive : resources used is more equipment than labor
create value by making “things”
Eg: manufacturing
service business
labor-intensive
create value by performing activities that deliver some benefit to customers
in developed countries, this sector accounts for 75% of a nation’s economic output
Eg: finance, entertainment
companies combining the two types
more profitable and have more chance to survive in the long run
Risk and Reward + Moral Hazard
each company subject to risks while trying achieving its goals
Moral
