What is a Business Model?

A business model is a strategic framework that outlines how a company creates, delivers, and captures value. It defines the mechanisms through which a business operates, generates revenue, and sustains profitability. This model typically includes key components such as the company's value proposition, revenue streams, customer segments, cost structure, and distribution channels.

Different companies adopt various business models based on their industry, market dynamics, and customer needs. For example, a subscription-based model (like Netflix) generates recurring revenue through periodic payments, while a marketplace model (like Airbnb) connects buyers and sellers, earning commission from transactions.

Ultimately, the right business model is essential for ensuring long-term sustainability, competitive advantage, and adaptability to changing market conditions.