Business model is a process that describes how businesses run from the scratch to the end. It demonstrates the activities from the start till the end. It tells how an organization creates, delivers and further captures the value. The process in which business model is design is included as a part of business strategy. When business is formed or established, it first tells us about its business model with the help of which we as a consumer can know how this business will work and will gain the maximum potential. If business model is strong, it can achieve maximum amount of profits and can be the best one. The value that actually describes the business model is its practices and techniques with the help of which it actually delivers to its customers.
Business model is thus known as a base of any business on which whole business depends. It tells the employees how to work, how to start and how to reach at the maximum point, on the other side, it tells its customers / consumers too who it will deliver the value. It is a part of a business that describes and classifies the business. The top executives and the heads are responsible for setting up the business model. In order to gain maximum amount of profits, business model should be strong enough that can challenge and can also compete in tough time.
Years ago, business model tend to be sophisticated and difficult to understand. But now a days businesses are trying to develop their business model in such a way that can easily take them to the final end without facing any difficulties and on the other side, consumers / customers will also feel comfortable and easy while understanding the core idea of any business. Business models are now formed in different and unique ways in order to attract the consumers / customers and to make them the regular users. If a business model is easy to grasp, further the business will gain maximum profits.
Yogesh Malhotra (2001), “Knowledge management and business model innovation”, Idea Group Inc (IGI), pg 453