What is business model and how does internet/technology facilitates different business models?
"A business model describes the rationale of how an organization creates, delivers, and captures value, in economic, social, cultural or other contexts. The process of business model construction is part of business strategy."
Source: Business model - https://en.wikipedia.org
A business model includes nine basic building blocks, they are: customer segments, value proposition, channels, customer relationships, revenue streams, key resources, key activities, key partners, and cost structures.
Over the years, business model has evolved. Today, business model is heavily dependent on the use of technology. So, the type of business models depends on how technology is used by the organization. Some examples of business models are, bricks and clicks business model, cutting out the middleman model, direct sales model, franchise etc.
In today’s context, Technology has become an inseparable part of the business model. For example for a brick and click model, internet technology has made it possible to evolve into a click only model. Amazon has been using the click model, and various other organizations like, flipkart, foodmandu etc. are also adopting this model
Similarly, in cutting out the middleman model, through the use of internet and other communication technologies, the intermediaries in a supply chain can be reduced and companies can now deal with every customer directly. Similarly, in direct sales model, individual marketing to each individual has been made possible through internet.
Hence, the use of internet/technology facilitates different business models by developing new means of creating, delivering and capturing value to the consumers. Furthermore, the use of technology is very economical and so reduces cost structures. Also, organizations can maintain customer relationship through online social media.