Definition of business model? 2. There are several ways to innovate business models.

Business model is the creativity of entrepreneurs, which comes from the richness and logic of opportunities and may eventually evolve into a business model. The logic of its formation is: opportunity is the possibility of conveying more clear market demand through creative resource combination, and it is an unclear market demand or an unused resource or ability. Simply put, the business model is the profit mode of the enterprise.

Traditional business model

Shop model

Generally speaking, the business model of service industry is more complicated than that of manufacturing and retail industry. The oldest and most basic business model is the "shopkeeper model", specifically, it is to open a shop where there are potential consumers and display their products or services.

A business model is a description of how an organization performs its functions and a summary of its main activities. It defines the company's customers, products and services. It also provides information about how companies are organized and how they generate revenue and profits. The business model, together with the strategy, dominates the company's main decisions. The business model also describes the company's products, services, customer markets and business processes.

Most business models rely on technology. Entrepreneurs on the Internet have invented many brand-new business models, relying entirely on existing and emerging technologies. Using technology, enterprises can reach more consumers with the least cost.

"bait and hook" mode

With the progress of the times, the business model has become more and more complicated. The "bait and hook" model-also known as the "razor and blade" model or the "bundled product" model-appeared in the early 20th century. In this mode, the price of basic products is extremely low, usually at a loss; Related consumables or services are very expensive. Such as razor (bait) and blade (hook), mobile phone (bait) and talk time (hook), printer (bait) and ink cartridge (hook), camera (bait) and photos (hook), and so on. Another interesting change of this model is that software developers distribute their text readers for free, but their text editors cost hundreds of dollars.

Other modes

In 1950s, McDonald's and Toyota started a new business model. The innovators in the 1960s were Wal-Mart and hypermarkets, which were supermarkets and warehouses. In 1970s, a new business model appeared in the operation of FedEx and Toys R Us toy stores. In the 1980s, it was Blockbuster, The Home Depot, Intel and Dell. . In the 1990s, it was Southwest Airlines, Netflix, Yi Bei, Amazon and Starbucks. The business model without careful consideration is a serious problem for many internet companies.

With the continuous development of science and technology, business models have diversified, and the free model of the Internet is a typical representative. Because there are too many emerging business models, I won't list them one by one.

Every innovation of business model can give the company a competitive advantage in a certain period of time. But with the change of time, the company must constantly reflect on its business design. As the value orientation (of consumers) shifts from one industry to another, enterprises must constantly change their business models. The success or failure of a company ultimately depends on whether its business design meets the priority needs of consumers.

The innovative way of business model is Internet transaction (e-commerce).