What is a profitability model?

Profitability model refers to the revenue structure and cost structure of an enterprise according to stakeholders and the corresponding target profit. Profitability model is a systematic method of identifying and managing the value of business elements and finding profit opportunities in them, i.e., exploring the sources of profit, production processes and output methods.

Profitability model is divided into spontaneous profitability model and conscious profitability model of two kinds, the former profitability model is the spontaneous formation of the enterprise on how to make profits, the future can be profitable lack of sober understanding of the enterprise, although the enterprise is profitable, but the profitability model is not clear and unclear, the profitability model has the characteristics of hidden, fuzzy, lack of flexibility; the latter, that is, conscious profitability model, is the enterprise by the The latter, also known as the conscious profit model, is the enterprise through the summary of the profitability of the practice, the profit model to consciously adjust and design, it has clarity, relevance, relative stability, environmental adaptability and flexibility of the characteristics.