A business model is the conceptual structure supporting the viability of a business, including its purpose, its goals and its ongoing plans for achieving them. At its simplest, a business model is a specification describing how an organization fulfills its purpose.
It is used for a broad range of informal and formal descriptions to represent core aspects of a business, including purpose, business process, target customers, offerings, strategies, infrastructure, organizational structures, sourcing, trading practices, and operational processes and policies including culture.
Business models are also used to describe and classify businesses, especially in an entrepreneurial setting, but they are also used by managers inside companies to explore possibilities for future development.
Types of business model
Manufacturer
A manufacturer takes raw materials and creates a product, or assembles pre-made components into a product (E.g car manufacturers). A manufacturer may sell its products directly to its customers, or it can outsource sales to another company.
Distributor
A distributor is any business that purchases products directly from a manufacturer for resale either to retail outlets, or directly to the public.
Retailer
A retailer purchases product from a distributor or wholesaler, and then sells those products to the public.
Franchise
A franchise can be a manufacturer, distributor or retailer, depending on what type of franchise you purchase.
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