Browse Definitions :
Definition

business model

Contributor(s): Ivy Wigmore

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. All business processes and policies are part of that model. According to management expert Peter Drucker, a business model answers the following questions: Who is your customer, what does the customer value, and how do you deliver value at an appropriate cost?

A business model is similar to a business plan in its makeup and content. However, a business plan specifies all the elements required to demonstrate the feasibility of a prospective business, while a business model demonstrates the elements that make an existing business work successfully.  

The benefits of business model documentation include maintaining a focus on corporate goals, reviewing operational practices and ensuring that the two are congruent. A representation of a company's business model can be incorporated into public relations (PR) material and is useful to share with customers and partners. A mission statement or vision statement may be included in a business model.

Traditionally, financial goals have been the main focus of such models but business sustainability and corporate culture have become increasingly integral to business plans in recent years.

This was last updated in December 2013

Continue Reading About business model

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

File Extensions and File Formats

SearchCompliance

  • California Consumer Privacy Act (CCPA)

    The California Consumer Privacy Act (CCPA) is legislation in the state of California that supports an individual's right to ...

  • compliance audit

    A compliance audit is a comprehensive review of an organization's adherence to regulatory guidelines.

  • regulatory compliance

    Regulatory compliance is an organization's adherence to laws, regulations, guidelines and specifications relevant to its business...

SearchSecurity

  • privilege creep

    Privilege creep is the gradual accumulation of access rights beyond what an individual needs to do his job. In IT, a privilege is...

  • BlueKeep (CVE-2019-0708)

    BlueKeep (CVE-2019-0708) is a vulnerability in the Remote Desktop (RDP) protocol that affects Windows 7, Windows XP, Server 2003 ...

  • endpoint detection and response (EDR)

    Endpoint detection and response (EDR) is a category of tools and technology used for protecting computer hardware devices–called ...

SearchHealthIT

SearchDisasterRecovery

  • disaster recovery team

    A disaster recovery team is a group of individuals focused on planning, implementing, maintaining, auditing and testing an ...

  • cloud insurance

    Cloud insurance is any type of financial or data protection obtained by a cloud service provider. 

  • business continuity software

    Business continuity software is an application or suite designed to make business continuity planning/business continuity ...

SearchStorage

  • Hadoop as a service (HaaS)

    Hadoop as a service (HaaS), also known as Hadoop in the cloud, is a big data analytics framework that stores and analyzes data in...

  • blockchain storage

    Blockchain storage is a way of saving data in a decentralized network which utilizes the unused hard disk space of users across ...

  • disk mirroring (RAID 1)

    RAID 1 is one of the most common RAID levels and the most reliable. Data is written to two places simultaneously, so if one disk ...

Close