What are business models and why are they important?

Managing your project or your own business in a flexible manner and the ability to interact with the changing needs of our customers, which are often variable and diverse, but one of the most important lessons of the Corona period, especially for companies, is the need to be flexible and able to move with the needs of the market and the needs of their customers as well

It is imaginable and expected that during this last period and it is understandable the reason or importance behind > you, which is the increase in importance and the concept of value, which has become more important than ever before, besides Corona

Because the concept of value provided by the product, and therefore this importance extends as well to the concept of business models, which may be a large percentage of one of the subjects that you will study during your Master’s and Ph.D. studies in business administration, and we decided to write an article on business models, their importance, and benefits And other important information about them and examples of successful business models

1) What are business models?

We begin first by defining what a business model is before addressing its importance and the most important information about it. According to Wikipedia , a business model is what describes or defines a company’s approach to creating, transforming, and offering specific value through its products and services.

One of the other definitions provided by Harvard University,   which he shares in a book by Michael Lewis, The new thing, which defines a business model as representing the plans of a company or organization to create opportunities for profit and income generation. However, it is worth noting that the concept of a business model differs from company to another and from place to place

2) History of the business model?

The date of the first birth of the concept of the business model, on which many economic giants based their successes and achievements remains undetermined, but the concept came as a result of the thinking and deposition of the businessman, the Swiss thinker Alexander Osterwalder and his partner Yves Seigneur, who together developed and revised the concept and experiment and Creativity in the concept of business models and other practical applications of the concept

3) The importance of business models

Understanding the business model as a concept undoubtedly has benefits related to the professional scope and other benefits on the personal level. The first reason that your company should have a clear and explicit business model, even if they work remotely, is what you give it from an overview of the company as a whole and about the various necessary and important data in the field of business and with regard to your customers as well

Another benefit of the business model is that it comes with a set of useful and important tools for your business that will give you a brief and summarized overview of the various elements and aspects of the company. One of the things that counts in favor of the business model concept is that this strategy and concept is used by the largest companies in the world Mastercard, General Electric, Nestle, Apple and other huge companies 

4) Basic elements of a business model

The business model consists of three main parts and nine partial parts which are value proposition, customers, customer relationships, revenue streams, cost structure, key activities, key partners and key resources, which represent the process of building the process of creating this product. 

Customer Segment

This part is related to the current customers or customers of the company and one of the best ways to divide your customers into different groups, which are divided according to the common world between them and non-essential differences in the same group. The prospects you want to reach

Value Added

Added value is the meaning or purpose in which the product or service is used, which may be primarily financial, functional or social

Channels 

This part represents the various ways and means through which the company delivers that added value and its advertising messages to its current and potential customers.

 Relationship with clients

This section is related to the long-term relationship that the company establishes with its customers and their efforts to achieve the loyalty of its customers.

 revenue streams

This section represents the various sources of profit and income of the company and the means by which it brings money to the company and generates income

Main sources, activities and resources

These three concepts do not differ much in terms of the general concept. The main resources are those resources that are used in the process of making products and providing services, and the sources are those sources from which the customer derives the added value that the company or body that delivers them aims to

Cost Structure 

This section relates to the costing structure and sources of the different costs of the company or the production process, which vary and may increase or decrease according to the design of the business model. 

5) Success stories of business model concept

Now that we know what the business model is and its importance, it is time to give some practical examples and the different success stories resulting from the application of this concept. It suffices here to mention two companies that have implemented this concept and the success it has entailed for you, namely Airbnb and Ali Baba.

  In the end, the business model and the correct application of its principles have led to the success of many companies and still are today. We hope that the article has benefited you and introduced you to more about the business model and its various element