Business Model

A Business Model refers to the strategic framework and approach that a business adopts to generate revenue, which is important for eBusinesses to create a sustainable and profitable model.

Examples of applications

The application of a Business Model involves various components and strategies that work together to generate revenue and drive growth. Some common elements and examples of application include:

  1. Value Proposition: A Business Model starts with a clear understanding of the value proposition, which is the unique value or benefits that a business offers to its customers. This could be in the form of innovative products, superior customer service, convenience, or cost savings.
  2. Revenue Streams: A key aspect of a Business Model is identifying and establishing multiple revenue streams. This could include revenue from product sales, subscription fees, licensing, advertising, data monetisation, or partnerships.
  3. Customer Segments: A Business Model defines the target customer segments that the eBusiness aims to serve. This involves understanding the specific needs, preferences, and behaviours of the target audience and tailoring products or services accordingly.
  4. Channels: An eBusiness needs to define the channels through which it reaches and interacts with its customers. These channels can include online platforms, social media, mobile applications, e-commerce websites, or physical stores.
  5. Cost Structure: A Business Model outlines the cost structure of the eBusiness, including the expenses incurred in operations, marketing, technology infrastructure, employee salaries, logistics, and customer acquisition. Balancing costs and revenue streams is crucial for profitability.


Benefits of having a well-defined and effective Business Model for eBusinesses include:

  1. Revenue Generation: A sound Business Model enables eBusinesses to identify and capitalise on revenue opportunities, maximising the potential for income generation. By understanding their revenue streams and pricing strategies, eBusinesses can optimise profitability.
  2. Value Creation: A Business Model helps eBusinesses create and deliver value to their customers. By aligning their products or services with customer needs and preferences, eBusinesses can build strong customer relationships and loyalty.
  3. Scalability and Growth: An effective Business Model provides a scalable framework that allows eBusinesses to expand their operations and reach a wider customer base. This scalability is essential for driving growth and seizing new market opportunities.
  4. Competitive Advantage: A well-defined Business Model can give eBusinesses a competitive edge by differentiating them from competitors. By offering unique value propositions, innovative pricing structures, or superior customer experiences, eBusinesses can stand out in the market.
  5. Sustainability: A robust Business Model ensures the long-term sustainability of eBusinesses. By managing costs, diversifying revenue streams, and adapting to market changes, eBusinesses can navigate challenges and maintain profitability over time.

In summary, a Business Model serves as the strategic blueprint for eBusinesses to generate revenue and deliver value to customers. By defining their value propositions, revenue streams, target customer segments, channels, and cost structures, eBusinesses can create a sustainable and profitable model. This, in turn, enables revenue generation, value creation, scalability, competitive advantage, and long-term sustainability in the dynamic digital marketplace.

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