Found in the tubes

Business model

A business model consists of four interdependent elements that create and deliver value.

1) The customer value proposition, an offering that helps customers do an important job more effectively, conveniently, or affordably than the alternatives.

2) The profit formula, made up of a revenue model and a cost structure that specify how the company generates profit and the cash required to sustain operations. 

3) The resources – such as employees, customers, technology, products, facilities, and cash – companies use to deliver the customer value proposition. 

4) Processes such as manufacturing, R&D, budgeting, and sales.

“Reinventing Your Business Model,” HBR December 2008.