Understanding Business Models

This essay delves into the concept of business models, explaining their significance in profit maximization, customer relationship building, and problem-solving. It examines seven archetypes of business models and illustrates how they contribute to a company's success through examples like Google. The essay emphasizes the dynamic nature of business models and their adaptability to technological advancements and market changes.

Running head: BUSINESS INNOVATION 1
Essay Transcription: Innovation and Sustainable Business Development
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BUSINESS INNOVATION 2
A business model enhances profit maximization by an organization in all operational
departments. In a nutshell, a business model explains the approaches used by an organization
when running its operations. Under this essay, the business model shows the graphical
representation of the core business functions, financial structures, and the relationship
between each activity to the other (Itami & Nishino, 2010). The business model has been used
to show how companies generate revenues and create towards enhancing profitability. The
best marketing strategies are also displayed out by the corporate model in an aim to
understand target market needs and demands.
The business model is used in establishing the right relationship between a business
and its clients as well as creating the best communication and distribution channels to meet
customers demands. The value proposition, revenue streams, cost structures, and leading
business partners are quickly shown with the use of business models (Zott, Amit, & Massa,
2011). Business model archetypes elaborate the different types of business models either
partially or entirely, and this creates a practical approach to strengthening the importance of
business model concepts in a company. Also, a business model shows the economic
dimensions, innovation creation processes, and value creation approaches used by a
corporation for optimality.
In the essay, seven archetypes employed in the demonstration of business relation
behavior are explained. Various prototypes such as e-commerce create a conducive
environment for the creation of a valuable trade model. E-business relies on the business
model of an activity system and cost revenues architecture that describes the direction upon
which the company is taking (Itami & Nishino, 2010). Conceptualization of business models
is made possible in a framework that is more empirical and suitable to all key stakeholders of

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a company. This has also been discussed in the essay and proves that business model plays a
critical role in business conceptualization.
Also discussed in the article, is the use of business models in solving both the static
and dynamic problems. This is justifiable since business models assist employees in the
splitting or breaking down of complex dynamic and static problems that a company faces. The
breakdown of complex issues helps in the proper understanding and analysis of an issue by a
company and thus leading to the generation of the best resolutions that address such issues
(Zott, Amit, & Massa, 2011). Given that change is inevitable, there are dynamic changes that
face an organization such as technological advancements.
The essay explains that a business system is made up of a learning and delivery system
whose conceptualization requires the use of business models. Companies use learning curve
in the study of the right resources needed to complete a given project in a set timeline. The
decision makes on the learning curve disparities to understand the direction upon which the
company is taking to come up with control actions (Fielt, 2013). Business models form cost
and revenue models that help businesses in understanding the market characteristics. The
good example used in this case is Google.
In the essay, it will be seen that business model demonstrates a logical value or an
organization and this enhances the ability to attract and retain customers. With the increased
rate of advanced technologies, change is inevitable. The business context is formed by
customers, the market, and the relevant IT resources (Chesbrough, 2010). All these parties
create organizational change, and this has been discussed as the main center to business
models being called for. Google company has been used as a relevant example that relies on
the use of trade models in monitoring profitability, costing activities, and solving dynamic and
static problems.

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References
Chesbrough, H. (2010). Business Model Innovation: Opportunities and Barriers. Long Range
Planning, 43(2-3), 354- 363.
Fielt, E. (2013). Conceptualising business models: Definitions, frameworks, and
classifications. Journal of Business Models, 1(1), 85.
Itami, H., & Nishino, K. (2010). Killing two birds with one stone: profit for now and learning
for the future. Long Range Planning, 43(2), 364-369.
Zott, C. Amit, R. & Massa, L. (2011). The Business Model: Recent Developments and Future
Research. Journal of Management.