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Business Model Design

Business model must have the following two characteristics:
(1) The business model is a holistic and systematic concept, not just a single component. Such as Revenue model (advertising income, registration fees, service fees), providing value to customers (competing in price, competing in quality), organizational structure (self-contained business units, integrated network capabilities), etc.
(2) There must be an intrinsic link between the components of the business model. This internal link connects the various components organically so that they support each other and work together to form a virtuous circle.
 
Based on the above understanding, business models can be divided into two categories:
(1) Operational Business Model. Focusing on solving the interaction between the company and the environment, including the interaction with the industry value chain. The operational business model creates the company's core strengths, capabilities, relationships, and knowledge, and mainly includes the following major aspects.
Industrial value chain positioning: What kind of industrial chain is the company in, what kind of position is it in this chain, and how should the company combine its own resource conditions and development strategy?
Profit model design (sources of income, income distribution): Where does the company derive its income from, and what kind of forms it receives, which forms and proportions of these revenues are allocated in the industry chain, and does the company have the right to speak in this distribution?

(2) Strategic business model. The strategic business model extends and utilizes operational business models. It should be said that the strategic business model involves all aspects of business production and management.
Ø Business model: What kind of value and benefits companies provide to customers, including brands and products.
Ø Channel model: How enterprises deliver business and value to customers, including channel multiplication, channel concentration/compression, etc.
Ø Organizational model: How companies establish advanced management and control models, such as establishing a customer-oriented organizational structure, and building digital organizations through enterprise information systems.
 
The business model can also be divided into:
Ø Sales model - operating model - capital model, the core is the effective integration of resources.
Ø Sales model refers to the product or service sales.
Ø Operation model: This refers specifically to the combination of various elements such as people, finances, materials, and information within the company. This is the core and the most basic embodiment of the business model. 
Ø Capital model: Mainly refers to the way companies obtain capital and the way capital operates. This is the supporting system of the business model.

Business model design elements
(1) Profit
(2) Self-protection
(3) Self-starting
(4) Adjustable
(5) Financial exit strategy


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