Are you good at business models?
Of course you are. We know all about business models, don’t we?
A lifetime as a consumer and almost a lifetime as a professional we all believe that we are well proficient in business models. We don’t hesitate more than a second to give our opinion if a business idea will work or not. And we are very generous to give our feedback how a company can perform better. But do we really have enough insights about business models?
We still receive significant number of questions from our community and from our humble students who ask for a second opinion about complementary business models to flourish their services and products. To properly answer this question we have made a research on business model innovation.
Guess how many different models we have revealed? 15? 30? No.
We have identified 55 business models for you.
The list below presents these business models with a short description and some example companies who have successfully exploited these business models. This article is not meant to be a comprehensive in-depth guide to introduce various different business models, but it intends to cover the surface of big picture for most common business models.
We also hope that this list serves you as a simple checklist the next time you establish, enhance or innovate a business model.
Let us know in the comments sections below which business models you find most attractive as a consumer and/or as a professional. If you have any questions or require further clarity, please drop a comment too.
|Business Model||How Does it Work?||Who Uses it?|
|Add-On (Upsell)||Sell Extra Custom Features||Ryanair|
|Affiliation||Use Sellers for you to sell your products||Amazon|
|Aikido||Disrupt against the proposition of competition||Nintendo Wii|
|Auction||Bidding, Reverse Auction||Ebay|
|Barter||Sponsoring and Value Exchange||P&G to give away Pampers, Pepsi to import Vodka to export Cola|
|Cash Machine||Collect Money from customers, but pay later to suppliers||Amazon, Dell, Travel Checks|
|Cross Selling||Sell other products which can be relevant to customers||Shell, Tchibo|
|Crowdfunding||Crowd invests for a sample product||Pebble, Music Record|
|Crowdsourcing||Crowd thinks, delivers, chooses||P&G Connect & Develop, Cisco|
|Customer Loyalty||Loyalty Card Programs to collect discount balance||Airlines, Advantage Card|
|Digitalisation||Physical Products and Offers become immaterial||Spiegel Magazine|
|Direct Selling||Producer directly faces and sells to customers||Tesla, Tupperware, Dell, Vorwerk|
|E-Commerce||Business transactions and communications via ICT||Amazon, Würth (intelligent box to give orders autonomously when the amount of supply goes low)|
|Experience Selling||Offers exclusive and unique product and service experience combined with positive emotions||Starbucks, Nespresso, Ikea, Marlboro|
|Flatrate||Offers unlimited use with the comfort to control prices||Netflix, Spotify, flat rate telecommunications subscriptions, all inclusive tourism offers|
|Fractionalized Ownership||Customer owns a specific portion or usage rights of a product||Timesharing holiday resorts, Netjets (network with 8000 airplanes), Sefage (Car Sharing Initiative established in 1948)|
|Franchising||Franchiser offers its business concept for expansion with the resources of franchisee whereas franchisee enjoys reduced risks and established brand and business processes||McDonald’s, Pizza Hut, Marriott, Starbucks|
|Freemium||Free basic version to wake the interest of customer and introduce the product, Paid advanced versions with full features||Skype, Spotify, Mailchimp, LinkedIn, Dropbox|
|From Push-To-Pull||Put customers as the central driving factor in every operation and decision, Produce only what the customer is ready to buy and do it as efficient as it is possible without waste||Toyota, Zara, Geberit|
|Guaranteed Availability||Provider offers uninterrupted availability instead of ownership, Provider is responsible for achieving this including timely repair, replacement and maintenance||Hilti, Fleet Management, Otis, IBM|
|Hidden Revenue||Offers free or cheap service to customers, but generates revenue from ads||Free newspapers, TV, Google|
|Ingredient Branding||Creating a brand for a component or a feature of a product||Intel for processors, Shimano for bicycle components, Bosch vehicle components|
|Integrator||Offering supplies mostly by own means with minimal dependency on 3rd Party suppliers||Zara, Ford|
|Layer Player||Specialised products and services which usually operate in multiple industries||Paypal, TRUSTe, Dennemeyer, Outsourcing Providers|
|Leverage Customer Data||Improved decision making and offering capabilities from the insights gained from raw customer raw||Google, Amazon, Facebook, Twitter|
|License||Focusing and investing on the commercialisation of intellectual properties||Mickey Mouse, IBM, BASF, ARM Limited|
|Lock-In||Offering products and services which are attached to intensive costs, time and learning if the customer wants to move to another provider||Software, Operating Systems, Gillette, Nespresso, Innovative external interfaces of hardware and mobile devices|
|Long Tail||Offering a large portfolio of products, not only the ones most people buy, but also niche products||Amazon, Ebay, iTunes, Netflix|
|Make More Of It||Offering core competencies to others externally||Porsche Consulting, Porsche Engineering, Festo, AWS|
|Mass Customisation||Customised Products but still in Mass Production, usually established with modular designs and components||Dell, Automobile Industry, Apple Watch with various bands, Levi’s, mymuesli|
|No Frills||Cheapest prices by offering unusual, but still essential version of products||Ford’s T-Modell, Southwest Airlines, Aldi, McFit, McDonald’s|
|Open Business Model||Involving external business partners for open research, development and innovation without detailed planning, P&G’s Connect+Develop to build new product ideas||Eli Lilly to build InnoCentive to solve complex scientific problems, IBM’s investments on Linux|
|Open Source||Products are built by community, Revenue doesn’t come directly from the product, but from the services around it||Mozilla, Red Hat, Wikipedia, Local Motors|
|Orchestrator||Company focuses only on its core competence, everything else is provided by third parties, but the company is also excelled to administer and integrate the activities of third party providers||Nike, Bharti Airtel, Li & Fung|
|Pay Per Use||Customer is charged based on her effective use of services and products||Pay-Per-View TV Offers, Pay-Per-Click Advertisement, Car2Go, Ally Financial’s Pay-Per-Risk Advertisement|
|Pay What You Want||Customer decides how much she wants to pay for a given service or product||One World Everybody Eats, Radiohead, Noisetrade, Humble Bundle|
|Peer-to-Peer||Company enables business transactions between private persons||eBay, Zopa, Airbnb, Uber, Upwork|
|Performance-based Contracting||Client is charged based on the monetary benefit it received from the offer or based on successful delivery of complex/risky offers||Rolls-Royce airplane motors, BASF Coatings, Xerox|
|Razor and Blade||Base component of the offer is either cheap or free of charge, but the complementary components to be able continue using the product is more expensive||Lamp oils from Standard Oil Company, Gillette, Printer Inks, Nespresso|
|Rent Instead Of Buy||Customer rents the product instead of buying it which frees the customer to do capital intensive investments to use the product||Saunders System, Xerox, CWS-boco|
|Revenue Sharing||Strategical partnership and collaboration to increase revenues in a win-win situation||CDNow, iTunes, AppStore, Groupon, Consultancy Industry|
|Reverse Engineering||Detailed Analysis of competitor’s products, services and business models to exploit the gained knowhow for its own business||Brilliance China Auto, Software, War industry|
|Reverse Innovation||Innovation and R&D are executed in developing countries to meet the extreme needs of developing countries, and then the offer is brought to developed countries||General Electric, Dacia Logan, Nokia, Haier|
|Robin Hood||Earn more from privileged customer segment, but supply more to unprivileged customer segment which may not otherwise afford the offer||Aravind Eye Care System, TOMS Shoes, One Laptop Per Child|
|Self-Service||Customer is actively involved in the delivery process of the offer, so thanks to the saved costs the company can further invest or reduce its prices||Supermarkets, restaurants, Ikea, Backwerk, Ibis Budget|
|Shop-in-Shop||As the name implies, this is about opening a business or a store (rent or franchise) inside another business or store||Bosch, Tschibo, Amazon Marketplace|
|Solution Provider||Offering not only a product, but also a turn-key solution around customer’s problem, so the customer can focus on its own core business||Heidelberger Druckmaschinen, Würth, Tetra Pak, 3M Services, Geek-Squad|
|Subscription||Recurring services or deliverables in regular time intervals||Salesforce, Blacksocks, Dollar Shave Club, Mailchimp, Entrepreneur Magazine|
|Supermarket||Offers a large spectrum of product to fulfil many requirements of the customer at one place||Toys"R"Us, Merrill Lynch, MediaMarkt, King Kullen Grocery Company|
|Target The Poor||Offers are targeted to the bottom of income pyramid, they are usually designed to cover minimal, but still essential needs of customers||Hindistan Unilever, Grameen Bank, Tata Nano, Walmart|
|Trash-To-Cash||Exploit recycled material to build new products with reduced costs, Give the customer good conscience to use your product||Freitag lab. AG, Greenwire, Emeco|
|Two-Sided-Market||Platform concept where the suppliers and customers are brought together||Diners Club, Ebay, Amazon, Zappos, Groupon, Facebook, Google|
|Ultimate Luxery||Offers are targeted to the top of income pyramid, they are usually unique and suit for self-realisation needs of customers, Focus on branding, events, highest quality standards associated with large investments which are covered with high margin of sales prices||Lamborghini, Jumeirah Group, Abbot Downing, Apple, Various watch producers|
|User Designed||Gives consumers the ability and infrastructure to design, produce, sell and market their own custom products||Spreadshirt, Lego Factory, Ponoko, Dreamheels, Createmytattoo|
|White Label||Offers no-name Products to vendors without any branding, so the vendors define their branding and pricing, focuses mainly on production and distribution optimisation||Foxconn, Richelieu Foods, Printing-In-A-Box|
Hi there! It is great to meet you.
My name is Jenny Evans. I am the chief operations lead here at International MBA Institute. It is my duty and pleasure to make sure that we serve you as best as we can on your continuous learning journey.
International MBA Institute make it possible to get high quality education everywhere around the world. Our differentiating power and momentum come from our massive community supported by a large group of academicians, executives and organisations.
Unlike other providers in education industry, our goal is not only to serve a selected elite group.
We provide our services in accessible and inclusive manners, so we can solve everyone’s problems in education. Everyone who believes knowhow and competence are our only remaining securities. Today and in the future.
We have served approximately one million professionals and students until today.
Every single day we receive success stories from our students who found new jobs or secured promotions. Beside their focus and willingness to succeed, these women and men demonstrate confidence with skills and knowhow we have been helping them to learn. So they can get great results from their job interviews, build outstanding solutions and serve their leadership skills in their professional roles.
Why don’t you become one of these successful individuals who drive real value to their employers and clients? We want you to become one of them and we want you to succeed!
Join 1M+ Professionals in MBA Institute Community. Get info packs, practical tactics, exciting surprises and more, so you can GROW further in your CAREER. By providing outstanding services relevant to your employers and clients.
And yes, there are no shortcuts for success! :) But there are techniques which make the process fun and efficient..
We will talk about them a lot. For now stay tuned!
As you have (patiently) read me until this point, you have already proved to me that you are awesome! To say thanks for your interest so far, I will free of charge send you 8 MBA books which have a retail value of more than USD 300. Make sure you check them out. I hope you will like your books and we can manage to help you out to learn a thing or two.
International MBA Institute is an independent Institute which helps Organizations and Professionals get accredited with worldwide renowned and recognized MBA Degrees and prove their competence in MBA domains. We empower Professionals worldwide to build their Careers, and Companies to create and sell their Outstanding Products and Services.
Your MBA Leadership, MBA Management, MBA Sales, MBA Human Resources, MBA Finance, MBA Marketing, MBA Business Strategy and MBA Recruitment Degrees have proven their worldwide Acceptance and Reputation by being the choice of more than 987’000 MBA Professionals in 143 Countries.
MBA is a set of open Business Execution, Product, Service Delivery and Leadership Frameworks, and yet before International MBA Institute was established, there used to be no reasonable way for MBA Practitioners like yourself to obtain your Accredited MBA Degrees and to prove your competence in MBA domains. MBA Practitioners had to pay expensive fees for the one way profit-driven MBA Degrees of other MBA Education Providers.
International MBA Institute aims to remove these barriers set in front of the MBA Professionals in developed and emerging markets by saving them from paying unreasonable fees for MBA Classroom Trainings and MBA Degree Examinations before they accredited their knowhow in MBA Domains. Moreover, please feel free to check out "What makes Your MBA Degrees Best of the Industry?" section on our home page to read why we perform and serve you far more better than our competition.
International MBA Institute provides 8 major Online MBA Degrees which are designed by our consortium of renowned Business and People Leaders, Coaches, Mentors, Experts and Authorities from all major Industries. Let's check out About Us page to find out more about your worldwide renowned and recognized MBA Degrees.
Hi there, Have you ever wondered why only too few people are successful? Many people work hard, they constantly chase for opportunities but still they have to spend and finish their careers with unsubstantial results. This is sad, so is the truth.
Like unsuccessful people, successful people chase for opportunities too, but what makes success scarce whereas mediocrity is abundant in professional careers?Join This Discussion >>
Hi, it's Jenny! I'm so excited that you're here!
My name is Jenny Evans. I'm the chief operations lead here at International MBA Institute™. It's my duty and pleasure to make sure that we serve you as best as we can on your continuous learning journey.
International MBA Institute™ make it possible to get high quality education everywhere around the world.Join This Discussion >>
Hi there, I hope I found you well and healthy. I am writing you about a subject that I was thinking since long time to write about it. Today is the day. :)
Are you looking for PDUs (Professional Development Units) to get or maintain a degree?
You shouldn't. Here is why? Because PDU is a byproduct of Lock-In Business Model, and this business model badly takes advantage of students.Join This Discussion >>
Hi, How are you doing? Today I wanted to share Part 1 of 2 of an experiment I did some years ago.
The results were pretty interesting. I'm going to share the whole process with you. But use this with respect to others. Reread what I wrote in the previous posts about caring for your people and helping them.Join This Discussion >>
Hi, it's Jenny!
Let's see if you guessed correctly. The end result of the experiment I mentioned at Part 1 of 2 was Consistency.
And when I leveraged that consistency, I was able to get more support from these leaders and managers than I ever had up until that point. Here’s why.Join This Discussion >>
Hi there, Last summer I was in Seattle.
I used this occasion to meet up with a few dozens of our alumni students in this region.
Amit, a 23 years old tall guy who studied his college in USA and made his MBA-CFP degree online with us, mentioned to me about an experiment he'd recently conducted.Join This Discussion >>
Hi there, I love that you're here because one of my favourite things to do is take a smart professional and lifetime student like yourself and make you become even more successful.
It's something that I practice in my own career, of course, but I love helping others too.Join This Discussion >>
You are moving from the world of fixed nouns towards a world of fluid verbs. Within the next years you will continue taking solid things -such as a car or a jacket- and turning them into intangible verbs. Your products are becoming your services and processes. With high doses of built-in technology, your car is becoming a service, continuously updated set of benefits adapting to your own usage and feedback, fierce competition and global innovation.Join This Discussion >>
Dear Friends and Colleagues,
For the last few weeks we worked hard for you to make this revamp happen. If you are curious to know how International MBA Institute uses Agile Scrum Delivery Techniques, here are two simple facts for you which may be also a benchmark for your own agile delivery projects.Join This Discussion >>