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A Comprehensive List of Business Models To Accelerate You and Your Business

International MBA Institute™
01 June 2020

Business Model Business Innovation Checklist for Business Design

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 ModelHow Does it Work?Who Uses it?
Add-On (Upsell)Sell Extra Custom FeaturesRyanair
AffiliationUse Sellers for you to sell your productsAmazon
AikidoDisrupt against the proposition of competitionNintendo Wii
AuctionBidding, Reverse AuctionEbay
BarterSponsoring and Value ExchangeP&G to give away Pampers, Pepsi to import Vodka to export Cola
Cash MachineCollect Money from customers, but pay later to suppliersAmazon, Dell, Travel Checks
Cross SellingSell other products which can be relevant to customersShell, Tchibo
CrowdfundingCrowd invests for a sample productPebble, Music Record
CrowdsourcingCrowd thinks, delivers, choosesP&G Connect & Develop, Cisco
Customer LoyaltyLoyalty Card Programs to collect discount balanceAirlines, Advantage Card
DigitalisationPhysical Products and Offers become immaterialSpiegel Magazine
Direct SellingProducer directly faces and sells to customersTesla, Tupperware, Dell, Vorwerk
E-CommerceBusiness transactions and communications via ICTAmazon, Würth (intelligent box to give orders autonomously when the amount of supply goes low)
Experience SellingOffers exclusive and unique product and service experience combined with positive emotionsStarbucks, Nespresso, Ikea, Marlboro
FlatrateOffers unlimited use with the comfort to control pricesNetflix, Spotify, flat rate telecommunications subscriptions, all inclusive tourism offers
Fractionalized OwnershipCustomer owns a specific portion or usage rights of a productTimesharing holiday resorts, Netjets (network with 8000 airplanes), Sefage (Car Sharing Initiative established in 1948)
FranchisingFranchiser offers its business concept for expansion with the resources of franchisee whereas franchisee enjoys reduced risks and established brand and business processesMcDonald’s, Pizza Hut, Marriott, Starbucks
FreemiumFree basic version to wake the interest of customer and introduce the product, Paid advanced versions with full featuresSkype, Spotify, Mailchimp, LinkedIn, Dropbox
From Push-To-PullPut 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 wasteToyota, Zara, Geberit
Guaranteed AvailabilityProvider offers uninterrupted availability instead of ownership, Provider is responsible for achieving this including timely repair, replacement and maintenanceHilti, Fleet Management, Otis, IBM
Hidden RevenueOffers free or cheap service to customers, but generates revenue from adsFree newspapers, TV, Google
Ingredient BrandingCreating a brand for a component or a feature of a productIntel for processors, Shimano for bicycle components, Bosch vehicle components
IntegratorOffering supplies mostly by own means with minimal dependency on 3rd Party suppliersZara, Ford
Layer PlayerSpecialised products and services which usually operate in multiple industriesPaypal, TRUSTe, Dennemeyer, Outsourcing Providers
Leverage Customer DataImproved decision making and offering capabilities from the insights gained from raw customer rawGoogle, Amazon, Facebook, Twitter
LicenseFocusing and investing on the commercialisation of intellectual propertiesMickey Mouse, IBM, BASF, ARM Limited
Lock-InOffering products and services which are attached to intensive costs, time and learning if the customer wants to move to another providerSoftware, Operating Systems, Gillette, Nespresso, Innovative external interfaces of hardware and mobile devices
Long TailOffering a large portfolio of products, not only the ones most people buy, but also niche productsAmazon, Ebay, iTunes, Netflix
Make More Of ItOffering core competencies to others externallyPorsche Consulting, Porsche Engineering, Festo, AWS
Mass CustomisationCustomised Products but still in Mass Production, usually established with modular designs and componentsDell, Automobile Industry, Apple Watch with various bands, Levi’s, mymuesli
No FrillsCheapest prices by offering unusual, but still essential version of productsFord’s T-Modell, Southwest Airlines, Aldi, McFit, McDonald’s
Open Business ModelInvolving external business partners for open research, development and innovation without detailed planning, P&G’s Connect+Develop to build new product ideasEli Lilly to build InnoCentive to solve complex scientific problems, IBM’s investments on Linux
Open SourceProducts are built by community, Revenue doesn’t come directly from the product, but from the services around itMozilla, Red Hat, Wikipedia, Local Motors
OrchestratorCompany 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 providersNike, Bharti Airtel, Li & Fung
Pay Per UseCustomer is charged based on her effective use of services and productsPay-Per-View TV Offers, Pay-Per-Click Advertisement, Car2Go, Ally Financial’s Pay-Per-Risk Advertisement
Pay What You WantCustomer decides how much she wants to pay for a given service or productOne World Everybody Eats, Radiohead, Noisetrade, Humble Bundle
Peer-to-PeerCompany enables business transactions between private personseBay, Zopa, Airbnb, Uber, Upwork
Performance-based ContractingClient is charged based on the monetary benefit it received from the offer or based on successful delivery of complex/risky offersRolls-Royce airplane motors, BASF Coatings, Xerox
Razor and BladeBase component of the offer is either cheap or free of charge, but the complementary components to be able continue using the product is more expensiveLamp oils from Standard Oil Company, Gillette, Printer Inks, Nespresso
Rent Instead Of BuyCustomer rents the product instead of buying it which frees the customer to do capital intensive investments to use the productSaunders System, Xerox, CWS-boco
Revenue SharingStrategical partnership and collaboration to increase revenues in a win-win situationCDNow, iTunes, AppStore, Groupon, Consultancy Industry
Reverse EngineeringDetailed Analysis of competitor’s products, services and business models to exploit the gained knowhow for its own businessBrilliance China Auto, Software, War industry
Reverse InnovationInnovation and R&D are executed in developing countries to meet the extreme needs of developing countries, and then the offer is brought to developed countriesGeneral Electric, Dacia Logan, Nokia, Haier
Robin HoodEarn more from privileged customer segment, but supply more to unprivileged customer segment which may not otherwise afford the offerAravind Eye Care System, TOMS Shoes, One Laptop Per Child
Self-ServiceCustomer is actively involved in the delivery process of the offer, so thanks to the saved costs the company can further invest or reduce its pricesSupermarkets, restaurants, Ikea, Backwerk, Ibis Budget
Shop-in-ShopAs the name implies, this is about opening a business or a store (rent or franchise) inside another business or storeBosch, Tschibo, Amazon Marketplace
Solution ProviderOffering not only a product, but also a turn-key solution around customer’s problem, so the customer can focus on its own core businessHeidelberger Druckmaschinen, Würth, Tetra Pak, 3M Services, Geek-Squad
SubscriptionRecurring services or deliverables in regular time intervalsSalesforce, Blacksocks, Dollar Shave Club, Mailchimp, Entrepreneur Magazine
SupermarketOffers a large spectrum of product to fulfil many requirements of the customer at one placeToys"R"Us, Merrill Lynch, MediaMarkt, King Kullen Grocery Company
Target The PoorOffers are targeted to the bottom of income pyramid, they are usually designed to cover minimal, but still essential needs of customersHindistan Unilever, Grameen Bank, Tata Nano, Walmart
Trash-To-CashExploit recycled material to build new products with reduced costs, Give the customer good conscience to use your productFreitag lab. AG, Greenwire, Emeco
Two-Sided-MarketPlatform concept where the suppliers and customers are brought togetherDiners Club, Ebay, Amazon, Zappos, Groupon, Facebook, Google
Ultimate LuxeryOffers 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 pricesLamborghini, Jumeirah Group, Abbot Downing, Apple, Various watch producers
User DesignedGives consumers the ability and infrastructure to design, produce, sell and market their own custom productsSpreadshirt, Lego Factory, Ponoko, Dreamheels, Createmytattoo
White LabelOffers no-name Products to vendors without any branding, so the vendors define their branding and pricing, focuses mainly on production and distribution optimisationFoxconn, Richelieu Foods, Printing-In-A-Box

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