Technology-Based Scalable Business Models: Dimensions and Challenges of a New Populist Business Model

2. Business Model

A business model is a set of business processes that converts inputs to outputs while generating returns to the investors (Hoddinott, 2007). A strong business model can sustain these returns to the investors over a longer period. Blank (2010) explains that a business model is the one that helps a company to create, deliver, and capture value. A business model is the plan or strategy of a company for making a profit which includes the company’s products and services, target market, and expenses (Kopp, 2019). It is nothing but a story that explains how an enterprise function and also answers the fundamental attributes of a business viz., how people make money in business, who is the customer of a business, what the customer value, how value could be delivered to customers at an appropriate cost etc. (Every new business model comes up either to meet an existing unmet need or to make, sell or distribute an already existing product in a better manner. The advent of personal computers and spreadsheets helped firms to model their businesses even before they were launched. However, to be successful, the assumptions used in the model must align with the real-world scenarios. While the business model tells how to do business, strategy is the one that helps the business to gain a competitive advantage (Magretta, 2002).