With the rising trend of entrepreneurship, various companies are now adopting new Business Strategies to ensure incredible growth.
A business model refers to the way a company delivers value to its customers. A lot of companies stick to different models based on the target market after conducting market research.
The model includes all the decisions which revolve around pricing, selling strategy, services, and the distribution process.
The following are the major models being employed:
- Freemium Model: This model works on the concept of providing free membership for a specified period of time and charging some amount after that. This allows the customer to get an experience of the product prior to paying for the facilities.
- Subscription Model: This model involves subscriptions on a weekly, monthly, or yearly basis.
- Fee-for-Service Model: Such a model is based on selling services instead of selling products where the particular service has a fixed cost depending on the number of hours it is being used.
- Pay-As-You-Go: Such a model instead of charging a fixed rate, charges on the basis of the use of the service. Such a company can fix a certain price for each month in addition to which the amount according to the service user has to be paid.
- Brokerage: A brokerage model connects the buyers and sellers together and such a company is not itself involved in the direct selling of goods or services. Such companies receive a commission which is the amount of the price paid by the buyer once a deal is finalized.
Established businesses need to update their business models consistently in order to ensure profitability otherwise they will not be able to fit into the market demands and often lie behind.
It is a high-level plan in a specific marketplace which is based on the customer type and the target audience. This plan is devised based on the present market demands and the needs of the customer.
Benefit Of A Good Model
Value Proposition is the primary composition of a model which gives the description of the goods or services a company has to offer and how these services are desirable to customers mainly stating the points which distinguish them from their competitors. Thus, it provides company with their USP which implies the Unique Selling Proposition thus giving companies an edge over the companies which fail to devise a proper plan of execution.
Thus, we come to the conclusion that a proper model can make the business grow exponentially.