What is a business model? 7 popular business models today

A business model is the key to shaping the success of a business, helping to create, deliver and capture value from a product or service. Learn now to discover the most popular and effective models today.

1. What is a business model?

A business model is the way a company creates, delivers and captures value from its activities. It includes defining its operating structure, revenue streams, market approach and cost drivers to ensure the business is profitable and sustainable. An effective business model is not only the foundation for survival but also the driving force for long-term growth.

2. The importance of building a business model in an enterprise

2.1 Strategic orientation and decisions

A business model acts as a strategic map, helping a business determine its direction and key decisions. A good model will help a business anticipate opportunities and risks, thereby making decisions quickly and effectively. The business model canvas is a typical example, providing a comprehensive view of the company's operations and strategy.

2.2 Optimizing resources and operations

Building a business model helps optimize the use of resources such as human resources, finance and technology. Enterprises can focus on core activities and eliminate unnecessary factors, thereby increasing efficiency and saving costs.

2.3 Create competitive advantage

A unique business model can become a competitive advantage for a business. For example, a B2B (Business-to-Business) business model helps businesses focus on cooperating with large partners, expanding their network and strengthening their market power.

2.4 Enhance adaptability and innovation

In a volatile market, the ability to adapt and innovate is key to survival. A flexible business model enables a company to quickly adapt to change and find new approaches to maintain its competitive position.

3. Introducing 12 popular, profitable business models

3.1 B2B2C retail model

The B2B2C model combines the advantages of B2B (Business-to-Business) and B2C (Business-to-Consumer), helping products from businesses go directly to consumers. Examples of this business model are platforms like VinShop, where traditional grocery stores can access product supplies directly from manufacturers.

3.2 Franchise model

Franchising is when a business provides a business license to a partner to sell products and services under its brand. The business model of FPT and coffee chains like Trung Nguyen is proof of the effectiveness of this model.

3.3 Freemium Business Model

The Freemium model offers a product for free with basic features and charges for premium features. For example, Spotify and Canva attract users with a free version and encourage them to upgrade to a paid version.

3.4 Subscription business model

Subscription models focus on generating a steady stream of income from recurring payments. Netflix and Amazon Prime are prime examples, helping customers stay loyal and generating a steady stream of revenue.

3.5 Hidden revenue model

Google and Facebook employ a hidden revenue model, offering free services and making money from advertising based on user data.

3.6 Printer & Cartridge Models (Razor Blades)

The printer & cartridge business model sells the main product at a low price and accessories at a higher price. Products such as HP printers and Nespresso coffee machines are examples of this strategy.

3.7 Direct Sales

Direct selling cuts out the middleman, allowing businesses to reach customers quickly. Stores and spas often use this model to interact directly with buyers.

3.8 Online business

Online business is becoming a trend with e-commerce platforms such as Shopee and Lazada . Businesses can save on rental costs and expand customer reach.

3.9 Affiliate Marketing Model

Affiliate Marketing is when you promote other businesses' products and receive a commission on each successful order. Platforms like Amazon Associates and Accesstrade in Vietnam are typical examples.

3.10 E-commerce: Electronic commerce

E-commerce is a model that allows buying and selling transactions to take place over the internet. Tiki and Sendo are successful representatives in exploiting this model.

3.11 Vertical supply chain business

Companies like Apple and Amazon own the supply chain from manufacturing to distribution, helping control costs and product quality.

3.12 Model of eliminating intermediary channels

This model allows businesses to sell directly to customers without going through intermediaries, helping to save costs and increase profits.

4. 5-step process to build an effective business model

Step 1: Build a business idea

Identify creative ideas, meet market needs and create core values .

Step 2: Set business goals

Clearly define measurable goals and then create a detailed plan to achieve them.

Step 3: Market Research

Analyze customers, evaluate competitors and identify potential opportunities and challenges.

Step 4: Set up the SWOT model

Assess strengths , weaknesses , opportunities and threats to develop strategy.

Step 5: Establish business model and organize implementation

Deploy business models and organize the implementation of detailed plans, from business strategy to corporate structure .

A business model is not only a tool, but also a foundation that helps businesses determine their direction, optimize operations and create competitive differentiation. Building and adjusting a business model is a continuous process for businesses to develop sustainably in a volatile market.

Brand Manager – Specializing in Providing Marketing Services

Establishing a solid business model not only helps a business operate efficiently but also creates a foundation for a strong marketing strategy. This is where the Brand Manager comes in as a key player, ensuring that the brand is not only recognized but also creates a lasting connection with customers. The Brand Manager not only relies on the business model to build strategy but also implements creative marketing activities, manages resources effectively and optimizes the customer experience.

The Brand Manager acts as a commander, transforming elements of the business model into comprehensive marketing campaigns, helping the brand continuously develop and maintain its competitive position in the market.