Business Model Flashcards
(16 cards)
Business Models
Analyst need to develop their own understanding of an issuer’s business model to inform their outlook & risk assessment instead of relying on mgt’s description of BM. It should identify a firm’s potential customer, describe its product or services & explain how it will settle them, describe its key assets & suppliers & explain its pricing strategy
Pricing Models
Amount customers are billed for units of products or services
Firm’s value proposition
Product attributes that lead customers to choose them over competitors
Firm’s value chain
How a firm structure its system and process to create value for its customers. Includes only those functions performed by single firm. How aspect of a BM. Doesn’t involve physical transformation or product handling. Different from supply chain which refers to sequence of process involved in creation of product both within & o/s firm
Conventional vs Unconventional BM
CBM is common and long established while UBM are based on innovations or industry specific combinations and variations of conventional model
Successful BM
neither new nor unique but proven
Change BM
Mgt can & can launch new business with distinct model within same co so it is ongoing analysis
Direct sales
Common and longstanding channel strategy for complex or high-margin products or services, such as medical devices, industrial equipment, and luxury goods. It is common in B2B models where the universe of potential customers is relatively small and easily reached.
Omnichannel strategy
common for apparel & consumer packaged goods relies on both digital & physical channels to complete sale
Commodity Producers
Operating in mkt with many competitors & are price takers
Tiered Pricing
Charging different prices to different buyers, often based on volume purchased but also based on product features
Dynamic Pricing
Charging different prices at different times and for different types of customers depending on such variables as available supply levels and demand. Specific examples include seasonal pricing for hotels
Bundling
Combining multiple products or services so that customers are incentivized or required to buy them together
Add-on Pricing
Customer buys additional but optional services or product features, either at the time of purchase or during product use.
Penetrative Pricing
Marketing strategy where a company sets a low initial price for a new product or service to attract customers quickly and gain market share — especially in competitive markets.
Firm’s 4 Primary Support Activities
Procurement, HR Management, Technology development & Firm Infrastructure
