1.1 Business models as attributes of real firms
This first interpretation of the meaning of a business model is focused on explaining how firms do business.
A short definition of a business model is:
how a company makes money
Two more structured definitions maintain that:
A business model [is a] set of activities, as well as the resources and capabilities to perform them—either within the firm, or beyond it through cooperation with partners, suppliers or customers.
[It depicts] the content, structure, and governance of transactions designed so as to create value through the exploitation of business opportunities.
Example 1: Socremo
Socremo is a bank in Mozambique, in south-east Africa. Its business model helps to extend banking services to the low-income population by offering micro-credits. These are designated for starting up micro businesses such as counters and kiosks for sales of home-grown fruit and vegetables, and traditional art.
