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What Is a Business Model?

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Business Models and Strategic Management: A New Integration is a seven-chapter book published by the Business Expert Press in 2012 and written by Francine Newth, associate professor of strategy at the School of Business at Providence College. The author says that an effective strategy derives from a fundamental understanding of how a company operates, which is defined by its business model. She explains the elements of a business model and how to integrate it with strategic decision making, providing what the she calls a more "real-world" guide to effective management. She provides practical insight for managers and conceptual models grounded in research and current business examples. Each chapter includes discussion guides and a practical exercise based on real-world companies. In Chapter 1, What Is a Business Model? (25 pages), the author explains that a strong business model has both qualitative and quantitative elements. The qualitative base of the model comprises the value proposition, dynamic capabilities and competencies, and financial viability. The quantitative elements of a model's profit formula are revenue sources, cost structure, and profitability. The author offers steps to consider when creating or revising a business model. There are three discussion activities based on Netflix, Wal-Mart, and eBay. There is also an exercise on analyzing a business model matrix from a qualitative and a quantitative perspective.
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