New business models

Generally speaking, a business model outlines how it is intended for a business to operate. It is often said that a business model represents a theoretical description of how value can be created. It may consist of different elements, such as a revenue model, which outlines how revenue is generated, a production model, which outlines how products and services are produced and a supply model, which outlines how products or services are provided to the customer.

The business model is based on one or more business ideas. An extremely common business model is for a company to develop and manufacture a product which is subsequently sold to customers. Nowadays, however, a number of new ways to run a business have emerged. Listed below are different business models for different types of products and services:

• Selling a product or service.
• Leasing.
• Functional sales.
• Renting out a product instead of selling it.
• A shared pool (cars, for example), whereby something is jointly owned.
• Servicification, that is, adding services to a product.

It is important to create value for the customer and financial sustainability for the company providing the product or service. Value may refer to different factors, not only financial.