Business Models

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Business Model:

| Definition of 'Business Model'The plan implemented by a company to generate revenue and make a profit from operations. The model includes the components and functions of the business, as well as the revenues it generates and the expenses it incurs.| Business model is the method by which a firm manages to remain a going concern, and a business strategy helps to define the goals of a particular business model chosen. With the advent of the internet, some existing business models were revised and other new models

1.Name your own price:

"Name-Your-Own-Price" (NYOP) system is where a buyer specifies a price and a product and/or service, and asks sellers to match that combination. Customers decide how much they are willing to pay. This is an innovative pricing method where customers have the possibility of paying any price they wish, even nothing, for a certain product or service .An intermediary (for example, www.priceline.com) tries to match a provider. NYOP is a special type of reverse auction originally pioneered on the Internet by Priceline.com. Name-your-own-price sales are considered "opaque" by marketers because buyers "don't know the name of the supplier (airline, hotel or car rental company) or the schedule (with air tickets) until after" they make a nonrefundable purchase. Suppliers benefit because they can sell to the most price-conscious travelers without publicly disclosing those low rates.

Example:

Priceline.com is an online booking service that allows you to Name Your Own Price that you want to spend for flights, hotels, and car rentals. The premise is that you can bid on the service you want. If the vendor accepts your bid, you can save yourself some money

Priceline hotel bidding:

Priceline.com promises you an easy way to save up to 50% off booking your hotel directly: First, select an area (or zone as Priceline calls it) in which you would like to stay, next select a quality level that will satisfy...
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