A business model refers to the trade-offs and decisions regarding how an organization makes money. Every business model must answer four questions. The four questions are: who is the customer?; what does the customer value?; what is the underlying logic of how value is delivered to the customer?; and how does the organization make money? The traditional day care business model answers the four questions as follows: The parents are the customers. The parents value a place for their kids during the day. The parents value day care because it frees up their time to do other things besides caring for their children, for example, working. The traditional day care organization makes money by charging a fee for that service. The Bright Horizons business model answers the four questions as follows: The employer is the customer. The employer values employee productivity. The employer values lower absenteeism and turnover, which increases productivity. The employees stay with the employer for the convenience of having on-site day care. For a fee, Bright Horizons provides knowledge and advice regarding setup and management of employer-provided day care. In my opinion, Bright Horizons’ business model is far superior to the traditional business model. The differences between the business models of the traditional day care and Bright Horizons rest in the different answers to the four questions that all business models must answer. The customer in the traditional day care is the parents while the customer in the Bright Horizons business model is the employers of the parents. The customer in the traditional day care values a place to leave their children during the day. The customer in the Bright Horizons model values employee productivity. The traditional model offers a place for children to stay during the day while the Bright Horizons model provides convenience to the employee, which in turn, increases productivity and reduces turnover. The traditional...
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