In recent years, more and more companies focus on their business model. Compare with traditional business model, a new business model can provide some completive benefits and lower costs to companies. It means the innovation of business model can bring companies much profit. Therefore this paper report focus on different kinds of new business model in social network industry, and analysis the benefits of Facebook’s business model.
In the first section, this paper report will give a definition of business model. It will include what are business model, and the importance of business model. Moreover, through business model canvas theory, paper report given some suggests about how to design companies’ business model. Then, this report provided a system of special examples in relative industries such as Google, Amazon, Groupon and Skype. Through these examples, paper report analyzed the importance and successful of business model. At last, paper report examined Facebook’s business model in two fields: revenue streams and customer strategy.
2. Business model
2.1 Definition of business model
In terms of the most rudimentary level, Stewart and Zhao (2000) approached that ‘‘business model as a statement of how a firm will make money and sustain its profit stream over time.’ (Stewart DW, 2000) It means business mode is the way of how company earns money and keeping their customers. However, at the operational level, business model could be described an architectural configuration. It will focus on the company’s internal process and helping firms design a kind of structure. This structure enables firms to create value and attach customers. (Michael M, 2005) Furthermore, at the strategy level business model also include the firm’s market position, growth opportunities, competitive advantage and sustainability.
2. Decision of business model
When a company decides their business model, a large number of fields should be considering. Such as firm’s