Business Model of Facebook
The Business Model of FACEBOOK
Business model is the mechanism by which a business intends to generate revenue and profits. It is a summary of how a company plans to serve its customers. It involves both strategy and implementation. It is the totality of:
• How it will select its customers
• How it defines and differentiates its product offerings
• How it creates utility for its customers
• How it acquires and keeps customers
• How it goes to the market (promotion strategy and distribution strategy)
• How it defines the tasks to be performed
• How it configures its resources
• How it captures profit
There are many different types of business models as some are more complex than others depending on the service. A few examples of types of business models are as follows:
• The subscription business model is a business model where a customer must pay a subscription price to have access to the product/service. The model was pioneered by magazines and newspapers, but is now used by many businesses and websites.
• The razor and blades business model is a business model where one item is sold at a low price (or free) in order to increase sales of a complementary good, such as supplies (inkjet printers and ink cartridges) or software (game consoles and games).
• The pyramid scheme business model is a non-sustainable business model that involves promising participants payment, services or ideals, primarily for enrolling other people into the scheme or training them to take part, rather than supplying any real investment or sale of products or services to the public.
• The multi-level marketing business model is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a down line of distributors and a hierarchy of multiple levels of compensation.
• The network effects business model is the effect that one user of a good or service
Business model is the mechanism by which a business intends to generate revenue and profits. It is a summary of how a company plans to serve its customers. It involves both strategy and implementation. It is the totality of:
• How it will select its customers
• How it defines and differentiates its product offerings
• How it creates utility for its customers
• How it acquires and keeps customers
• How it goes to the market (promotion strategy and distribution strategy)
• How it defines the tasks to be performed
• How it configures its resources
• How it captures profit
There are many different types of business models as some are more complex than others depending on the service. A few examples of types of business models are as follows:
• The subscription business model is a business model where a customer must pay a subscription price to have access to the product/service. The model was pioneered by magazines and newspapers, but is now used by many businesses and websites.
• The razor and blades business model is a business model where one item is sold at a low price (or free) in order to increase sales of a complementary good, such as supplies (inkjet printers and ink cartridges) or software (game consoles and games).
• The pyramid scheme business model is a non-sustainable business model that involves promising participants payment, services or ideals, primarily for enrolling other people into the scheme or training them to take part, rather than supplying any real investment or sale of products or services to the public.
• The multi-level marketing business model is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a down line of distributors and a hierarchy of multiple levels of compensation.
• The network effects business model is the effect that one user of a good or service