Case Study : A Business Model Essay

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A business model is a plan for the successful operation of a business, identifying sources of revenue, the intended customer base, products and details of financing. There are essentially nine different components to any business model; two of these are customer segments and value propositions. Customer segments focuses on which section of the market a business chooses to cater for, while value propositions is defined as solving customer problems and meeting customer needs, thereby creating value. All nine elements of the business model canvas must be interdependent in order for a business to be successful; thus, the importance of a clearly delineated customer segment for the effective communication of a value proposition is highlighted. A business may struggle to create value for customers through satisfying needs and wants, if they are unsure as to whom their customer base consists of. Unclear customer segmentation will lead to a lack of a strong value proposition within a business, which may discourage consumers, as there is no added benefit for them. An example of a business with a clear customer base and a good value proposition is, the world’s largest online bookstore and shopping destination. Amazon’s distinct customer segmentation has allowed them to more easily communicate their value proposition, as they can identify customer needs and wants and then implement strategies to meet them. In contrast to this, the international phone company Nokia was not as…

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