One Cow Describes Eight Business Models

Leave it to the power of one cow to help you understand the workings of these 8 popular business models.

April 23rd, 2017   |    By: Jennifer Gueringer    |    Tags: Planning, Model, Strategy, Sales

Business theory can be tricky to understand. Leave it to the power of one cow to help you grasp the workings of these popular business models.

The Direct Sales Model

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A direct sales business operates through a network of salespeople. Typically there is no fixed retail location.

Examples: Avon, Mary Kay, Traveling Vineyard

The Freemium Model

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A business under a freemium model gives away a service at no cost before offering advanced services as add-ons.

Examples: Dropbox, Hootsuite, MailChimp

The Subscription Model

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The objective of a subscription business model is to retain customers under a long-term contract and secure recurring revenue.

Examples: Netflix, eHarmony

The Franchise Model

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Under a franchise business model, business owners purchase another organization’s business strategy.

Examples: McDonald’s, Subway, Starbucks

The Loss Leader Model

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Loss leader model is a strategy in which a store sells selected goods below cost in order to attract customers who will make up for the losses on more expensive products.

Examples: Samsung, O2, Microsoft

The On Demand Model

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Good or services are sold to customers that are typically centered around online platforms. They often offer delivery in a short timeframe.

Examples: Uber, Airbnb, Instacart

The Ziferblat Model

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A unique business model where customers pay for the time in a location and not for extra items such as coffee.

Examples: Ziferblat

The Crowdsourcing Model

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Crowdsourcing is the practice of engaging a ‘crowd’ to contribute collectively to a project or cause.

Examples: Zooniverse, MyMachine

TAKEAWAY:

It goes to show that the simplicity of one humble cow can help you learn the operations of many businesses today.


Also shared on The Business Backer.

About the Author

Jennifer Gueringer

Hi, my name is Jennifer. I'm based in Chicago and I'm the social media and content manager for The Business Backer. I write about entrepreneurship, small business management, and new and creative ways to run a profitable company. You can find me on LinkedIn.

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