Business Model Examples

There are many examples of inspiring business models and business model innovators described and referenced on this blog and elsewhere. To provide a quick read with popular examples, a list of business model innovators is presented below. Please feel free to comment or contact me on great business model examples that you find missing.

Amazon - Leveraging assets

Launched in 1994 as an online book seller, Amazon has constantly altered its business model leveraging its assets and capabilities to generate new business… Read more

Apple - Providing convenient solutions

Apple has revolutionized the computer industry, the music industry and now the mobile phone industry, and the classic example is iPod and iTunes… Read more

Better Place - Using per-distance fees

Better Place aims to use the margin between electricity and gas to subsidize the cost of new electric cars, even providing electric cars for free... Read more

Etsy - Mass customization of arts

Aggregating the long tail in an online marketplace for handmade goods with the goal to enable people around the world to make a living making things… Read more

Gillette - Razor and blades

Gillette's success with its razors and blades is a story about superior technology, design and the use of control mechanisms, foremost patents… Read more

Lego - Turning users into developers

Lego has turned its most loyal users into designers and co-creators of their own products. More than 30000 kits have been shared so far… Read more

Tata Motors - Modular distribution

Tata Nano is not only cheap to buy it is constructed of modules that can be built and shipped separately to be assembled in a variety of locations.… Read more

Threadless - Dressing the long tail

Threadless was one of the first firms to systematically mine a community for designs, a trend that today can be seen in various industries… Read more

Xerox - Business Innovation in 1959

The company decided to lease the equipment, instead of selling it, at a relatively low cost and then charge a per copy fee for copies in excess of 2000 copies per month… Read more

Zara - a devastating business model

Zara has managed to substantially shorten the time to develop a new product and get it to stores, and in doing so it can react quickly to changing market trends… Read more

More inspiring examples will come, send me your suggestions!

Further reading:

Using the crowd as a part of the business model

10 Initiatives using the crowd to generate new ideas

Business model example: Better Place - Introducing per-distance fees

For many years the car manufacturers have struggled with that electric cars are too expensive to sell in comparison to current cars, due to the very expensive battery. At the same time car manufacturers have been aware of the margin between what electricity costs and what is paid today per km gas. The performance of the battery has also been limited, reducing the range for which the car can be used between charging and the time it takes to charge the battery has been considered too long. While car manufacturers are waiting for battery companies to develop the technology for future cars, Better Place has developed a business model for electric cars and infrastructure that is being tested in Israel, Denmark and Hawaii - small geographical markets with special tax policies for zero-emission cars. Better Place is not focusing solely on the cars but on the system including charge spots, battery-switching stations, and grid-management software. Redefining the electric car, where customers are not allowed to purchase battery packs, the company is able to use a business model similar to how mobile phones are sold. The company then uses the margin between electricity and gas to subsidize the cost of new electric cars, providing electric cars for free, for customers signing up to costs similar to the costs they have for gas today. The costs, or per-distance fees, cover battery pack leasing, charging and battery switching infrastructure.

Further reading:

• List of business model examples
• Tata Motors - Inexpensive cars for modular distribution

Video:

• Shai Agassi on the business model of Better Place

Business model example: Amazon - Leveraging assets

Amazon was launched in 1994 and established itself as an online book seller providing books but also an online community for customers to share information and opinions about books with one another. The company soon realized the potential in leveraging the platform and infrastructure to offer new categories of products, turning into an online department store. Amazon also supplies e-commerce services and features to power other companies' web sites. Another way of leveraging its software is the supply of e-commerce services to syndicated stores that sell Amazons products on other companies' web sites resulting in distributed distribution channels. To provide the largest catalog possible on its platform, other companies including competitors are allowed to utilize the platform establishing Amazon as a broker of transactions and leaser of web space to other retailers. By bringing buyer and seller together, collecting the buyer's funds when the order is placed, and maintaining advantageous payment terms with suppliers, Amazon has done with online retailing what Dell did with computers. Further leveraging its assets and capabilities Amazon started to offer a number of services such as storage services, the lease of computing power, together with an end-to-end product sales and logistics platform, handling orders, payments and shipments.

Further reading:

• List of business model examples