A simpler reference to a business model is ‘how a business intends to make money and be profitable. A business model should seek to define what value is delivered to customers or answer why customers will be willing to buy the product/service, highlight what differentiates the offering from that of the competitors, establish the feasibility of the distribution process, and identify the technological/business applications platform required to successfully create and deliver the intended offering. These factors must be considered in developing retail business models.
An ideal business model should have target group characteristics analysis, swot analysis, strategic planning models, revenue model, competitive advantage strategy, the balanced scorecard for KPIs analysis, long term strategies, Innovative building blocks and USPs.
More technically, business model development is about crafting the strategic framework for creating the value chain and internal capabilities that will make the business idea tick.