Business models evolve
Paul Suff finds out how company strategies are changing to become more sustainable
A business model is simply how a company plans to generate revenue and make a profit from its operations. Essentially, the model is designed to deliver, create and capture value.
Through its classic “bait and hook” business model, for example, Gillette sold its razor holder cheaply, making most of its money from customers’ subsequent purchases of new razor blades. It is an approach more recently copied by printer manufacturers, whose relatively cheap home printers require consumables that are generally at least as costly.
Bait and hook is an example of the so-called “take, make, discard” linear approach to business, whereby raw materials are extracted to be turned into a product which, at the end of its life, is going to be sent to landfill or incinerated.
This kind of throwaway society and accompanying business model is no longer viable. As demand for goods and services escalates from a booming global population and as natural resources become ever scarcer, forcing up costs, many companies are searching for a new way of operating: one that is better for the environment, society and the company. Step forward the sustainable business model.
A change is going to come
Plan A, the business model Marks &...