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Thursday, June 24, 2004

"Business Model" Explained via Fool.com

A solid understanding of the "business model" concept is definitely needed to assess enteprises and evaluate potential investments.A firm's business model is simply the method by which it makes its money For example, part of Wal-Mart's (NYSE: WMT) business model was initially to establish profitable stores in small communities that other discount chains had dismissed. (It's now establishing itself even in large cities.) Coca-Cola's (NYSE: KO) business model involves using its secret formula to manufacture syrup that it supplies to bottlers. By distributing its beverages through stores, restaurants, vending machines, and more, it's attempting to make its drinks easily available to anyone. Very important in differentiating enteprises, more so service enteprises like consulting where differentiation and value addition directly gets related to revenues and in providing stable growth trajectories.
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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
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