Business Models provide a framework for how to make or how to sell. Watch the video and answer the questions below.
The Explainer: What is a Business Model?
Conduct a little research on business models. Provide an example of how the industry assigned to you uses either the product and/or marketing business model.
Following is the assigned industry for you to focus on for this week’s business model, please use the first letter of your first name:
| A–D | Automobiles |
| E–H | Travel Tourism |
| I–L | Health Care |
| M–P | Sporting Goods |
| Q–V | Household/Personal Products |
| Q–Z | Materials (raw) |
Business Models: Frameworks for Success
A business model serves as a strategic blueprint that outlines how a company creates, delivers, and captures value. It provides a framework for how businesses generate revenue, sustain operations, and grow within competitive markets. The video “The Explainer: What is a Business Model?” describes business models as essential structures that guide companies in making decisions about product development, marketing strategies, and revenue generation.
Understanding Business Models
Business models generally fall into several categories, such as product-based models, service-based models, marketplace models, and hybrid models. Companies must choose the right model based on their industry, target audience, and competitive landscape. Effective business models incorporate key components like customer value propositions, revenue streams, cost structures, and distribution channels.
Assigned Industry: Health Care
Given the assigned industry—health care—the business model predominantly revolves around service provision, patient care, and innovative medical products. The health care sector often adopts multiple business models to ensure accessibility, efficiency, and profitability.
One prevalent business model in health care is the subscription-based model, where patients pay a recurring fee for continuous access to medical services. This is seen in concierge medicine, where patients receive personalized care, shorter wait times, and comprehensive medical attention in exchange for a monthly or annual fee.
Another commonly used model is the fee-for-service model, in which providers charge patients or insurers for individual medical procedures and consultations. This model is widely adopted in hospitals, clinics, and private practices.
Example: Telemedicine and Digital Health Services
The emergence of telemedicine exemplifies the integration of the product and marketing business models in health care. Companies like Teladoc Health and Amwell use a digital platform to connect patients with doctors remotely. These companies market their services directly to consumers through digital advertising, employer partnerships, and insurance collaborations. They generate revenue through per-visit charges, subscription fees, or insurance reimbursements.
Furthermore, pharmaceutical companies often adopt a product-based business model, investing heavily in research and development (R&D) to create life-saving drugs and medical devices. Once developed, they market these products to hospitals, clinics, and consumers while navigating regulatory requirements.
Conclusion
Business models provide a structured approach for companies to generate revenue, sustain operations, and expand their market presence. In the health care industry, organizations leverage various models, such as fee-for-service, subscription-based, and product-based strategies, to optimize patient care and business success. As technology continues to evolve, health care businesses must adapt their models to remain competitive and meet the growing demands of patients and stakeholders.