ITM 350 Chapter 2: ITM 350 Chapter 2 Notes.docx
13 Mar 2012
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A business model is the manner in which a business organizes itself to achieve its objectives, which normally involve the generation of profits. There are 8 components which make up the business model: external forces: Political, economic, social, and technological factors, pressures, and forces from outside the entity that create opportunities for the entity or threaten its business objectives: markets/formats: The domains in which the entity may choose to operate, and the design and location of the facilities. Reverse auction: an auction that has one buyer offering a supply contract to many sellers, who compete by bidding down the supply price for the contract: customers: The individuals and organization that purchase the entity s outputs: core business processes: The processes used to develop, produce, market, and distribute an entity s products and services. A pure-play company is one that is completely focused on the internet, with some physical sites: core products and services:
