35 Business Model Innovation Terms

Value Proposition: The unique value a business promises to deliver to customers.

Revenue Streams: The various sources from which a business earns money.

Cost Structure: The composition and dynamics of costs the business incurs.

Customer Segmentation: Dividing customers into distinct groups with common characteristics.

Value Chain: The series of activities a business undertakes to deliver a product or service.

Lean Startup: An approach to business development that emphasizes rapid prototyping and iterative learning.

Business Model Canvas: A strategic management tool for developing new or documenting existing business models.

Disruptive Innovation: Innovations that create new markets and value networks, eventually displacing established market leaders.

Freemium Model: A business model where basic services are provided free of charge while more advanced features must be paid for.

Subscription Model: A revenue model where customers pay a recurring price at regular intervals for access to a product or service.

Agile Methodology: An approach to software development that emphasizes flexibility, customer involvement, and rapid iteration.

Minimum Viable Product (MVP): The most basic version of a product that can be released to test a new business model or product idea.

Customer Lifetime Value (CLV): The total worth of a customer to a business over the entirety of their relationship.

Scaling: The process of expanding a business model to handle increased demand.

Pivot: A significant change in a business model or strategy, often based on learnings from the market.

Network Effects: The phenomenon where increased numbers of users improve the value of a product or service.

B2B (Business-to-Business): A business model involving transactions between businesses.

B2C (Business-to-Consumer): A business model involving transactions between businesses and consumers.

C2C (Consumer-to-Consumer): A business model where consumers trade with each other, typically through an online platform.

Marketplace Model: A business model that connects buyers and sellers, often taking a commission from each sale.

Ecosystem: A network of interlinked businesses, platforms, and services.

Value Network: A set of connections between organizations and/or individuals interacting with each other to benefit the entire group.

Franchise Model: A type of licensing agreement where a franchisor allows a franchisee to use its brand and business model.

Direct Sales Model: A business model where products or services are sold directly to customers, bypassing traditional retail.

Affiliate Marketing: A marketing arrangement where an online retailer pays commission to an external website for traffic or sales generated from its referrals.

Dropshipping: A retail fulfillment method where a store doesn’t keep the products it sells in stock.

Social Entrepreneurship: A business model that aims to solve social problems and improve society.

Sustainability Model: A business approach that creates long-term value by considering how a given organization operates in the ecological, social, and economic environment.

Cross-Selling: Selling additional products or services to an existing customer.

Up-Selling: Encouraging customers to purchase a more expensive item or upgrade a product or service.

Co-Creation: A business strategy where customers are involved in the creation of the value proposition.

Crowdsourcing: Obtaining information or input into a task or project by enlisting the services of a large number of people.

Platform Business Model: A business model that creates value by facilitating exchanges between two or more interdependent groups, usually consumers and producers.

Blue Ocean Strategy: The pursuit of creating new market space or “Blue Ocean”, rendering the competition irrelevant.

Lean Manufacturing: A production method aimed at reducing waste within manufacturing systems without sacrificing productivity.