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92-502: Consumer-to-business ( C2B ) is a business model in which consumers (individuals) create value and businesses consume that value. For example, when a consumer writes reviews or when a consumer gives a useful idea for new product development then that consumer is creating value for the business if the business adopts the input. In the C2B model , a reverse auction or demand collection model, enables buyers to name or demand their own price, which

184-752: A stock exchange , or in multiple other ways. Major stock exchanges include the Shanghai Stock Exchange , Singapore Exchange , Hong Kong Stock Exchange , New York Stock Exchange and NASDAQ (the US), the London Stock Exchange (UK), the Tokyo Stock Exchange (Japan), and Bombay Stock Exchange (India). Most countries with capital markets have at least one. Businesses that have gone public are subject to regulations concerning their internal governance, such as how executive officers' compensation

276-399: A "process optimization process". It is argued that BPM enables organizations to be more efficient, effective and capable of change than a functionally focused, traditional hierarchical management approach. Most legal jurisdictions specify the forms of ownership that a business can take, creating a body of commercial law applicable to business. The major factors affecting how a business

368-535: A business model has been incorporated into certain accounting standards. For example, the International Accounting Standards Board (IASB) utilizes an "entity's business model for managing the financial assets" as a criterion for determining whether such assets should be measured at amortized cost or at fair value in its International Financial Reporting Standard, IFRS 9 . In their 2013 proposal for accounting for financial instruments,

460-514: A business model when none is in place and business model reconfiguration for the process of changing an existing business model, also highlighting that the two processes are not mutually exclusive, meaning reconfiguration may involve steps which parallel those of designing a business model. Al-Debei and Avison (2010) consider value finance as one of the main dimensions of business modelling which depicts information related to costing, pricing methods, and revenue structure. Stewart and Zhao (2000) defined

552-735: A business model. A systematic review and analysis of manager responses to a survey defines business models as the design of organizational structures to enact a commercial opportunity. Further extensions to this design logic emphasize the use of narrative or coherence in business model descriptions as mechanisms by which entrepreneurs create extraordinarily successful growth firms . Business models are used to describe and classify businesses, especially in an entrepreneurial setting, but they are also used by managers inside companies to explore possibilities for future development. Well-known business models can operate as "recipes" for creative managers. Business models are also referred to in some instances within

644-479: A business. Some businesses are subject to ongoing special regulation, for example, public utilities , investment securities, banking, insurance, broadcasting , aviation , and health care providers. Environmental regulations are also very complex and can affect many businesses. When businesses need to raise money (called capital ), they sometimes offer securities for sale. Capital may be raised through private means, by an initial public offering or IPO on

736-705: A change from traditional business models. One is the subscription model , in which platforms charge users a small monthly fee in exchange for services. She notes that the model was ill-suited for those "accustomed to free content and services", leading to a variant, the freemium model. A second method is via advertising. Arguing that traditional advertising is no longer appealing to people used to "user-generated content and social networking", she states that companies now turn to strategies of customization and personalization in targeted advertising . Eric K. Clemons (2009) asserts that consumers no longer trust most commercial messages; Van Dijck argues platforms are able to circumvent

828-499: A company selects its customers defines and differentiates its offerings, defines the tasks it will perform itself and those it will outsource, configures its resource, goes to market, creates utility for customers, and captures profits". A business framework involves internal factors ( market analysis ; products/services promotion; development of trust; social influence and knowledge sharing) and external factors (competitors and technological aspects). The process of business model design

920-426: A company's business model. In a paper published in 2017, Johnson demonstrated how matrix methods may usefully be deployed to characterise the architecture of resources, costs, and revenues that a business uses to create and deliver value to customers which defines its business model. Systematisation of this technique (Johnson settles on a business genomic code of seven matrix elements of a business model) would support

1012-494: A company-type management system. Many state institutions and enterprises in China and Russia have transformed into joint-stock companies, with part of their shares being listed on public stock markets. Business process management (BPM) is a holistic management approach focused on aligning all aspects of an organization with the wants and needs of clients . BPM attempts to improve processes continuously. It can, therefore, be described as

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1104-437: A competitive advantage. Although business model innovation promises financial returns, periods of radical business model innovation can reduce the person-organization fit and thus lead to a greater fluctuation in the workforce. As a specific instance of Business Model Dynamics, a research strand derived from the evolving changes in business models, BMA identifies an update of the current business model to changes derived from

1196-442: A given value. As a result of digital transformation , it is the predominant business model of the 21st century. In an op-ed on MarketWatch, Choudary, Van Alstyne and Parker further explain how business models are moving from pipes to platforms, leading to disruption of entire industries. There are three elements to a successful platform business model. The toolbox creates connection by making it easy for others to plug into

1288-413: A new business model, the process is called business model innovation. There is a range of reviews on the topic, The concept facilitates the analysis and planning of transformations from one business model to another. Frequent and successful business model innovation can increase an organisation's resilience to changes in its environment and if an organisation has the capability to do this, it can become

1380-434: A new one. Business Business is the practice of making one's living or making money by producing or buying and selling products (such as goods and services ). It is also "any activity or enterprise entered into for profit." A business entity is not necessarily separate from the owner and the creditors can hold the owner liable for debts the business has acquired. The taxation system for businesses

1472-524: A process known as an initial public offering (IPO) means that part of the business will be owned by members of the public. This requires the organization as a distinct entity, to disclose information to the public, and adhering to a tighter set of laws and procedures. Most public entities are corporations that have sold shares, but increasingly there are also public LLC's that sell units (sometimes also called shares), and other more exotic entities as well, such as, for example, real estate investment trusts in

1564-552: A range of human activity, from handicraft to high tech , but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale. Marketing is defined by the American Marketing Association as "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large." The term developed from

1656-448: A share capital), this will be the shareholders . In a company limited by guarantee, this will be the guarantors. Some offshore jurisdictions have created special forms of offshore company in a bid to attract business for their jurisdictions. Examples include " segregated portfolio companies " and restricted purpose companies. There are, however, many, many sub-categories of types of company that can be formed in various jurisdictions in

1748-516: A shift has occurred to allow consumers to be the driving force behind a transaction. To the consumers benefit, reverse auctions occur in consumer to business markets allowing the consumer to name their price for a product or service. A consumer can also provide value to a business by offering to promote a business products on a consumers blog or social media platforms. Businesses are provided value through their consumers and vice versa. Businesses gain in C2B from

1840-660: A sourcing business model known as Vested Outsourcing, a hybrid sourcing business model in which buyers and suppliers in an outsourcing or business relationship focus on shared values and goals to create an arrangement that is highly collaborative and mutually beneficial to each. From about 2012, some research and experimentation has theorized about a so-called "liquid business model". Sangeet Paul Choudary distinguishes between two broad families of business models in an article in Wired magazine . Choudary contrasts pipes (linear business models) with platforms (networked business models). In

1932-619: A study of collaborative research and external sourcing of technology, Hummel et al. (2010) similarly found that in deciding on business partners, it is important to make sure that both parties' business models are complementary. For example, they found that it was important to identify the value drivers of potential partners by analyzing their business models, and that it is beneficial to find partner firms that understand key aspects of one's own firm's business model. The University of Tennessee conducted research into highly collaborative business relationships. Researchers codified their research into

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2024-484: A successful sale. Elance was the first C2B model e-commerce site. C2B is a kind of economic relationship that is qualified as an inverted business type. The advent of the C2B scheme is due to: Nowadays people have smartphones or connect to the internet through personal tablets/computers daily allowing consumers to engage with brands online. According to Katherine Arline, in traditional consumer-to-business models companies would promote goods and services to consumers, but

2116-418: A taxonomical approach to empirical studies of business models in the same way that Linnaeus’ taxonomy revolutionised biology. Daas et al. (2012) developed a decision support system (DSS) for business model design. In their study a decision support system (DSS) is developed to help SaaS in this process, based on a design approach consisting of a design process that is guided by various design methods. In

2208-409: Is a complete reversal of the traditional business model in which companies offer goods and services to consumers ( business-to-consumer = B2C). We can see the C2B model at work in blogs or internet forums in which the author offers a link back to an online business thereby facilitating the purchase of a product (like a book on Amazon.com ), for which the author might receive affiliate revenues from

2300-408: Is a consequence of the business model and has a symbiotic relationship with it, because the business model determines the brand promise, and the brand equity becomes a feature of the model. Managing this is a task of integrated marketing . The standard terminology and examples of business models do not apply to most nonprofit organizations , since their sources of income are generally not the same as

2392-589: Is a field that deals with the study of money and investments . It includes the dynamics of assets and liabilities over time under conditions of different degrees of uncertainty and risk. In the context of business and management , finance deals with the problems of ensuring that the firm can safely and profitably carry out its operational and financial objectives; i.e. that it: (1) has sufficient cash flow for ongoing and upcoming operational expenses, and (2) can service both maturing short-term debt repayments, and scheduled long-term debt payments. Finance also deals with

2484-587: Is an organization of workers who have come together to achieve common goals such as protecting the integrity of its trade, improving safety standards, achieving higher pay and benefits such as health care and retirement, increasing the number of employees an employer assigns to complete the work, and better working conditions . The trade union, through its leadership, bargains with the employer on behalf of union members ( rank and file members) and negotiates labor contracts ( collective bargaining ) with employers. The most common purpose of these associations or unions

2576-419: Is crucial for all businesses to succeed as it helps companies adjust to a fast-moving business environment and the increasing demand for jobs. The term "Human Resource" was first coined by John R. Commons in his novel ' The Distribution of Wealth'. HR departments are relatively new as they began developing in the late 20th century. HR departments main goal is to maximize employee productivity and protecting

2668-616: Is determined, and when and how information is disclosed to shareholders and to the public. In the United States, these regulations are primarily implemented and enforced by the United States Securities and Exchange Commission (SEC). Other western nations have comparable regulatory bodies. The regulations are implemented and enforced by the China Securities Regulation Commission (CSRC) in China. In Singapore,

2760-668: Is different from that of the corporates. A business structure does not allow for corporate tax rates. The proprietor is personally taxed on all income from the business. A distinction is made in law and public offices between the term business and a company such as a corporation or cooperative . Colloquially, the terms are used interchangeably. Corporations are distinct from with sole proprietors and partnerships . They are separate legal entities and provide limited liability for their owners and members. They are subject to corporate tax rates. They are also more complicated and expensive to set up, but offer more protection and benefits for

2852-559: Is for those who prefer an administrative role as it involves oversight of the entirety of the company. HRIS involves the storage and organization of employee data including full names, addresses, means of contact, and anything else required by that certain company. Some careers of those involved in the Human Resource field include enrollment specialists, HR analyst, recruiter, employment relations manager, etc. Many businesses have an Information technology (IT) department, which supports

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2944-399: Is often binding, for a specific good or service. Inside of a consumer to business market the roles involved in the transaction must be established and the consumer must offer something of value to the business. Another form of C2B is the electronic commerce business model in which consumers can offer products and services to companies, and the companies pay the consumers. This business model

3036-484: Is organized are usually: Many businesses are operated through a separate entity such as a corporation or a partnership (either formed with or without limited liability). Most legal jurisdictions allow people to organize such an entity by filing certain charter documents with the relevant Secretary of State or equivalent and complying with certain other ongoing obligations. The relationships and legal rights of shareholders , limited partners, or members are governed partly by

3128-613: Is part of business strategy . Business model design and innovation refer to the way a firm (or a network of firms) defines its business logic at the strategic level. In contrast, firms implement their business model at the operational level, through their business operations . This refers to their process-level activities, capabilities, functions and infrastructure (for example, their business processes and business process modeling), their organizational structures (e.g. organograms, workflows , human resources) and systems (e.g. information technology architecture , production lines). The brand

3220-406: Is that consumer information and privacy could be compromised. For example, businesses might choose to secretly analyze consumer spending by using sensitive information such as purchase history, age, race, location, etc. Consumer to business is an up and coming business market that can be utilized as a company's entire business model or added to an already existing model. Consumer to business (C2B)

3312-407: Is the opposite of business to consumer (B2C) practices and is facilitated by the internet or online forms of technology. Another important distinction between the traditional business to consumer market is that the consumer chooses to be a part of the business relationship inside a consumer to business market. For a relationship to exist though both parties must acknowledge that it exists, implying that

3404-428: Is the process of exchanging goods and services. It is not just a single activity, but a set of activities that includes trade (buying and selling goods and services) and auxiliary services or aids to trade, that includes communication and marketing, logistics, finance, banking, insurance, and legal services related to trade. Business is also defined as engaging in commerce, as these are done in all businesses. Finance

3496-552: Is usually the facilitator of these. Business model In theory and practice, the term business model is used for a broad range of informal and formal descriptions to represent core aspects of an organization or business , including purpose , business process , target customers , offerings, strategies, infrastructure , organizational structures , profit structures, sourcing, trading practices, and operational processes and policies including culture . The literature has provided very diverse interpretations and definitions of

3588-486: The Financial Accounting Standards Board also proposed a similar use of business model for classifying financial instruments. The concept of business model has also been introduced into the accounting of deferred taxes under International Financial Reporting Standards with 2010 amendments to IAS 12 addressing deferred taxes related to investment property. Both IASB and FASB have proposed using

3680-515: The long term objective of maximizing the value of the business, while also balancing risk and profitability; this includes the interrelated questions of (1) capital investment , which businesses and projects to invest in; (2) capital structure , deciding on the mix of funding to be used; and (3) dividend policy , what to do with "excess" capital. Human resources can be defined as division of business that involves finding, screening, recruiting , and training job applicants. Human resources, or HR,

3772-825: The " canary in the coal mine " and reduce the cost to businesses of protecting their employees. Sales are activity related to selling or the number of goods or services sold in a given time period. Sales are often integrated with all lines of business and are key to a companies' success. The efficient and effective operation of a business , and study of this subject, is called management . The major branches of management are financial management , marketing management, human resource management , strategic management , production management , operations management , service management , and information technology management . Owners may manage their businesses themselves, or employ managers to do so for them. Whether they are owners or employees, managers administer three primary components of

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3864-483: The "tied products business model") was introduced in the early 20th century. This involves offering a basic product at a very low cost, often at a loss (the "bait"), then charging compensatory recurring amounts for refills or associated products or services (the "hook"). Examples include: razor (bait) and blades (hook); cell phones (bait) and air time (hook); computer printers (bait) and ink cartridge refills (hook); and cameras (bait) and prints (hook). A variant of this model

3956-614: The 1990s from Southwest Airlines , Netflix , eBay , Amazon.com , and Starbucks . Today, the type of business models might depend on how technology is used. For example, entrepreneurs on the internet have also created new models that depend entirely on existing or emergent technology. Using technology, businesses can reach a large number of customers with minimal costs. In addition, the rise of outsourcing and globalization has meant that business models must also account for strategic sourcing, complex supply chains and moves to collaborative, relational contracting structures. Design logic views

4048-470: The Internet, venture capital, bank loans, and debentures. Businesses often have important " intellectual property " that needs protection from competitors for the company to stay profitable. This could require patents , copyrights , trademarks , or preservation of trade secrets . Most businesses have names, logos, and similar branding techniques that could benefit from trademarking. Patents and copyrights in

4140-610: The Latin corpus , meaning body, and the Maurya Empire in Iron-Age India accorded legal rights to business entities. In many countries, it is difficult to compile all the laws that can affect a business into a single reference source. Laws can govern the treatment of labour and employee relations, worker protection and safety , discrimination on the basis of age, gender, disability, race, and in some jurisdictions, sexual orientation, and

4232-644: The US, and unit trusts in the UK. A general partnership cannot "go public". A very detailed and well-established body of rules that evolved over a very long period of time applies to commercial transactions. The need to regulate trade and commerce and resolve business disputes helped shape the creation of law and courts. The Code of Hammurabi dates back to about 1772 BC for example and contains provisions that relate, among other matters, to shipping costs and dealings between merchants and brokers . The word "corporation" derives from

4324-689: The United States are largely governed by federal law, while trade secrets and trademarking are mostly a matter of state law. Because of the nature of intellectual property, a business needs protection in every jurisdiction in which they are concerned about competitors. Many countries are signatories to international treaties concerning intellectual property, and thus companies registered in these countries are subject to national laws bound by these treaties. In order to protect trade secrets, companies may require employees to sign noncompete clauses which will impose limitations on an employee's interactions with stakeholders, and competitors. A trade union (or labor union)

4416-408: The activity of designing a company's business model. It is part of the business development and business strategy process and involves design methods . Massa and Tucci (2014) highlighted the difference between crafting a new business model when none is in place, as it is often the case with academic spinoffs and high technology entrepreneurship, and changing an existing business model, such as when

4508-413: The alignment of the organization's strategy with the organization's structure, operations, and the environmental factors in achieving competitive advantage in varying combination of cost, quality, time, flexibility, innovation and affective. Business model design includes the modeling and description of a company's: A business model design template can facilitate the process of designing and describing

4600-411: The beneficiaries. The term 'funding model' is generally used instead. The model is defined by the organization's vision, mission, and values, as well as sets of boundaries for the organization—what products or services it will deliver, what customers or markets it will target, and what supply and delivery channels it will use. Mission and vision together make part of the overall business purpose . While

4692-613: The business model as "a statement of how a firm will make money and sustain its profit stream over time." Osterwalder et al. (2005) consider the Business Model as the blueprint of how a company does business. Slywotzky (1996) regards the business model as "the totality of how a company selects its customers, defines and differentiates it offerings, defines the tasks it will perform itself and those it will outsource, configures its resources, goes to market, creates utility for customers and captures profits." Mayo and Brown (1999) considered

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4784-477: The business model as "the design of key interdependent systems that create and sustain a competitive business." Casadesus-Masanell and Ricart (2011) explain a business model as a set of "choices (policy, assets and governance)" and "consequences (flexible and rigid)" and underline the importance of considering "how it interacts with models of other players in the industry" instead of thinking of it in isolation. Zott and Amit (2009) consider business model design from

4876-478: The business model as an outcome of creating new organizational structures or changing existing structures to pursue a new opportunity. Gerry George and Adam Bock (2011) conducted a comprehensive literature review and surveyed managers to understand how they perceived the components of a business model. In that analysis these authors show that there is a design logic behind how entrepreneurs and managers perceive and explain their business model. In further extensions to

4968-451: The business model has to take into account the capabilities of Web 2.0 , such as collective intelligence , network effects, user-generated content , and the possibility of self-improving systems. He suggested that the service industry such as the airline, traffic, transportation, hotel, restaurant, information and communications technology and online gaming industries will be able to benefit in adopting business models that take into account

5060-427: The business model includes high-level strategies and tactical direction for how the organization will implement the model, it also includes the annual goals that set the specific steps the organization intends to undertake in the next year and the measures for their expected accomplishment. Each of these is likely to be part of internal documentation that is available to the internal auditor. When an organisation creates

5152-502: The business needs, an adviser can decide what kind is proprietorship will be most suitable. General partners in a partnership (other than a limited liability partnership), plus anyone who personally owns and operates a business without creating a separate legal entity, are personally liable for the debts and obligations of the business. Generally, corporations are required to pay tax just like "real" people. In some tax systems, this can give rise to so-called double taxation , because first

5244-455: The business's value: financial resources, capital (tangible resources), and human resources . These resources are administered in at least six functional areas: legal contracting, manufacturing or service production, marketing, accounting, financing, and human resources. In recent decades, states modeled some of their assets and enterprises after business enterprises. In 2003, for example, China modeled 80% of its state-owned enterprises on

5336-526: The case of pipes, firms create goods and services, push them out and sell them to customers. Value is produced upstream and consumed downstream. There is a linear flow, much like water flowing through a pipe. Unlike pipes, platforms do not just create and push stuff out. They allow users to create and consume value. Alex Moazed, founder and CEO of Applico , defines a platform as a business model that creates value by facilitating exchanges between two or more interdependent groups, usually consumers and producers, of

5428-487: The characteristics of Web 2.0. He also emphasized that Business Model 2.0 has to take into account not just the technology effect of Web 2.0 but also the networking effect. He gave the example of the success story of Amazon in making huge revenues each year by developing an open platform that supports a community of companies that re-use Amazon's on-demand commerce services. Jose van Dijck (2013) identifies three main ways that media platforms choose to monetize, which mark

5520-408: The charter documents and partly by the law of the jurisdiction where the entity is organized. Generally speaking, shareholders in a corporation, limited partners in a limited partnership, and members in a limited liability company are shielded from personal liability for the debts and obligations of the entity, which is legally treated as a separate "person". This means that unless there is misconduct,

5612-603: The company at hand. For example, if a corporation receives many positive reviews on a website such as Yelp, it may help to drive traffic to the company. Aggregation of data is a common C2B practice done with many internet corporations. In this instance, the consumer is creating the value of personal information and data to better target them to the correct advertisers. Businesses such as Facebook, Twitter, and others utilize this information in an effort to facilitate their B2B transactions with advertisers. Most of these systems cannot be fully utilized without B2C or B2B transactions, as C2B

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5704-484: The company from any issues that may arise in the future. Some of the most common activities conducted by those working in HR include increasing innovation and creativity within a company, applying new approaches to work projects, and efficient training and communication with employees . Two of the most popular subdivisions of HR are Human Resource Management , HRM, and Human Resource Information Systems , or HRIS. The HRM route

5796-600: The concept of business model in the context of reporting a lessor's lease income and lease expense within their joint project on accounting for leases. In its 2016 lease accounting model, IFRS 16 , the IASB chose not to include a criterion of "stand alone utility" in its lease definition because "entities might reach different conclusions for contracts that contain the same rights of use, depending on differences between customers' resources or suppliers' business models." The concept has also been proposed as an approach for determining

5888-412: The consumers willingness to negotiate price, contribute data, or market to the company. Consumers profit from direct payment of the reduced-price goods and services and the flexibility of the transaction the C2B market created. Consumer to business markets have their downfall as well. C2B is still a relatively new business practice and has not been fully studied. One weakness of the consumer-business model

5980-492: The context of accounting for purposes of public reporting. According to the Oxford English Dictionary, the term "business model", a compound of business and model , was first used in 1832 in the sense of "a plan for the operation of a business". Over the years, business models have become much more sophisticated. The bait and hook business model (also referred to as the " razor and blades business model " or

6072-499: The context. BMA can be innovative or not, depending on the degree of novelty of the changes implemented. As a consequence of the new context, several business model elements are promoted to answer those challenges, pivoting the business model towards new models. Companies adapt their business model when someone or something such as COVID-19 has disrupted the market. BMA could fit any organization, but incumbents are more motivated to adapt their current BM than to change it radically or create

6164-579: The corporation pays tax on the profit, and then when the corporation distributes its profits to its owners, individuals have to include dividends in their income when they complete their personal tax returns, at which point a second layer of income tax is imposed. In most countries, there are laws that treat small corporations differently from large ones. They may be exempt from certain legal filing requirements or labor laws, have simplified procedures in specialized areas, and have simplified, advantageous, or slightly different tax treatment. "Going public" through

6256-475: The design logic, George and Bock (2012) use case studies and the IBM survey data on business models in large companies, to describe how CEOs and entrepreneurs create narratives or stories in a coherent manner to move the business from one opportunity to another. They also show that when the narrative is incoherent or the components of the story are misaligned, that these businesses tend to fail. They recommend ways in which

6348-491: The early history of business models it was very typical to define business model types such as bricks-and-mortar or e-broker. However, these types usually describe only one aspect of the business (most often the revenue model). Therefore, more recent literature on business models concentrate on describing a business model as a whole, instead of only the most visible aspects. The following examples provide an overview for various business model types that have been in discussion since

6440-427: The entrepreneur or CEO can create strong narratives for change. Berglund and Sandström (2013) argued that business models should be understood from an open systems perspective as opposed to being a firm-internal concern. Since innovating firms do not have executive control over their surrounding network, business model innovation tends to require soft power tactics with the goal of aligning heterogeneous interests. In

6532-671: The first stage of development of a potential new service or product. Research and development are very difficult to manage since the defining feature of the research is that the researchers do not know in advance exactly how to accomplish the desired result. Injuries cost businesses billions of dollars annually. Studies have shown how company acceptance and implementation of comprehensive safety and health management systems reduce incidents, insurance costs, and workers' compensation claims. New technologies, like wearable safety devices and available online safety training, continue to be developed to encourage employers to invest in protection beyond

6624-458: The invention of term business model : Other examples of business models are: Technology centric communities have defined "frameworks" for business modeling. These frameworks attempt to define a rigorous approach to defining business value streams. It is not clear, however, to what extent such frameworks are actually important for business planning. Business model frameworks represent the core aspect of any company; they involve "the totality of how

6716-405: The issue through personal recommendations from friends or influencers on social media platforms, which can serve as a more subtle form of advertisement. Finally, a third common business model is monetization of data and metadata generated from the use of platforms. Malone et al. found that some business models, as defined by them, indeed performed better than others in a dataset consisting of

6808-475: The largest U.S. firms, in the period 1998 through 2002, while they did not prove whether the existence of a business model mattered. In the healthcare space, and in particular in companies that leverage the power of Artificial Intelligence, the design of business models is particularly challenging as there are a multitude of value creation mechanisms and a multitude of possible stakeholders. An emerging categorization has identified seven archetypes. The concept of

6900-683: The measurement and classification when accounting for insurance contracts . As a result of the increasing prominence the concept of business model has received in the context of financial reporting, the European Financial Reporting Advisory Group (EFRAG), which advises the European Union on endorsement of financial reporting standards, commenced a project on the "Role of the Business Model in Financial Reporting" in 2011. Business model design generally refers to

6992-566: The minimum wage, as well as unions , worker compensation, and working hours and leave. Some specialized businesses may also require licenses, either due to laws governing entry into certain trades, occupations or professions, that require special education or to raise revenue for local governments. Professions that require special licenses include law, medicine, piloting aircraft, selling liquor, radio broadcasting, selling investment securities, selling used cars, and roofing. Local jurisdictions may also require special licenses and taxes just to operate

7084-488: The original meaning which referred literally to going to a market to buy or sell goods or services. Marketing tactics include advertising as well as determining product pricing . With the rise in technology, marketing is further divided into a class called digital marketing . It is marketing products and services using digital technologies. Research and development refer to activities in connection with corporate or government innovation. Research and development constitute

7176-399: The owner's own possessions are strongly protected in law if the business does not succeed. Where two or more individuals own a business together but have failed to organize a more specialized form of vehicle, they will be treated as a general partnership. The terms of a partnership are partly governed by a partnership agreement if one is created, and partly by the law of the jurisdiction where

7268-451: The owners and members. Forms of business ownership vary by jurisdiction , but several common entities exist: Less common types of companies are: "Ltd after the company's name signifies limited company, and PLC ( public limited company ) indicates that its shares are widely held." In legal parlance, the owners of a company are normally referred to as the "members". In a company limited or unlimited by shares (formed or incorporated with

7360-433: The partnership is located. No paperwork or filing is necessary to create a partnership, and without an agreement, the relationships and legal rights of the partners will be entirely governed by the law of the jurisdiction where the partnership is located. A single person who owns and runs a business is commonly known as a sole proprietor , whether that person owns it directly or through a formally organized entity. Depending on

7452-504: The perspectives of design themes and design content. Design themes refer to the system's dominant value creation drivers and design content examines in greater detail the activities to be performed, the linking and sequencing of the activities and who will perform the activities. Developing a framework for business model development with an emphasis on design themes, Lim (2010) proposed the environment-strategy-structure-operations (ESSO) business model development which takes into consideration

7544-476: The platform. This infrastructure enables interactions between participants. The magnet creates pull that attracts participants to the platform. For transaction platforms, both producers and consumers must be present to achieve critical mass. The matchmaker fosters the flow of value by making connections between producers and consumers . Data is at the heart of successful matchmaking, and distinguishes platforms from other business models. Chen (2009) stated that

7636-925: The regulatory authority is the Monetary Authority of Singapore (MAS), and in Hong Kong, it is the Securities and Futures Commission (SFC). The proliferation and increasing complexity of the laws governing business have forced increasing specialization in corporate law. It is not unheard of for certain kinds of corporate transactions to require a team of five to ten attorneys due to sprawling regulation. Commercial law spans general corporate law, employment and labor law , health-care law, securities law, mergers and acquisitions, tax law, employee benefit plans, food and drug regulation, intellectual property law on copyrights, patents, trademarks, telecommunications law, and financing. Other types of capital sourcing include crowdsourcing on

7728-409: The relationship is important to both participants. Data and analytics are going to drive the C2B world and enable companies to gain a better understanding of customers. Businesses need to go back to what drives the sales, people. Move away from innovation and the newest technology and go back to who, what, and why of the people interacting with businesses. The technology industry has largely adopted

7820-420: The reputation of the exchange or particular market of exchange. Private companies do not have publicly traded shares, and often contain restrictions on transfers of shares. In some jurisdictions, private companies have maximum numbers of shareholders. A parent company is a company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors;

7912-485: The second company being deemed as a subsidiary of the parent company. The subsidiary company can be allowed to maintain its own board of directors. The definition of a parent company differs by jurisdiction, with the definition normally being defined by way of laws dealing with companies in that jurisdiction. Accounting is the measurement, processing, and communication of financial information about economic entities such as businesses and corporations . The modern field

8004-415: The tooling company Hilti shifted from selling its tools to a leasing model. They suggested that the differences are so profound (for example, lack of resource in the former case and inertia and conflicts with existing configurations and organisational structures in the latter) that it could be worthwhile to adopt different terms for the two. They suggest business model design to refer to the process of crafting

8096-494: The use of information technology and computer systems in support of enterprise goals. The role of a chief information officer is to lead this department. For example, Ford Motor Company in the United States employs "more than 3,000 team members with advanced computing, analytical and technical skills". Manufacturing is the production of merchandise for use or sale using labour and machines , tools , chemical and biological processing, or formulation. The term may refer to

8188-424: The use of consumer-to-business strategies, with social media corporations taking a large part in that growth. For example, companies such as Yelp or TripAdvisor provide a C2B service due to the amount of personal data harvested for use in targeting possible advertising clients. C2B can also be theorized, in the case of review aggregators, to increase the revenue of businesses through more overall knowledge about

8280-401: The world. Companies are also sometimes distinguished into public companies and private companies for legal and regulatory purposes. Public companies are companies whose shares can be publicly traded, often (although not always) on a stock exchange which imposes listing requirements / Listing Rules as to the issued shares, the trading of shares and a future issue of shares to help bolster

8372-444: Was employed by Adobe , a software developer that gave away its document reader free of charge but charged several hundred dollars for its document writer. In the 1950s, new business models came from McDonald's Restaurants and Toyota . In the 1960s, the innovators were Wal-Mart and Hypermarkets . The 1970s saw new business models from FedEx and Toys R Us ; the 1980s from Blockbuster , Home Depot , Intel , and Dell Computer ;

8464-510: Was established by the Italian mathematician Luca Pacioli in 1494. Accounting, which has been called the "language of business", measures the results of an organization's economic activities and conveys this information to a variety of users, including investors , creditors , management , and regulators . Practitioners of accounting are known as accountants . The terms "accounting" and "financial reporting" are often used as synonyms. Commerce

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