Understanding Your Business vs. Economic Model

Most clients I see can clearly articulate their Business Model, but struggle when it comes to describing their Economic Model.

Simply put:

• Business Model = customer-focused
• Economic Model = owner-focused.

Amazon and Wal-Mart share a similar low-cost, wide-selection retail model. However, their Economic Model is quite different, since one business is a virtual store and the other a physical store.

Within the Economic Model, there are four key elements:

• Revenue Drivers
• Volume
• Margin
• Operating Leverage

Do you differentiate your business model from your economic model?

IF YOU LIKE OUR CONTENT PLEASE SUBSCRIBE AND SHARE IT ON YOUR SOCIAL MEDIA CHANNELS. THANK YOU!