4.2. Introduction to Business Models

Key learning outcomes

• To provide in depth understanding of a traditional business model

• To introduce the sustainable business model

• To draw conclusions on sustainable business practices in consideration with stakeholders’ management

Originally, business models are described as „a company's plan for making a profit”. It identifies the products or services the business plans to sell, its identified target market, and any anticipated expenses.

Conventional business models focus one-dimensionally on the financial aspect of businesses and almost exclusively on the perspective of one organisation, losing broader interlinks of the company to the environment and society. So, traditionally, the emphasis is on describing how financial value is created for the organisation itself.

In a broader sense a business model describes how an organisation creates, delivers, and captures value, in economic, social, cultural or other contexts. An organisation can also create social and ecological values. This, so called multiple value creation, stays in the core of sustainable approach to the business modelling and performance.