Learn how there are only
four elemental business model categories and how they are applied to real firms


The Business Model Zoo™ identifies four elemental business model pathways for developing a business: product, solutions, matchmaking, multi-sided. Each pathway describes an ideal model of how a firm can engage with its customer, deliver value, and monetize the result. It is the differences in customer engagement that are key to understanding the differences between the four business model pathways.

Almost all economically sustainable business models – whether for profit or not-for-profit – fit into one of these categories. Our Zoo™ contains 92 exemplar business model cases, encompassing (a) Unicorn companies (recent start-ups with valuations of more than $1 billion), (b) Tech City’s "Future Fifty" (UK recently founded high potential enterprises with sales growth of more than 30% a year) and (c) other prominent firms that show how our categories are enacted in the real world.

For more information on "Future Fifty" companies:



The 4 Business Model Categories


01.

PRODUCT
MODEL

The company develops a product or standardized service and sells it to customers. The value proposition is transactional: to provide a product or standardized service that customers will buy.

02.

SOLUTIONS
MODEL

The company engages with a customer about a problem the customer faces, and provides an integrated solution. The value proposition is relational: to tailor solutions to each customer.

03.

MATCHMAKING
MODEL

The company joins buyers and sellers in its online or physical marketplace. The value proposition is transactional: to facilitate exchange.

04.

MULTI-SIDED
MODEL

The company provides different products or services to different customer groups. The value proposition is multi-sided: one customer group gets additional benefits from the other group’s transactions.

Let us help you understand the business models better by checking out our library of exemplars:

Competitive Dynamics of Business Models

All industries contain a wide variety of business model types, although some may dominate. The four types compete/collaborate with each other in the manner explained below.


01.

PRODUCT
MODEL

For new firms operating a product business model: (a) a matchmaker can act as an complementor while (b) a multi-sided business model may embody a competitor.

Established product firms compete with matchmakers, multi-sided and new product firms.

02.

SOLUTIONS
MODEL

Established solutions firms compete with new solutions firm.

03.

MATCHMAKING
MODEL

Firms operating a matchmaking business model complement a new firm’s product business model –in other words, they feed the business.

They also compete with an established firm’s product business model.

04.

MULTI-SIDED
MODEL

Firms operating a multi-sided business model will compete complement other firms’ solutions business model.

They also compete with product business models.

A firm can enact a portfolio of several business models

Most companies own and operate many different businesses, each of which may have a different business model

An automobile company offers a product as its core business model; but most companies also offer after-sales-service, another business model (Solutions) in its portfolio.

A marketing consulting company uses a service- work-for-hire business model; but many also sell the results of surveys as products, a different business model (Product) in the company’s overall portfolio.

Below is an idealized firm enacting four business models with four divisions. Click on it to read more.

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An industry may accommodate a variety of business models

Most industrial contexts consist of companies which operate different business models

In the Finance industry, companies enable customers to borrow and lend money through a product business model (bank) and a match-making business model (peer to peer).

In the Media industry, companies can engage in both a multi-sided business model (advertisement) and a product business model (films, games) in creating entertainment value.

We have further categorized our Zoo™ of business model exemplars under the six industry sectors within which they operate: Finance, Retail, Marketing, IT, Travel and Media. These Industry Maps illustrate the diversity of each industry's business model landscape. Each column represents one of the four business model types; the size of the company name is contingent upon its valuation.

Business Model Change

If you are a wholly digital company, it may be easy to change your business model ; however getting happy customers who p ay be hard – e.g., Google operated a product business model and subcontracted to Yahoo before it became a multi-sided giant.

If you are a physical company, changing business models may be very hard – e.g., self-service to full service.

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Why Use The Business Model Zoo™?

Our elemental business models are “ideal types”; real world business models are different – because of context. Our Business Model Zoo™ contains many examples that show how firms (often famous ones) actually build and deploy business models in different industries and for different products and services.

Studying our Business Model Zoo™ allows you to:

- deepen your understanding of how the elemental categories are deployed in the real world,

- improve your appreciation of the DIFFERENCES between business model categories and improve your ability to DESIGN a better business model and,

- enhance your awareness of the competitive implications and dynamics across the business model categories, as illustrated in our Competitive Map.