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"What is the best business model?" people ask me often. "What are the best business models we can learn from?" Actually, I believe there are many. But we stick to the same examples. Mostly Internet based models. But I believe there are more...
Mostly we look at the same models over and over such as Amazon, Spotify (free drives paid), Apple, Netflix, Hilti etc. But can we find more best business models? Can we find them in different industries?
Question for the Hub
I would really like to know what YOU consider the best business model. Please let me know what you think. I will make an overview and ranking based on your input.
Hi Philip, thanks for your reply. What do you like about their model especially when it comes to the 9 building blocks?
I find the variety of revenue streams the most compelling aspect of the Ryanair model. The most clever being airpost subsidies accounting for 22% of the revenue.
What do you like most?
What do you mean with the variety of revenue streams?
I did not say I like Ryan Air ;-) . But If you ask,.. When it comes to Ryan air I do like they made a difference in the airline industry by really really operate as a low cost leader. Their whole DNA is about low costs.
While Ryan Air is very good, I would also suggest reading the case study of Chilean carrier - LAN airlines. It was published in the latest HBR issue [Jan-Feb 2012]. The authors conclude,"The implementation of multiple business models is not a risk, but rather a new tool for strategists." http://hbr.org/2012/01/when-one-business-model-isnt-enough/
As opposed to an airline that is dependant on sales of flight tickets, Ryanair has revenue streams from airport subsidies, internet advertising,credit/debit card subsidies, in flight extras and preflight extras.
I agree what comes to the fore is the low cost DNA yet I consider the portfolio of revenue streams to be unique and providing options to diversify into further customer segments. What I am trying to convey is the consistent strong results are not driven by the low cost aspect in isolation and perhaps the future focus may be more on additional revenue streams.
Also the company is Irish so I have to admit a patriotic bias. However there are aspects of the operation which convey the "ugly face of capitalism".
Chris Anderson covered Ryanair business model in his book 'Free' as well. Following is the infographic from Page 19 of the book. http://www.wired.com/techbiz/it/magazine/16-03/ff_free_air
The following question on quora throws some further light on their numbers and their business model http://www.quora.com/How-much-profit-does-Ryanair-make-a-year-and-w...
Patrick, there are some excellent cases in this overview from Fast Company, see http://www.fastcompany.com/most-innovative-companies/2012/full-list,
Hi Wouter, that's great. What is your personal favorite and why?
Patagonia had a business model that goes further on sustainability than most, see their Common Threads Initiative for example. And the're growing and profitable.
Hi Wouter, just looked into Patagonia and did not hear about it before. Amazing concept. Really sustainable. Thx for sharing.
The ‘best business model’ is one which generates value for its stakeholders on a sustained basis. Few months back, I wrote a blog titled ‘Apple Business Model Score: 10 out of 10’, which assessed Apple’s business model on a 10-fold criterion outlined by Silicon Valley VC Bill Gurley in his blog post ‘All Revenue is not create equal – The keys to the 10x Revenue Club’. Check this post at http://jitendermiglani.wordpress.com/2011/08/11/apple-business-mode.... In my opinion, best business models are the ones which score maximum on the criterion outlined there.
On your second question, I believe that Alex did a fantastic job with the introduction of Business Model Patterns in the #bmgen book. Sometime back, somebody asked the following question on Quora: “What is the most interesting business model patterns you know?” Please check my answer over there: http://www.quora.com/What-is-the-most-interesting-business-model-pa.... Though the field of business model patterns is yet to evolve, I believe this will have the answer of what are the best business models we can learn from.
Personally, I am very impressed with ‘Multi-sided Platform’ business model patterns. I have found them applicable in different industries, not just technology industry. For example, VISA is a perfect example of multi-sided platform. It is one of my favorites as well. I have recently started writing a blog titled BMIMatters. Over the blog, I am going to illustrate business models of highly valued companies using the Canvas. I have recently written a blog post explaining Twitter business model. Please check it at http://bmimatters.com/2012/02/18/understanding-twitter-business-mod.... More case studies to come.