Subscription Model - Business Models And The Internet, Subscription-based Approaches

Subscription models are specific kinds of business models—tools used to describe how companies generate revenue. Business models describe how products, information, and other important elements flow, and what a company's role is during commerce. In the corporate world, there are many different ways to profit in the marketplace. Some companies sell products and services directly to consumers, some sell to other businesses, and some do both. Other companies simply are intermediaries that enable transactions between other parties, be they businesses or consumers. Because of this, there are a wide variety of different business models, from the simple and straightforward to the intricate. Companies, even those within the same industry, sometimes rely on very different business models. It is also common for a company to rely on a combination of different business models.

Although business models identify the general ways companies turn a profit, by themselves they do not necessarily map out a company's overall strategy. Specialized business models called marketing plans are used for that purpose. Marketing plans identify the specific situation a company finds itself in within a particular marketplace, the differentiating factors that set a company apart from the competition, and the individual marketing tactics used to accomplish strategic objectives.

At the heart of business models are different levels within supply chains or value chains. These chains outline the activities involved in creating value from the supply side of economics, where raw materials are used to manufacture a product, to the demand side when finished products or components are marketed and shipped to re-sellers or end-users. Companies review and analyze different steps in value chains to create optimal and effective business models, which may focus on one or more specific points within a chain.