CFA L1 / Corporate / M7. Business Models
Module 7 · Corporate Issuers

Business Models

EN: Conceptual — how firms create and capture value.
VN: Khái niệm — doanh nghiệp tạo giá trị thế nào.

1. Business Model Components Concept

About: Four pieces — customer (who?), value prop (what?), value chain (how produced?), profit formula (how captured?). Frames how firms create + capture value.Tóm tắt: 4 phần: khách hàng, giá trị, chuỗi giá trị, công thức lợi nhuận.

Four building blocks

  • Customer Who is served? Segment, channel, relationship.
  • Value prop. What problem solved? What product/service?
  • Value chain How is it produced? Resources, partners, activities.
  • Profit form. How is value captured? Pricing, cost, margin, scaling.

2. Pricing Models Concept

About: Cost-plus, value-based, tiered/dynamic, subscription (predictable rev), freemium, razor-and-blade (cheap hardware + profitable consumables). Different models attract different segments.Tóm tắt: Cost-plus, value-based, tiered, subscription, freemium, razor-and-blade.
  • Cost-plus Set price = cost × (1 + markup).
  • Value-based Charge what customer is willing to pay.
  • Tiered / dynamic Different prices for different segments / over time.
  • Subscription Recurring fee — predictable revenue.
  • Freemium Free basic + paid premium.
  • Razor-and-blade Cheap hardware, profitable consumables.

3. Network Effects & Platform Models Concept

About: Direct (Facebook), indirect/two-sided (Uber, Airbnb), lock-in (switching costs). Network effects build moats and winner-take-all dynamics.Tóm tắt: Direct (FB), two-sided (Uber), lock-in. Tạo moat và winner-take-all.
  • Direct Value increases with users (Facebook, Twitter).
  • Indirect Two-sided platforms (Uber, Airbnb).
  • Lock-in Switching costs create stickiness.

Practice problem Practice

Practice problem

Spotify charges a flat monthly fee for unlimited music access. Which pricing model is this?

Show solution
Subscription: recurring fee for ongoing access.
Freemium also possible (free tier + paid premium); Spotify uses a hybrid.
Subscription model (with freemium component)