A business model is a plan an organization harnesses to generate money. It explains how a business renders its products or services to consumers at a reasonable price (Massa et al., 2017). Apple is one of the largest company worldwide, its business model consists of explanation of services and products the company plans to sell, market target, and all the necessary expenses. The company’s business model helps it to test, experiment, and model different methods to structure expenses and revenue streams. Apple business model indicates that a good business model serves as the foundation for setting milestone, building financial forecasts, and creating a baseline for revisiting the company’s business plan. A business model can be grouped into three key components. First, cost of production; under this category, the cost of raw materials, labor, manufacturing, and design are determined. Second category is the cost of selling the product, which includes; distribution, marketing, processing the sale, and delivering a service. Last category consists of how and the amount the consumer pays; this is where the company plans for payment methods, timing, pricing strategy, etc. Different business models include; advertising, brokerage, affiliate, customization, crowdsourcing, fractionalization, franchise, market price, etc.
Business plan shows the company’s strategy and forecasted financial performance for the coming years. Business plan and business model are fundamental elements to the company’s development, decision making, growth, and succession planning. Suppose the business plan is the company’s map that explains the amount of profit the company aims to get at a given period; the business model, on the other hand, is the vehicle that takes the company there. Business model covers customer relationships, company activities, assets, and the main partners that help organizations retain their customers, core value, and employees.