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Types of Business Models

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Subscription Model

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A business model where customers pay a recurring fee at regular intervals for access to a product or service. Examples include Netflix, Spotify, and monthly software-as-a-service (SaaS) subscriptions like Adobe Creative Cloud.

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Freemium Model

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A business model where basic services are provided free of charge, but additional features and services cost money. Examples include LinkedIn, Dropbox, and many mobile app games.

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Advertising Model

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A business model that provides content or services free of charge and generates revenue from advertising. Examples include Google, Facebook, and television networks.

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Direct Sales Model

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A business model where goods or services are sold directly to consumers without intermediaries. Examples include Apple (when selling products through its own stores), Tupperware, and Avon.

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Franchise Model

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A business model where a company licenses its business operations and brand for a franchisee to operate under the company's name. Examples include McDonald's, Subway, and 7-Eleven.

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Affiliate Model

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A business model where a company pays external entities to drive traffic or sales to its products or services. Examples include Amazon Associates, marketing bloggers, and coupon sites.

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Razor and Blades Model

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A business model where a company sells a durable product at a low price (the razor) and generates recurring revenue from consumables (the blades). Examples include Gillette razors and Keurig coffee pods.

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Peer-to-Peer Model

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A business model that facilitates transactions between individuals without the need for a central intermediary. Examples include eBay, Airbnb, and Uber.

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Leasing Model

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A business model where a company owns an asset and allows customers to use it for a specific period in exchange for a rental fee. Examples include car leasing companies like BMW Financial Services and equipment leasing.

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Licensing Model

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A business model where a company grants permission to another company to use its intellectual property in exchange for royalties or a licensing fee. Examples include Microsoft software licenses and Disney merchandising.

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