What does a business model express?

A business model expresses a target business state by outlining how an organization creates, delivers, and captures value. It serves as a blueprint for the company's strategy and operations, detailing the various components that contribute to financial sustainability and competitive advantage. This includes the identification of customer segments, value propositions, revenue streams, and the key activities necessary to support the business.

By defining a target business state, a business model helps stakeholders understand the organization's vision and how it plans to achieve its goals in the current market landscape. This is critical for aligning resources and efforts toward a common objective.

While historical perspectives, operational challenges, and financial forecasts are important elements of a business's overall strategy and performance assessment, they do not inherently convey the targeted direction or the strategic approach that a business model provides. Instead, they serve as complementary information that can influence or emerge from the implementation and evolution of the business model.