Interesting Business Models

Xerox – The original xerox copier machine was expensive compared to other copying alternatives. Xerox rented the machine to companies but the normal rate of copying was 15-20 copy per day and was not sufficient to ensure ROI. But after companies started using xerox machine the rate of copying went up to 2000 copy per day primarily due to its easy to use and better quality.

IBM – Primary revenue for IBM is software service and consulting for business segment.  IBM is a leading technology integrator and middleware software provider.  The profit margin in these segments is very high.

Southwest Airlines – SA is a low cost carrier that uses only Boeing 737 that helps reduce training and maintenance cost. It follows a point to point flight routine and uses secondary airports in major cities. The turn around time for its flight (turning the flight on runway for return trip) is lowest in the industry.  SA is the largest carrier in the world in terms of number of passengers carried per year.

Netflix – Offers monthly flat rate DVD and blueray discs online. Customer can have a fixed number of DVD’s simultaneously delivered and keep them as long as they want. Once the DVD’s are returned, next movie can be ordered. The discs are delivered in mail by united states postal service and ships 1.9 million discs per day. Customer doesn’t have to pay late fee or shipping fee.

Toyota – largest car manufacturer in terms of sales.  Toyota follows Kaizen principle to continuously improve quality at every level and involving everyone in the organization. If there is a defect in the production line, the worker is expected to stop production and fix the problem.  Quality improvement is eternal priority and the practise is inculcated at every level through trainings.  It has a lean manufacturing model with just in time inventory.