A business model is most essential to entrepreneurs. My favorite description of a business model is that it provides framework, where entrepreneurs can analyze their business plans and look for other ways for their companies to function and grow profitably while building barriers to ward off competitors. Although this is a long a boring definition, I think this is most useful is because there are several parts.

1. Analyzing your business plans and look for ways to be more efficient, and other opportunities that can make your business even more profitable.
2. While analyzing the business plans, you can see if there are competitors that are a threat to your company and see how you can build barriers to prevent them from overpowering you.

I wanted to speak about the two tools that are used for designing business models, which are called “The Five Component Model” and “The Business Model Canvas”.  To me I believe these two are very similar. The Five Component Model, is mainly made up of five parts as the title of the tool suggests, which are product/service, audience, company structure, finances, and strategy.  Whereas the business model canvas is made of nine parts. I believe that the business model canvas goes more in depth about the audience in which your product or service is useful to.  They specify in who the customer is, and how does our product/service contribute to them, how the company as a whole relates to these customers.  The similarities between these two models is that they both include who the audiences are, how the company will be structured and also how the finances will be managed.  One difference that the business model canvas has is the complex supply chain. This part specifies who our key partners would be if the company started. This is very important because knowing the competition is one thing, but knowing your business partners, supplier, and other affiliates is most important as you will have to deal or answer to them often.

Greif packaging had was a very smart company. They reanalyzed their company and the industry they were in. They pretty much saw that they were putting more risk into the company then getting revenue out of it. So the smart thing they did was reanalyze their company and listened to their customer needs.  With the information they had collected, they were able to create a new company, that solved the problems and generate more revenue. Greif converted their business model into a trip leasing company.  Now, it solves all the problems their customers were having(supply, transportation, cleaning).