The more a business can automate its processes, the better it can scale. Automate processesĪn obvious point, but one that bears repeating. This is an important point since external resources will always exceed the internal resources a company has at its disposal. For example, Uber takes advantage of cars and drivers while the Android operating system utilizes phone manufacturers and software developers. The most successful proponents of the model leverage external resources. This can be achieved in the following ways: Leverage external resources

The scalable business model encourages businesses to be able to scale both internally and externally. The model can also be effective in the offline world provided the company has a quality product or service that can be standardized and sold to multiple customers. The scalable business model enables the company to grow without being constrained by its available resources. In other words, the unit cost of each coffee machine declines as the business expands. The retailer could sell 2,000 machines one month and 20,000 machines the next, but the cost of selling an extra 18,000 machines does not rise in accordance with the increase in sales. Companies with an online presence in particular are well suited to the model because the technology that underpins them is immaterial and can be scaled indefinitely.Ĭonsider the example of an online retailer selling coffee machines.

The most successful companies of the modern era can leverage business model scalability to increase their profit. Understanding a scalable business model.Digital Business Models Podcast by FourWeekMBA.Business Strategy Book Bundle By FourWeekMBA.An Entire MBA In Four Weeks By FourWeekMBA.100+ Business Models Book By FourWeekMBA.

Key processes business model examples