Editing Business model (section)

== History ==
According to the Oxford English Dictionary, the term "business model", a compound of [[business]] and [[model]], was first used in 1832 in the sense of "a plan for the operation of a business".<ref>{{cite web| url = https://doi.org/10.1093/OED/2631068139| title = s.v. business model (n.)| last1 = OED| first1 =| date = 2024-09-11| website = www.oed.com| publisher = Oxford English Dictionary (OED)| access-date = 2024-09-11| quote = }}</ref>

Over the years, business models have become much more sophisticated. The ''bait and hook'' business model (also referred to as the "[[razor and blades business model]]" or the "tied products business model") was introduced in the early 20th century. This involves offering a basic product at a very low cost, often at a loss (the "bait"), then charging compensatory recurring amounts for refills or associated products or services (the "hook"). Examples include: razor (bait) and blades (hook); cell phones (bait) and air time (hook); computer printers (bait) and ink cartridge refills (hook); and cameras (bait) and prints (hook). A variant of this model was employed by [[Adobe Systems|Adobe]], a software developer that gave away its document reader free of charge but charged several hundred dollars for its document writer.

In the 1950s, new business models came from [[McDonald's]] Restaurants and [[Toyota]]. In the 1960s, the innovators were [[Wal-Mart]] and [[Hypermarkets]]. The 1970s saw new business models from [[FedEx]] and [[Toys R Us]]; the 1980s from [[Blockbuster (movie rental store)|Blockbuster]], [[Home Depot]], [[Intel]], and [[Dell Computer]]; the 1990s from [[Southwest Airlines]], [[Netflix]], [[eBay]], [[Amazon.com]], and [[Starbucks]].

Today, the type of business models might depend on how technology is used. For example, entrepreneurs on the internet have also created new models that depend entirely on existing or emergent technology. Using technology, businesses can reach a large number of customers with minimal costs. In addition, the rise of outsourcing and globalization has meant that business models must also account for strategic sourcing, complex supply chains and moves to collaborative, relational contracting structures.<ref>Unpacking Sourcing Business Models: 21st Century Solutions for Sourcing Services, The University of Tennessee, 2014</ref>