Answer the following: (_/7

a)- Business Model-

Business model is a framework which demonstrate the theory and the practice about the company's creating and capturing value.

Elements of Business model-

1- Market segment-

Market segment is an important element which is useful in capturing the value of new product for very different reasons like change in the development of the product and services.

2- Value Proposition-

Here value proposition mean the benefits customers would get from using their products and services and why customers must select their products and services over others competitors.

3- Profit and cost model/ Revenue Model-

A company should account an clear mindset for the method they are going to use to make profit and cost of the product and services.

4- Competitive advantages-

It would help the company in better understanding of the factors that diffrentiate the business from its competition. It will encourage customers to purchase the company's products and services.

5- Room for Innovation-

Creative ideas and innovation approaches can come from almost anywhere from your customers, target groups, partners and employees.

b)- Some of the methods used for evaluating the online start up companies are as follows:-

1- Customer conversion rate-

After the visitor are on website, the next target is to convert those visitor into your customers.

Formula = No. of signups per month/ monthly uniue visitors per month

2- Average order value-

In online business it is important to measure the number of paid orders which helps in generating the revenue for the current financial year.

Example- A website has Rs 10 lakh in revenue and 10,000 orders in 2020. The average order value is equal to Rs 100.

3- Churn rate-

It is a rate which describes those customers who moving out of the business.

Formula= No. of lost customers/ total customers

Example- A company had 10,000 customers last year, adds 1,000 customers this year and at the end of this year has 8,000 customers.

The Churn rate will be = [(10,000-8,000+1000)/10,000]*100

= 30%