What is a business model?

A business model is essentially a comprehensive framework that details how a company operates, generates revenue, and serves its customers. It encompasses the value proposition offered to customers, the methods of delivering that value (such as sales channels and distribution), and how the business intends to capture value, typically through revenue streams.

This definition highlights the core components of a business: what it produces or offers, the means through which it provides that value to the customer, and how it ensures profitability. By outlining these aspects, a business model serves as a strategic guide for achieving long-term success and sustainability in the marketplace.

In contrast, the other options focus on specific areas that do not encompass the full scope of what a business model entails. Hiring staff, tracking employee performance, and reducing taxes are all important operational aspects, but they do not represent the holistic strategy that a business model provides for a company's overall functioning and value creation.