A COMPREHENSIVE DISCUSSION
OF
THREE FUNDAMENTAL BUSINESS
CONCEPTS
Business Model, Business Ownership and Management, and Feasibility Study
An Academic Exploration
Name: Bethel Grace Unyene
Reg number; G2024/MED/CSET/015
To
Dr Prince Igwe
Prof Adanma Ohia
Dr Chinyere
December, 2025
Business Concepts: A Comprehensive Discussion
CHAPTER THREE: BUSINESS MODEL
Introduction
Steve Blank's observation that startups fail not because they lack a product but because they
lack customers and a profitable business model captures the essence of contemporary
entrepreneurial thinking. A business model describes how an organisation creates, delivers,
and captures value. It serves as the blueprint outlining how a company intends to generate
revenue while providing value to customers. The concept has evolved from boardroom
abstraction to a structured analytical framework that scholars and practitioners employ to
understand organisational success and failure (Osterwalder and Pigneur, 2010; Teece, 2018).
The business model occupies an intermediate position between strategy and operations (Zott,
Amit and Massa, 2011). While strategy concerns competitive positioning, and operations deal
with daily execution, the business model translates strategic intent into operational reality.
Snihur and Eisenhart (2022) argue that business models are rapidly replacing strategy as the
primary source of competitive advantage, particularly in digitally-enabled environments.
Definitions and Components of Business Models
Scholars have offered various definitions. Teece (2010) described business models as the
architecture of value creation, delivery, and capture mechanisms. Osterwalder and Pigneur
(2010) defined it as the rationale of how an organisation creates, delivers, and captures value.
Foss and Saebi (2017) synthesised the literature to suggest that a business model represents
how a company conducts business, encompassing interactions with customers, partners, and
stakeholders.
A well-designed business model comprises several interrelated components. The value
proposition articulates what unique value the company offers and how it distinguishes itself
from competitors. Customer segments identify which customers the firm serves, recognising
that different groups have distinct needs. Channels describe how a company reaches
customers, while customer relationships outline the types of relationships established with
specific segments. Revenue streams represent the cash generated from each segment. Key
resources describe essential assets, key activities identify crucial operations, and key
partnerships outline the network of suppliers and partners. The cost structure describes all
costs incurred to operate the model.
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The Business Model Canvas: Netflix and Chevron
The Business Model Canvas (BMC), developed by Osterwalder and Pigneur (2010), presents
nine interconnected building blocks enabling practitioners to visualise and test business
models systematically. Netflix exemplifies effective business model design. By 2024, Netflix
achieved over 301.6 million paid memberships globally, with annual revenue reaching $39
billion (IIDE, 2025). Its value proposition centres on unlimited on-demand access to quality
entertainment, using tiered pricing from $6.99 (ad-supported) to $17.99 (premium). Key
activities include content acquisition, original production, and sophisticated recommendation
algorithms. Key resources encompass its content library, technology infrastructure, and data
analytics capabilities.
Chevron Corporation represents a contrasting model as an integrated energy company. In
2023, Chevron achieved its highest annual production, delivering over one million barrels of
oil equivalent daily, operating in more than 180 countries. Its value proposition emphasises
reliable energy supply and technological innovation. The company allocated approximately
$16 billion in capital investments for 2024, with 80% directed to upstream operations. About
$2 billion annually supports lower-carbon initiatives, planned to increase to $10 billion by
2028, reflecting gradual transition toward sustainable energy sources.
Business Model versus Strategy, and Theoretical Perspectives
The distinction between business model and strategy is subtle but important. Strategy
concerns where to compete and how to win, focusing on competitive positioning. The
business model describes the logic of value creation and capture, regardless of competitive
dynamics. A company might have brilliant strategy but flawed business model, or vice versa.
Netflix's subscription-based streaming model proved superior to Blockbuster's retail rental
model, despite Blockbuster's stronger brand recognition.
The Resource-Based View (RBV) emphasises that competitive advantage stems from
valuable, rare, inimitable, and non-substitutable resources. From this perspective, business
models articulate how companies leverage unique resources to create value. Transaction Cost
Economics (TCE) focuses on costs of conducting transactions in markets versus within firms,
helping explain choices regarding vertical integration, outsourcing, and partnerships.
Chevron's integrated model reflects decisions to internalise activities that could theoretically
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be conducted through market transactions, reducing transaction costs while providing greater
value chain control.
Business Model Failure, Dark Side, and Innovation
Business models fail for various reasons: poor value propositions, misalignment between
components, inadequate revenue models, and failure to adapt to changing circumstances.
Kodak's reluctance to embrace digital photography exemplifies how rigid adherence to
existing models proves fatal when environments change. The COVID-19 pandemic exposed
vulnerabilities in business models wholly dependent on physical retail (Brandtner and
Freudenthaler-Mayrhofer, 2020).
Business models can have negative consequences. Some exploit information asymmetries,
taking advantage of customer ignorance. Digital models may rely on addictive features
maximising engagement at users' expense. Models can impose costs on society not reflected
in company accounts. Interest in sustainable and circular business models reflects concern
about negative externalities and desires to design models creating value without destroying it
elsewhere (Geissdoerfer et al., 2020).
Business model innovation changes the fundamental logic of value creation and capture.
Drivers include technological change, shifting customer preferences, regulatory changes, and
competitive pressure. Enablers include dynamic capabilities, supportive leadership, and
experimental culture. Barriers include cognitive constraints, organisational inertia, and
resource constraints. Signs that innovation is needed include declining margins despite
increasing efficiency, market share loss to new entrants with different models, and
technological developments enabling new value creation methods.
CHAPTER FOUR: BUSINESS OWNERSHIP AND MANAGEMENT
Introduction
Launching a business can be both thrilling and dangerous, like living without a safety net.
Across the world, increasing numbers of individuals are achieving their aspiration for owning
and operating their own businesses. The degree of interest in entrepreneurship as occupation
is very high in this present dispensation. As a consequence, the entrepreneurial spirit is now
the most significant desire for economic development needed for reshaping the environment,
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thereby creating a world in which businesses can influence and contribute to active world
economy.
Defining Business and Management
A business is an organisation or entity engaged in commercial, industrial, or professional
activities with the aim of generating profit. It involves the production, distribution, or sale of
goods and services to meet customer needs. Management, on the other hand, refers to the
process of planning, organising, leading, and controlling organisational resources to achieve
objectives efficiently and effectively. While business focuses on what the organisation does,
management concerns how it is done. Effective management ensures that business activities
are coordinated, resources are optimally utilised, and goals are achieved within established
timeframes and budgets.
The Meaning of Business Ownership
Business ownership refers to the legal right to control and benefit from a business entity. It
encompasses the authority to make decisions about the business, the right to receive profits,
and the responsibility for liabilities. Ownership structures determine how businesses are
taxed, how profits are distributed, and what personal liability owners face. The form of
ownership chosen significantly impacts the business's operations, growth potential, and risk
exposure (Conklin, 2023). When beginning a business, entrepreneurs must decide what form
of business entity to establish, as this determines which income tax return form to file and
affects legal and financial considerations.
Forms of Business Ownership
The sole proprietorship is a business owned by one person, with no distinction between the
owner and the business entity. It is the simplest and least costly form to establish. The owner
has complete control over all business decisions and receives all profits. However, the sole
proprietor faces unlimited liability, meaning personal assets may be used to pay business
debts. The business exists only as long as the owner is alive and actively running it. Sole
proprietors report business income on Schedule C of their personal tax return (IRS Form
1040).
A partnership involves two or more persons who agree to carry on a business for profit.
Partners contribute capital and divide profits according to agreed terms. In general
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partnerships, all partners face unlimited liability. Limited partnerships include at least one
limited partner whose liability is restricted to their investment. Partnerships benefit from
combined resources, knowledge, and skills from multiple people. They are considered pass-
through entities where business income is taxed as income to the partners, avoiding double
taxation.
A corporation is a legal entity separate from its owners (shareholders), capable of entering
contracts, owning property, and incurring liabilities in its own name. Shareholders enjoy
limited liability, meaning their personal assets are protected from business debts.
Corporations can raise capital by issuing shares and have perpetual existence independent of
ownership changes. However, they face double taxation, with corporate income taxed at the
corporate level (21% federal rate in the United States) and again when distributed to
shareholders as dividends. Corporations require more formal structures, including boards of
directors and regular meetings.
Limited Liability Companies (LLCs) are hybrid forms combining characteristics of
corporations and partnerships. LLCs are not incorporated but owners enjoy limited liability
like corporations. They offer flexibility in taxation, choosing to be taxed as sole
proprietorships, partnerships, S corporations, or C corporations. Single-member LLCs default
to sole proprietorship taxation, while multi-member LLCs default to partnership treatment.
This flexibility makes LLCs attractive for many entrepreneurs seeking liability protection
without corporate formality.
Merits and Demerits of Ownership Forms
Sole proprietorships offer simplicity, complete control, minimal regulatory requirements, and
pass-through taxation avoiding double taxation. However, they face unlimited personal
liability, limited capital-raising ability, limited lifespan, and may struggle to attract talented
employees without equity incentives. Partnerships provide access to more capital and diverse
expertise, shared decision-making burden, and pass-through taxation. Their demerits include
potential conflicts between partners, unlimited liability for general partners, difficulty
transferring ownership, and automatic dissolution if partners leave.
Corporations provide limited liability, perpetual existence, easier capital raising through share
issuance, and transferable ownership. Their disadvantages include double taxation, complex
regulatory requirements, higher formation and operating costs, and less operational
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flexibility. LLCs combine limited liability with pass-through taxation, offering operational
flexibility and fewer formalities than corporations. However, they may face self-employment
taxes, varying state regulations, and potential difficulties raising capital compared to
corporations.
Critical Elements for Evaluating a Business
When evaluating a business, several critical elements warrant consideration. Financial
performance includes profitability, cash flow, revenue trends, and return on investment.
Market position encompasses market share, competitive advantages, brand strength, and
customer loyalty. Operational efficiency examines production processes, supply chain
management, and cost structures. Management quality assesses leadership capability,
strategic vision, and organisational culture. Risk factors include industry dynamics,
regulatory environment, and potential disruptions. Growth potential considers market
opportunities, scalability, and innovation capacity. These elements collectively provide a
comprehensive picture of business health and future prospects.
CHAPTER FIVE: FEASIBILITY STUDY
Introduction
If you embark on a journey to a particular destination through unknown, unpleasant, and
harmful areas, you would hope to go with someone who has map knowledge of the area, and
not with someone who does not believe in map knowledge or planning for a journey. Being
successful in business requires much more than a good business idea. Writing a business plan
derived from feasibility analysis is very important. It is obvious that writing a business plan is
cumbersome, which is why many entrepreneurs launch businesses without one, hoping to see
what happens rather than committing their time and resources to knowing their markets,
strategies, and finances. However, building a business plan requires hard work, and it is
through this same hard work that dividends are paid. Entrepreneurs who commit their time
and energy to having a business plan are better equipped to overcome environmental
challenges than those who do not.
The Meaning and Role of Feasibility Studies
A feasibility study is a comprehensive and systematic analysis and evaluation of a proposed
project, business venture, or initiative to determine its practicality, viability, and potential for
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success (Aninver, 2023). It involves thorough examination of various factors including
financial, technical, operational, legal, environmental, and market-related aspects. The
primary goal is to provide stakeholders with essential information and insights to make
informed decisions about whether to proceed with the project, abandon it, or make necessary
adjustments. A feasibility study is conducted before any money is committed to a new
business venture to see whether it is worth the time, effort, and resources.
Feasibility studies serve multiple important roles. They help identify potential risks and
challenges early, enabling proactive mitigation strategies. They provide objective assessment
of project viability, reducing the influence of optimism bias. They facilitate resource
allocation decisions by clarifying investment requirements and expected returns. They
support stakeholder communication by providing documented analysis for investors, lenders,
and partners. Studies have shown that aspects of feasibility studies are directly related to
successful implementation of business strategies (Chen, 2021; Bansal, 2023).
Feasibility Study versus Business Plan
While often confused, feasibility studies and business plans serve different purposes at
different stages. Feasibility studies are conducted before business plans, investigating
whether a project should proceed. Business plans are created after determining feasibility,
providing a roadmap for implementation. The feasibility study answers whether a venture is
workable and viable; the business plan answers how the venture will be executed. Feasibility
studies focus on assessment and evaluation; business plans focus on strategy and
implementation. The primary audience for feasibility studies includes decision-makers
determining whether to proceed, while business plans communicate vision and strategy to
investors, lenders, partners, and employees.
Conducting a Feasibility Study
Conducting a feasibility study involves several systematic steps. Initial project evaluation
defines the problem the project addresses or opportunity it seizes, ensuring goals are clear.
Technical feasibility assesses required technology, equipment, and resources, verifying that
technical requirements can be met effectively. Market feasibility analyses demand for the
product or service, market size, competition, customer needs, and market trends to determine
whether a viable market exists. Financial feasibility estimates costs of starting and operating
the business, projects revenues, and calculates return on investment.
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Operational feasibility examines whether the organisation can successfully implement the
project given its current capabilities, resources, and constraints. Legal and regulatory
feasibility reviews compliance requirements, permits, licences, and potential legal obstacles.
Environmental and social feasibility considers environmental impact and community effects.
Risk assessment identifies potential threats and develops mitigation strategies. The study
concludes with recommendations based on the assessment, stating whether the project is
feasible and worth pursuing or should be abandoned or modified.
Content of a Feasibility Study
A comprehensive feasibility study typically contains several key components. The executive
summary provides an overview of findings and recommendations. Market analysis evaluates
the target market, including size, growth potential, demographics, and competition. Technical
analysis assesses technology, equipment, and operational requirements. Financial analysis
includes projected income statements, cash flow projections, capital requirements, and
investment returns. Organisational analysis examines management capabilities and staffing
requirements. Risk analysis identifies potential risks and mitigation strategies. The
appendices contain supporting documentation including detailed financial spreadsheets,
market research reports, and technical specifications.
Breakeven Analysis
Breakeven analysis is a critical component of financial feasibility, determining the level of
sales at which a company will break even, having no profit or loss. The analysis helps
entrepreneurs understand fixed costs (expenses that remain constant regardless of production
volume, such as rent, salaries, and insurance) and variable costs (expenses that change with
production volume, such as raw materials and sales commissions). The contribution margin
per unit represents the excess revenue per unit over variable cost per unit.
The breakeven point formula is: Breakeven Point (units) = Fixed Costs ÷ (Sales Price per
Unit – Variable Cost per Unit). For example, if fixed costs total £300,000, the sales price per
unit is £85, and variable cost per unit is £50, the contribution margin is £35. The breakeven
point would be 8,571 units (£300,000 ÷ £35). Breakeven analysis enables smarter pricing
decisions, provides full financial understanding, establishes precise sales goals, and supports
better business decisions (SBA, 2024; Corporate Finance Institute, 2023). It is typically
required when seeking investors or debt financing.
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When breakeven points are deemed unsatisfactory, businesses can consider several strategies.
Increasing prices (while monitoring competitive positioning) improves contribution margins.
Reducing variable costs through supplier negotiations or process improvements lowers the
breakeven threshold. Reducing fixed costs through operational efficiency decreases the
minimum sales required. Changing product mix to emphasise higher-margin items improves
overall profitability. These adjustments help ensure business models achieve financial
sustainability.
Conclusion
The three chapters discussed represent interconnected foundations of entrepreneurial success.
A well-designed business model articulates how an organisation creates, delivers, and
captures value. The choice of business ownership structure determines legal, financial, and
operational frameworks within which the business operates. Feasibility studies ensure that
business ideas are thoroughly evaluated before significant resources are committed. Together,
these concepts provide a comprehensive framework for launching and sustaining successful
business ventures.
Entrepreneurs who invest time in understanding these fundamentals position themselves for
success. Business models must be continuously evaluated and adapted as markets evolve.
Ownership structures should be chosen thoughtfully, considering growth aspirations, risk
tolerance, and capital requirements. Feasibility studies should precede significant
investments, providing objective assessment of project viability. In an increasingly
competitive and dynamic business environment, these analytical tools and frameworks are
not optional luxuries but essential elements of entrepreneurial practice.
References
Aninver Development Partners (2023). Feasibility Study: Definition, Benefits and
Differences with a Business Plan. Available at: [Link]
study.
Bansal, R. (2023). Business feasibility analysis and implementation. Journal of Business
Strategy, 44(2), 112-128.
Brandtner, P. and Freudenthaler-Mayrhofer, D. (2020). The effects of COVID-19 pandemic
on business model elements. European Research Studies Journal, 23(4), 517-530.
Conklin, M. (2023). Introduction to Forms of Business Ownership. SSRN Electronic Journal.
DOI: 10.2139/ssrn.4581784.
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Corporate Finance Institute (2023). Break-Even Analysis: How to Calculate the Break-Even
Point. CFI Resources.
Foss, N.J. and Saebi, T. (2017). Fifteen years of research on business model innovation.
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Geissdoerfer, M., Pieroni, M.P.P., Pigosso, D.C.A. and Soufani, K. (2020). Circular business
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IIDE (2025). The Thrilling Business Model of Netflix 2025. Indian Institute of Digital
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[Link]
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