Business models refer to the manner in which businesses are set up to create revenue and generate profits through their operations (Ayadi et al., 2016). This is as a result of subtracting the revenues made from the total cost of buying the products or raw materials to determine a number of profits made. Therefore the most important components of a business model are the costs of raw materials and the selling costs (Boons and Lüdeke-Freund, 2013). As a result of these two components, business can increase its prices and find its inventories at lower prices ultimately resulting in increased profits (Chesbrough, 2013). On the other hand, business disruptions can occur, which pose some challenges to the already established business model. Disruptions are described as events, circumstances, problems, or disturbances that interrupt an event or activity from taking place as scheduled (Shafer et al., 2005). These disruptions hinder the normal business operations from taking place. They can be caused by any number of reasons. For example, an activity may hinder a business of making profits within a stipulated period.
Example of Disruption
Businesses employ the use of business models to ensure that operations are running smoothly and in an organized manner. However, these business models often experience some disruptions that may arise from time to time (Matos and Silvestre, 2013). For example, Google has adopted the Free Model on its email service product. The company offers free email services to its clients in a bid to gather information from them and offer a platform for advertisers to gain access to these people. In this scenario, it means that the user is the product itself. The world of email provision services grew much faster because they are being offered for free. This new business model has disrupted a previous business model where consumers had to write and send letters manually to their intended consumers (Osterwalder and Pigneur, 2013). A letter had to be physically delivered to the intended message to be passed across. The development of the emailing technology disrupted this previous method of communication. Google had a new business model that was guaranteed to get them profits. Emails are a form of messages that are sent from one person to another through the internet and by the use of a computer device. By offering this free service, Google was able to capture consumer information for advertising purposes.