Three companies.
Different ways to do business.

Money a business earns before subtracting expenses.

Example: Apple earns revenue from devices and services.

What remains after expenses are subtracted from revenue.

Example: High sales alone do not guarantee high profit.

How a business creates value, delivers it, and earns money.

Example: Netflix offers entertainment through paid subscriptions.

A recurring payment for continued access to a product or service.

Example: Netflix members pay monthly.

An arrangement that gives customers access to specified benefits, often for a fee.

Example: Costco members pay for access to its shopping benefits.

Connected products and services that work together.

Example: Apple connects devices, software, and services.

Profit expressed as a percentage of revenue. Different margins include different expenses.

Example: A hypothetical business with $10 profit on $100 revenue has a 10% margin.

Cost advantages that can arise as a business operates at a larger scale.

Example: A larger audience can spread a show's production cost across more viewers.

A strength that helps a business compete effectively.

Example: Costco's buying power supports its low-price strategy.

Money, time, or effort involved in moving to another provider.

Example: Moving data and learning new software can make changing devices harder.

The network that moves materials and products from suppliers to customers.

Example: Apple coordinates component suppliers and manufacturing partners.

Keeping existing customers over time.

Example: New content can give Netflix viewers a reason to stay.