Explain the concept of 'business model'.

The concept of a 'business model' is fundamentally about how a company creates, delivers, and captures value in the marketplace. It serves as a blueprint for the organization and encompasses various components, including the target customer segments, value propositions, revenue streams, and the cost structure.

By defining how a business operates and generates revenue, a business model provides a framework that illustrates the methods a company employs to meet the needs of its customers while achieving profitability. This includes details on the products or services offered, distribution channels, customer relationships, and key resources and activities necessary for delivering value.

In essence, it outlines the mechanism through which a company plans to achieve its goals and sustain its competitive advantage. This holistic view of operational processes and strategic decisions is critical for long-term success and adaptability in a changing market. Thus, recognizing a business model as the framework for creating economic value emphasizes its integral role in the overall strategy and functionality of a business.