My name is Steve Chen, a fellow member of ACCA and course director at APC ( teaching ACCA online courses to students from all around the world. This article will explain the topic ‘Business Model in ACCA Strategic Business Leader (SBL) paper.

Business model means how the business works, and this is quite straightforward. However, in the real-life, there are many ways the business could work to gain revenue. In the exam, it is always important to bear this in mind. When you see an exam question asking you to provide suggestions, you can always think about Business Model as a practical solution or suggestion provided to the examiner.

There are many business models, and in this article, I will explain two common business models.

  1. Free + Premium model

It means business provides free access to basic services with additional fees to be paid if other services to be used. A typical example is the Financial Times (FT) which provides free of charge articles (such as what I did here at ACCA APC, and if you want to subscribe to other services such as premium articles in FT, you need to pay.

This is a fantastic way to drive traffic to the business, and from these potential customers, some of them will evenly become paid customers if they find those free-of-charge resources useful. This is a way to perform ‘experiential marketing’ activities.

  1. No frills model

It means that businesses focus on basic items at low price. This is quite common in budget airlines and hotels where only basic service (flight service) is provided and if you want additional services such as food and drinks, you need to pay. This is also common in fast-food restaurants such as McDonald’s as these are standardised restaurants with low prices, unlike high-end restaurants where customers have to be served.

In the SBL exam, do make sure to be practical rather than focus on the theory. Again, in my ACCA SBL course, I will provide you with my own study text with lots of practical examples in there and you can directly apply it them in your SBL exam.

I hope this article helps regarding the topic of business model. In addition to providing ACCA lectures online, I also wrote articles in ACCA AB magazine. Besides, I am the author of four accounting books. If you are interested in studying ACCA courses with me, please visit my website for further information, where you can find many of my ACCA demo video lectures.

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