Cost Structure

•Definition: This describes the most important monetary consequences while operating under different business models. • What are the most important costs inherent in our business model? • Which Key Resources are most expensive? • Which Key Activities are most expensive? • Classes of Business Structures: • Cost-Driven - This business model focuses on minimizing all costs and having no frills • Value-Driven -Less concerned with cost, this business model focuses on creating value for their products and services Characteristics of Cost Structures: Fixed costs, Variable Costs, Economies of Scale, Economies of Scope