Cost Structures

Cost Structure

Describes all costs incurred to operate a business model.

This building block describes the most important costs incurred while operating under a particular business model. Creating and delivering value, maintaining Customer Relationships, and generating revenue all incur costs. Such costs can be calculated relatively easily after defining Key Resources, Key Activities, and Key Partnerships. Some business models, though, are more cost-driven than others. So-called no frills airlines, for instance, have built business models entirely around low Cost Structures.

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