ABSTRACT
Business model innovation has always played a critical role in the performance of firms, witness examples from Xerox in its heyday to Apple, Google, and Facebook today, a role whose significance has increased in today’s digital/sharing economies. This chapter provides an in-depth understanding of analytical techniques and core concepts to help entrepreneurs, investors, and managers perform the relevant analyses to assist them in taking more informed decisions, explain to stakeholders how and why decisions were reached, lend credibility to decisions and the people behind the decisions, and better explain and make predictions about organizational performance in today’s economies. Managers and entrepreneurs who have overarching responsibility for the performance of their organizations are very interested in the relationship between a business model and its performance. A breakeven analysis tool can be used to explore the relationship between the point at which a business stops losing money, and the prices that it charges, its fixed costs and variable costs.
