Zappos Business Model Analysis...Revenue is essentially the demand side of the firm's business model, and cost is the supply side.

Business Model Analysis:This section should have two sub-sections, one of which focusses on Revenue, the other on Costs.

-Revenue: I would like you to explain the competitive environment the firm operates in.What is its product/industry.What is the market structure, i.e., the competitive environment?Does it have market/monopoly power?Are there barriers to entry into this market/industry? Why?Does it have control over its prices?Is the elasticity of demand for its product high or low?

-Cost:What is the firm's production function, i.e., the way in which it combines inputs to produce output?What are the inputs to production? Is this the best production method for the firm?How are the firms costs (fixed and variable) structured?Does the firm experience economies of scale or scope?

-Put your analysis of the revenue side and cost side together to explain why the firm is profitable (or not).

Diagnostics:Put your analysis to work in terms of assessing the current and future prospects of the firm.Is it healthy? Will it (continue) be profitable in the near future?What are its biggest challenges? Should it stay in this market or exit?This analysis should be framed in terms of challenges to revenue and/or costs.