Reference no: EM132904123

What is Ulta beauty's business model equation? This is how the professor wants it: The Business Model Equation(s)

Profit = Revenue - Expense

Where Revenue = # of Units * Price per unit

This is the definition we will primarily, almost exclusively, use in this course. Note that this definition is your instructor's version of what is typically termed the "Cost-Volume-Profit" model as discussed in the text and possibly discussed in previous courses you have taken.

We will evaluate companies using these equations, which will allow us to closely analysis of how the companies are intending to compete, determining what is distinctive (if anything) about their strategic choices. For example, Wal-mart would emphasize lower price and a greater number of units, while prioritizing expenses that lower costs overall, such as technology assets that create economies of scale. Conversely, Apple would emphasize expenses that inspire innovation and create brand awareness, allowing it to charge a premium price. Note that this contrast between Wal-Mart and Apple is related to the concept of generic strategies that will be discussed in chapter 5.