How to create successful and innovative business models

A strong business model is the foundation of every successful company, shaping how it delivers value, generates revenue, and stays competitive. This is especially true for global businesses. With the proper framework, international companies can prepare to enter new regional markets and adapt as they scale operations worldwide.

The question is: With so many successful business models to choose from, how do you determine the right fit for your needs?

This guide will break down the most effective types of business models, showcase real-world examples, and provide actionable steps to build your winning strategy for growth.

What’s a business model, and why is it important?

Put simply, a business model is a company’s plan for producing value. More specifically, a business model provides an overall strategy for bringing products and services to target markets to drive sales and profit.

Strong and innovative business models are essential for modern businesses. They don’t just impact your bottom line; they can help attract investors and high-quality talent. For businesses operating across international borders, these models also provide a roadmap for entering global markets and building localization strategies.

8 international business model types and localization opportunities

There are many different business models, each with unique benefits and applications. Ultimately, the model of business you choose will depend on many factors, including your overall goals, budget, and target international markets.

Here are eight compelling business models to consider:

1. E-commerce business model

The e-commerce business model dictates how a company sells products and services online, such as through an e-commerce website or a third-party digital marketplace like eBay or Amazon.

For example, an entrepreneur might use Shopify to set up an online store and accept payments from international customers. If they’re worried about language barriers, they can use Smartling’s Shopify integration to source quick and high-quality translations of product descriptions, checkout pages, and more.

This online business model is easily scalable worldwide because it doesn’t require a physical store. At the same time, the e-commerce landscape can be incredibly competitive due to its low bar for entry.

E-commerce business model example: Sustainable shoe brand Allbirds launched dedicated, localized e-commerce websites for customers in New Zealand, Canada, Australia, and the U.K.

2. Retail business model

Retail is one of the most common business models. This revenue model involves buying finished products from manufacturers and wholesalers and selling them directly to shoppers at a higher price through brick-and-mortar stores or online.

The retail business model can carry high overhead costs and expenses, especially if the company operates a physical store. However, businesses can profit by selling various products and marking up their prices.

Retail business model example: Walmart created the successful Walmex brand to cater to local customers in Mexico and create jobs. Its supermarket chain, Bodega Aurrera, is one of the largest private employers in the country.

3. Subscription business model

A subscription business model provides ongoing access to a product or service in exchange for regular payments. It’s an excellent model for yielding reliable revenue streams. However, subscription models can be challenging to maintain since you must keep products fresh and updated over time—or risk customer churn.

Subscription business model example: Netflix operates separate streaming hubs for audiences in different countries, including region-specific content and built-in translations. The entertainment giant regularly licenses and produces new shows and movies to attract diverse customer segments.

4. Freemium business model

A freemium business model reels in customers with free versions of products or services, then sells them on an upgrade. The freemium model is great for nurturing customer relationships and generating sign-ups. However, businesses must be strategic about how much they give away in their free versions and how they entice free users to become buyers.

Freemium business model example: Spotify offers free and paid models with personalized music suggestions for each user. The company is driving rapid growth in countries like India and Brazil by adapting to local price points and customer preferences.

5. Bundling business model

Businesses can use bundling to offer multiple products or services at a discounted price. Bundling can help companies increase their average order value and satisfy customers with special deals. However, businesses must budget carefully, as a discount-based revenue model often means razor-thin profit margins.

Bundling business model example: Adobe offers various subscription bundles through the Creative Cloud that offer software programs like Photoshop and Illustrator at a significant discount.

6. Marketplace business model

Marketplaces are one-stop shops for customers to easily buy from various brands. As intermediaries, these marketplaces provide retailers with access to a large customer base in exchange for a fee or cut of the profits.

Global marketplaces can be complex to set up since many different parties and logistics are involved. But with the right localization strategies, they can scale to connect buyers and sellers across the globe. For example, marketplaces can use Smartling’s AI translation to localize content for different customer segments and increase international sales. 

Marketplace business model example: Craft marketplace Etsy connects shoppers with international sellers by offering local payment methods and translating listings into their preferred languages.

7. Affiliate business model

In an affiliate business model, companies pay partners—aka affiliates—to promote their products or services in exchange for a set fee or a percentage of sales. Social media influencers, for instance, can act as affiliates for brands seeking engaged, built-in audiences. 

Affiliate business model example: Amazon Associates taps affiliates worldwide to promote products to their communities in exchange for a commission.

8. Franchise business model

The franchise business model entrusts franchisees with running physical locations, or franchises. This way, the company can hand off the logistics and operations for each location and earn a percentage of the profits. Beyond domestic locations, businesses can establish franchises in different countries. Still, they’ll need robust localization strategies to meet each market’s unique needs and preferences.

Franchise business model example: McDonald’s adapts its iconic menu items for franchises around the world, serving offerings like the McSpicy Paneer Burger in India and Tres Leches McFlurry in Venezuela.

How to create successful global business models in 8 steps

There’s no one-size-fits-all business model type and no one-size-fits-all method to find the solution that suits your business. However, there are general steps you can follow to narrow down your options and prepare your company for global expansion:

1. Identify your global target market: Determine the markets you want to break into and conduct thorough research regarding their nuances, cultural sensitivities, and customer needs.
2. Define the problem you’re solving: Identify the demands or pain points you’re responding to in your target market.
3. Clarify your value proposition: What makes your offerings stand out in a crowded global market? Your value proposition encapsulates the elements that set your brand apart from the competition (e.g., price, customer experience, or unique product features).
4. Assess vital resources and requirements: Once you know what you’re bringing to market, pinpoint the resources, talent, and operational strategies you need to make that happen.
5. Define your localization needs and strategy: International expansion often poses barriers to market entry, like linguistic and cultural differences. A localization strategy helps your business connect with local audiences worldwide by adapting to their unique needs.
6. Establish strategic international partnerships: Build strong relationships with on-the-ground partners, like shipping companies and manufacturers. These local partners already understand your target audience and have the resources you need to make a seamless market entry.
7. Develop regionally appropriate revenue streams: Your localization strategy may require you to adapt current revenue streams (or create entirely new ones) to capture the interest of global audiences. Consider geographical pricing strategies to account for the unique needs of each regional market.
8. Test and refine your localized business model: Before throwing your entire budget behind a business model, gauge its efficiency with soft product launches and test market campaigns. Surveys and focus groups yield feedback directly from local customers.

Build a scalable global business model with AI-powered localization

Business models aren’t meant to be static and rigid frameworks. They should provide an agile roadmap that guides decision-making as you scale and adapt. When international companies find the right business model for worldwide expansion, they can make strategic moves in each new locale while furthering their overall vision and growth goals.

Smartling’s AI-powered localization solutions support this process. Our cutting-edge tools streamline content translation across multiple languages and regions to help businesses execute their international strategies. No matter your business model, Smartling’s solutions offer a fast, affordable, and consistent means of communication across borders.

Planning your next international move? Explore our free eBook, “What to Look for in a Translation Solution: A Buyer’s Guide,” to fuel your business growth while balancing cost, speed, and quality.