CFA Level I · CFA Level I Exam · Business Models
A retailer adds a marketplace where independent sellers list products on its platform, earning a commission without holding inventory. This change is most likely an example of:
This is most likely business model innovation toward an asset-light, platform approach. The retailer changes how it earns revenue by taking commissions from third-party sellers without holding inventory, reducing capital needs and leveraging network effects, rather than integrating vertically or buying in bulk.
- AVertical integration to secure supply
- BBusiness model innovation that shifts toward an asset-light, platform approachCorrect
- CA cost leadership strategy based on bulk purchasing
Explanation
Letting third parties sell for a commission without owning inventory changes how the firm creates and captures value, with lower capital needs and platform network effects. It is not backward integration or bulk-purchase cost leadership.
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