Final answer:
The statement is true; a business model outlines how a company intends to meet customer needs and generate profit, which is the difference between total revenue and total costs. The model includes various factors that influence the company's strategy to ensure financial sustainability and competitiveness in the market.
Step-by-step explanation:
The statement that a business model defines how a company will meet the needs of its customers while making a profit is true. A business model is a plan or framework that outlines how an organization will create, deliver, and capture value, which in most cases is equated to earning a profit. Every company, no matter its size or industry, operates with the fundamental goal of earning a profit, which is calculated as total revenue minus total costs.
To do so, businesses consider various aspects of their operations such as their target market, value proposition, revenue sources, cost structure, and competitive advantage. A well-designed business model ensures that the company can provide products or services that satisfy customer needs and are priced appropriately to both cover costs and realize a profit margin.
For instance, some companies might adopt a low-cost business model to attract a larger customer base and rely on high sales volume to generate profits. Others might aim for a premium market segment, providing high-value, specialized products or services, and charge a higher price to achieve profitability. Regardless of the approach, the effectiveness of a business model is ultimately judged by the company's ability to fulfill customer needs in a way that is financially sustainable in the long term.